US prescription drug spending increases to an estimated $457 billion in 2015
- US prescription drug spending hit $457 billion in 2015 and continued its recent growth, the Department of Health and Human Services estimated on Tuesday.
- Projected by the Office of the Assistant Secretary for Planning and Evaluation, the 2015 drug spend represented 16.7% of the overall $2.7 trillion expended on personal health care services.
- The brand-name share of retail drug expenditures continued its downward trend, representing about 53% of expenditures between 2013 and 2015, the report said. While the number of brand-name prescriptions has fallen, revenue has remained roughly level.
The report gives some context to the ongoing and tension-filled debate about drug prices in the U.S. It highlights the growing impact of higher-cost specialty drugs and retail price increases on overall spending.
"The number of prescriptions is rising, but the majority of the growth in retail drug spending appears to be related to rising prices and changes in the compositions of drugs prescribed—e.g., a general shift toward more expensive prescriptions—rather than changes in the total quantity of prescriptions," the report said.
However, the pharmaceutical industry pushed back on the report's findings. The Pharmaceutical Research and Manufacturers of America quickly issued a statement, saying: "The issue brief ignoes the tremendous value medicines provide to patients including many that offer improved treatment options for conditions that previously had few or no options such as cancer and multiple sclerosis."
Price changes outpacing prescription growth
Growth in prescription drug spending was attributed to a number of different factors. An 11% increase in the total number of prescriptions between 2010 and 2014 accounted for about a third of the spending increase over that time period. In 2015, 3.95 billion prescriptions were written, compared to 3.92 billion a year prior and 3.54 billion in 2010.
Expenditures on drugs, however, grew more quickly than the number of prescriptions, checking in at 26% during the same five years. Roughly half of the changes in price can be attributed to economy-wide inflation, while the rest is growth in excess of the 7% inflation between 2010 and 2014.
Spending on specialty drugs made a notable contribution to overall expenditure growth, nearly doubling to $27.1 billion in 2015 from $14.5 billion in 2009. The 2015 figure represents 7.6% of retail drug expenditures.
As the definition of what constitutes a specialty drug varies, the report relied on CVS/Caremark's specialty pharmacy formulary as a basis for its analysis.
- Health and Human Services Observations on Trends in Prescription Drug Spending
- Reuters U.S. health agency estimates 2015 prescription drug spend rose to $457 billion
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