Even as overall spending on prescription medicines in the United States rose 8.5 percent last year, prices for brand-name drugs rose just 2.8 percent, which represents a steady decline from recent years, according to a new report released on Thursday.
By way of comparison, brand-name drug prices rose 9.1 percent in 2012 and continued to rise over the past two years, although at a slower pace — 5.1 percent in 2014 and 4.9 percent in 2013, according to the IMS Institute for Healthcare Informatics, an arm of the market research firm.
“We’re seeing a significant slowdown in price growth on a net basis,” said Murray Aitken, the executive director of the IMS Institute. “It reflects a shift in market dynamics. Drug manufacturers are accepting lower price increases on existing products, and, in some cases, there’s heightened competition.”
Indeed, the trend suggests that payers — pharmacy benefits managers and insurers — are having some success pushing back against rising prices, an issue that has caused national outrage and placed the pharmaceutical industry on the defensive.
The prices, by the way, reflect so-called net prices, which include rebates and discounts that drug makers provide in the way of concession to payers.
Nonetheless, spending is still increasing, although at a slower rate than in 2014. Last year, the US spent $310 billion on all types of medicines — brand-name and generic — which represented an 8.5 percent jump in spending. However, the growth in spending actually slowed from 2014.
Over half of the total spending growth in 2015 can be traced to new brand-name drugs that have been available for less than two years.
For instance, spending on hepatitis C treatments grew $6.6 billion last year — to $18.8 billion — as approximately 250,000 patients were treated, a 46 percent increase from 170,000 patients in the previous year. And spending on new oncology medications rose 18 percent. However, these prices do not include rebates.
Spending on generic drugs, meanwhile, rose $7.9 billion, or 7.4 percent, to $114.1 billion. But price hikes for older generic medicines slowed considerably, contributing about $500 million in spending last year, compared with $3 billion during the previous two years combined.
In general, spending on specialty medicines — a fast-growing category that includes treatments for hepatitis C, oncology, and autoimmune diseases — doubled over the past five years. These medicines accounted for 70 percent of the overall increase in spending between 2010 and 2015.
Spending on treatments for autoimmune diseases rose nearly 29 percent to $30.2 billion, wholesale or list price. And spending on multiple sclerosis increased $2.6 billion, or nearly 18 percent, to $17.7 billion last year. These figures also do not include rebates, which means they are wholesale or list prices.
Total prescriptions dispensed in 2015 numbered more than 4.3 billion, an increase of just 1 percent, which fell from about 2 percent in previous years. IMS also found that mail-order prescriptions declined last year as more off-patent medicines are being filled as generics at retail pharmacies rather than shipped through mail order.
Another nugget: Demand was higher for therapies such as those for treating depression and diabetes, which registered about 10 percent increases, while there was a nearly 17 percent drop in the number of narcotic prescriptions dispensed.