US hep C, cancer, diabetes med costs drive global drug tab past $1 trillion mark
- According to a new report from the IMS Institute for Healthcare Informatics, the high cost of novelty hepatitis C and cancer medications (such as Gilead's Sovaldi and Harvoni), especially in the United States, will drive total global drug expenditures past the $1 trillion mark in 2014.
- The world will spend $1.06 trillion this year on medicines, a 7% increase over 2013, and IMS expects that tab to reach $1.3 trillion by 2018 as more breakthrough therapies reach market.
- The biggest drivers of this year's significant rise in drug spending? Hepatitis C drugs, specialty cancer meds (such as Roche's Perjeta and Kadcyla), diabetes medications, and dwindling availability of new, cheap generic versions of branded medications. Hep C and cancer drugs are each estimated to have added $100 billion to this year's spending tab, while diabetes drugs added another $78 billion.
Talk about a milestone. This report is likely to throw gasoline onto the raging debate over speciality drug prices in the United States, where the high costs of novel new cancer and hep C medications such as the breast cancer breakthrough Perjeta and Gilead's Sovaldi/Harvoni have some payers and advocates balking.
Pharma companies maintain that this is simply the cost of doing business, as many of their developmental projects never see the light of day or reap a profit, and that the cost of cures such as Sovaldi (while expensive in the short-term) are vastly preferable to the long-term costs of chronic liver diseases or obtaining a liver transplant.
The report also doesn't consider certain rebates offered in the United States for some of these drugs, Reuters reports. "Within the U.S. market, we are seeing in aggregate higher levels of rebate, especially in the diabetes and respiratory therapy areas," said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics. Still, those rebates only shave about half a percentage point off of the total 2014 spending tab.
The U.S. accounts for about 33% of all global drug spending.