US prescription drugs spending to hit $400 bn in 2020
14 Apr 2016
US consumers are expected to spend 22 per cent more on prescription medicines over the next five years, shelling out as much as $400 billion in 2020, according to a report released by health care information company IMS Health Holdings Inc.
The figures, which factor in anticipated discounts, rebates and other price concessions commonly offered represent an annual growth rate of 4 per cent to 7 per cent through 2020,
According the IMS report, patients, insurers, government programs and other payers spent a combined $309.5 billion last year on prescription medicines.
The report comes amid criticism of prohibitive drug prices from patients, doctors, insurers, Congress and presidential candidates, who had promised to control them. Insurers had been trying to keep prices in check, demanding bigger discounts to cover many drugs, but could do nothing about drugs with little or no competition.
Spending on drugs continued to rise due to factors including increasing prices, fewer blockbuster drugs getting new generic competition and a 10 per cent jump last year in the number of prescriptions filled, to nearly 4.4 billion. The previos years had seen prescriptions sales rise about 2 per cent.
"We have more people with health insurance (now), and that could be a reason we're having more uptake in brand-name drug use," said Murray Aitken, the institute's executive director, The Associated Press reported.
With the Affordable Care Act in place, 20 million people were now newly insured and they were mostly getting low-cost generic drugs, Aitken noted.
Meanwhile, drugmakers had defended their pricing practices, pointing out that they offered health-care bill payers rebates and other discounts off the list price for drugs, they do not disclose the specific size of price concessions.
According to a statement by the Pharmaceutical Research and Manufacturers of America, the industry lobbying group, the IMS report confirmed that drug costs were moderating ''due to a competitive marketplace for medicines where large, powerful purchasers negotiate aggressively and generic utilization rates are nearly 90 per cent.''
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