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PARSIPPANY, N.J. — U.S. prescription drug spending was up again in 2010, but growth was less than half the rate of the previous year, according to a report by the IMS Institute for Healthcare Informatics.
The IMS Health unit said in its "Use of Medicines in the United States: Review of 2010" report, released Tuesday, that national expenditures for prescription medications edged up 2.3% to $307.4 billion last year, down from 5.1% growth in 2009.
However, the study noted that chain drug retailers got a bigger share of that gain.
"Of the 3.99 billion prescriptions filled through retail channels, chain drug stores increasingly were chosen by patients — reflecting both the convenience of these pharmacies and the availability of discounted generics," the report stated. "In addition, chain drug stores continued to acquire independent stores and overall increased their market share by 0.5% last year."
By dispensed prescriptions, chain drug stores saw the largest gain among retail channels in 2010 with over 2.17 billion prescriptions filled, up nearly 2.1% from 2009, according to the IMS report. Also seeing increases in dispensed prescriptions were mail service (up 1.1% to 264.2 million), long-term care facilities (up 0.9% to 318.8 million) and food stores (up 0.5% to 490.3 million). Prescriptions filled at independent pharmacies dipped 0.8% last year to 748.3 million. Total dispensed prescriptions in the United States was up almost 1.2% to 3.995 billion.
Drug chains, too, were the only retail channel to grow its market share of dispensed prescriptions in 2010, data from the IMS report showed. Chain drug stores accounted for 54.4% of prescriptions filled last year, up from 53.9% in 2009. Meanwhile, share of dispensed prescriptions slipped to 18.7% from 19.1% for independent pharmacies and to 12.3% from 12.4% for food stores. Share of prescriptions filled held steady for mail service (6.6%) and long-term care facilities (8%) in 2010.
Total spending on prescriptions via retail channels rose 2% for 2010, while for institutional channels it gained 3%.
Still, the overall volume of prescription medicines consumed in 2010 rose at historically low levels, the IMS study pointed out, even though real per capita spending on prescriptions climbed $6 to $898 compared with a year ago. The 2.3% rise in prescription sales continued the trend of 5% or lower growth per year since 2007.
"Last year, we saw the convergence of key dynamics leading to diminished growth in drug spending, which included the greater use of generics, loss of patent protection for major branded products, slower demand and less spending on new therapies," stated Michael Kleinrock, director of research development for the IMS Institute for Healthcare Informatics. "Moreover, fewer patients visited physician offices and initiated new chronic therapy treatments last year, likely the result of the slower economy."
Other key findings in the IMS Institute report included the following:
• Brands and generics: Spending on brand-name drugs dipped 0.7% in 2010, while spending on branded and unbranded generic drugs rose 4.5% and 21.7%, respectively. Generics now account for 7% of all retail prescriptions dispensed, which IMS explained was "a result of the greater availability of molecules in generic form as patents expire, along with patients choosing lower-cost options." On average, more than 80% of a brand’s prescription volume is replaced by generics within six months of patent loss, the study said.
• Volume of medicines consumed: The total volume of medicines consumed in oral or nasal form increased 0.5% in 2010, down 0.3% on a per capita basis due to lower or declining demand in nearly every major therapy area. Medicines administered by injection or infusion increased 0.2% last year, or a per capita decline of 0.6%, primarily the result of reduced utilization in hospital settings.
• Patient doctor visits and new therapy starts: The number of visits to doctor offices was down 4.2% in 2010, extending a declining trend that began in mid-2009. Also, the number of patients starting new treatments for chronic conditions declined by 3.4 million last year. "Contributing factors may include the enduring effect of high unemployment levels and rising health care costs, more careful health care spending by some consumers, and the impact of additional patients losing their health care coverage," the report said.
• Patient payment for medicines: The average patient co-payment was $10.73 in 2010, down 20 cents from 2009, mainly due to the increased use of generics. Commercial third-party insurance was used by patients to pay for 63% of dispensed prescriptions, down from 66% five years ago. Prescriptions filled under a Medicare Part D plan or through Medicaid coverage represented 30% of all prescriptions in 2010 versus 22% in 2006, the first year of the Medicare Part D program.
• Pricing of medicines: The average cost of oral or inhaled medicines, which made up 60% of overall spending last year, declined 0.1% in 2010 due to changes in price as well as in the mix of generics and branded products. Costs of medicines administered by injection or infusion, representing 28% of spending, rose 5.7% last year.
"This report offers good news and bad news. On the positive side, the increased use of generic drugs appears to have reduced costs dramatically for many patients, employers, government agencies and other health plan sponsors. Independent community pharmacists are proud to play a leading role in maximizing the appropriate use of lower-cost generic medications," Douglas Hoey, executive vice president and chief executive officer of the National Community Pharmacists Association said in a statement on the IMS study.
"Now the bad news. The downward trend in prescription drug spending appears to also be driven by the sluggish economy, which has cost many Americans their health insurance coverage and led others to delay or forgo needed medical treatment," Hoey noted. "Pharmacists witness this trend every day as they work with patients to find solutions to help them afford their medication."
The IMS Institute study also found that in the leading therapy areas, 2010 spending growth was driven in large part by product life cycle dynamics, rather than price or volume. The top five therapy classes were oncologics with $22.3 billion in 2010 spending, followed by respiratory agents ($19.3 billion), lipid regulators ($18.7 billion), antidiabetes drugs ($16.9 billion) and antipsychotics ($16.1 billion). Growth in spending among these classes ranged from 0.9% for lipid regulators to 12.5% for antidiabetes medications.
"It became apparent in 2010 that the health care landscape is shifting in significant ways," the IMS Institute’s Kleinrock added. "Physicians and patients have more therapy options than ever, and yet spending on medicines is rising at historic lows with the impact of patent expiries and reduced patient activity. The long-term effect on patient health of fewer doctor office visits and new therapy starts is unclear and requires closer attention."
