Spending growth on prescription drugs has emerged as a primary concern for healthcare consumers and providers alike as growth rates continue to surge after a relatively steady decline over the last decade.
The Peterson Center on Healthcare and the Kaiser Family Foundation released a report on the recent and forecasted trends in prescription drug spending. Here are seven key findings from the report.
1. Spending growth on prescription drugs declined from 2000 to 2013, partially as a result of patent expirations and decreases in the prices of generic drugs. However, since 2014 this trend has reversed. The Peterson-Kaiser Health System Tracker estimates spending growth on prescriptions spiked upwards in 2014 to 11.4 percent, up from 1.6 percent in 2013. Growth rates in 2015 were slightly lower at 9.6 percent.
2. Prescription drug spending represented 8.8 percent of overall health spending in 2000, rising to 10.4 percent in 2006 and declining steadily to 9.3 percent by 2013. However, spending increased to 9.8 percent of overall health spending in 2014 and is projected to hit 10.1 percent in 2015 and 10.4 percent by 2024, according to the report.
3. An IMS report indicates the main drivers of increased pharmaceutical spending in 2014 were rising prices for brand-name drugs, the emergence of new brand medications and the now increasing prices for generic drugs, though to a lesser extent than the two aforementioned causes.
4. Specialty drugs have also driven increased spending growth on prescriptions. Citing the Express Scripts 2014 Drug Trend Report, traditional drug utilization and cost increased from 2.4 percent in 2013 to 6.4 percent in 2014, while the utilization and cost for specialty drugs climbed from 14.1 percent to 30.9 percent in the same time frame, according to the report. Furthermore, since 2010, there has been at least one more approval of a specialty drug than a traditional drug each year. Nineteen specialty drugs were approved in 2013 compared with nine traditional drugs.
5. Per capita out-of-pocket spending decreased for hospital care and physician services in 2014 by -4.8 percent and -0.4 percent respectively. At the same time, per capita out-of-pocket spending on prescription drugs is estimated to have risen by 1.9 percent in 2014, though most of these costs are expected to have been covered by insurance, according to the report.
6. While per capita out-of-pocket costs are expected to increase in the near future, it has fallen as a share of total drug spending and this decrease is projected to continue, according to the report. Medicare is expected to account for a growing share of spending on prescription drugs over the next decade.
7. About a quarter of people taking prescription drugs say they have difficult affording their medication, and a recent poll from the Kaiser Family Foundation found bipartisan support for government action in controlling the costs of prescriptions.