Knowing What Is Coming: The Importance of Monitoring the Pharmaceutical Pipeline

摘要

The cost of drugs has remained a popular media topic for several years. For the past 3 years, annual expenditures on drugs represented 10% of total health care costs. Total drug costs in the United States were 5.8% higher in 2016 compared with 2015. Factors that influence drug expenditures include cost and utilization. Guideline changes and new uses for a drug can increase utilization. New generics and competition within a branded drug class can decrease unit cost, while supply issues can increase costs. Utilization went up by only 1%, suggesting the primary reason for the increase in drug expenditures is due to higher acquisition cost. From 2011 to 2015, branded drugs represented 71% to 74% of annual expenditures, even as the number of branded prescriptions decreased 20% from 2011 to 2015. So despite 83% of prescriptions being for generic drugs, only 11% of the cost for drugs in 2015 was due to generics. The third piece of the drug cost puzzle is branded generics, which represented only 5% of prescriptions in 2015, but 16% of costs. So while utilization of branded generics is low, they do contribute to the increase in costs.