Linda A. Johnson, AP Business Writer
TRENTON, N.J. (AP) — Spending on prescription drugs in the U.S. grew relatively slowly last year as fewer people started new prescriptions and more prescriptions were filled with cheaper generics, an industry study shows.
Americans and their insurers spent $307.4 billion on prescription drugs in 2010, up just 2.3 percent from the previous year. Growth had already slowed to 5.1% in 2009, from as much as 13% a year earlier in the decade.
The study released Tuesday by the IMS Institute for Healthcare Informatics, an arm of health data firm IMS Health, shows the volume of prescription medicines that Americans used also increased at historically low levels.
That's bad news for brand-name pharmaceutical companies — but may also be for doctors and patients.
The number of visits to doctors' offices declined 4.2% in 2010, to 1.54 billion, according to the study. That downward trend began in mid-2009, as the employment rate remained stubbornly high and more people lost health insurance.
Pharmacies filled 0.5% fewer prescriptions in 2010 than in 2009 for pills, capsules and nasal spray medications — about 60% of total spending on medications. For medicines that are injected or infused, total volume rose even less, just 0.2 percent.
Spending on generic drugs last year's few growth areas, driven by patients with no health insurance or financial problems, insurance company lists of preferred drugs and new generic versions of a number of widely used drugs. Nearly four in five prescriptions filled last year were for generic drugs.
"These trends combined to make 2010 the second-lowest sales growth period ever measured by IMS," said Michael Kleinrock, the institute's director of research development. "The lowest was 2008."
The number of patients starting new medicines for chronic illnesses in 2010 also declined. It fell by 3.4 million people from 2009, to 68.8 million.
"This has the potential to impact patients' health," Kleinrock said. "If they're delaying necessary care, that could be pretty bad for their health."
The chronic illness section of the report analyzed medication use for 17 conditions that account for nearly 70% of prescriptions for chronic conditions and nearly 40% of all prescriptions. Those illnesses include high blood pressure and cholesterol, Alzheimer's disease, diabetes, depression, HIV, osteoporosis and attention deficit disorder.
In dollars, spending on chronic medications accounts for almost half of total spending, and big pharmaceutical companies have invested heavily in developing these medicines to ensure a steady revenue stream for many years.
That makes the drop in new patients starting chronic medicines a worrying trend for brand-name pharmaceutical companies, combined with the increasing difficulty of creating new drugs and with pricing pressure from insurance programs and encroachment by generic drug makers.
Spending on name-brand drugs fell 0.7% in 2010.
Linda A. Johnson, AP Business Writer
Spending on unbranded generics rose 21.7% last year from 2009.
The generic surge helped insured patients' wallets a bit, as the average prescription co-payment dipped 20 cents, to $10.73.
The average cost of pills and inhaled medicines declined 0.1% last year, while the average cost of intravenous medicines rose 5.7%.
IMS found 63 percent of prescriptions filled last year were covered by commercial insurance, down from 66% in 2006, while the share of prescriptions filled under Medicare or Medicaid jumped from 22% to 30% over that period.
Meanwhile, 44 new brand-name drugs were launched last year, many for rare disorders or with a mechanism of action similar to existing treatments. Those constraints limited average spending on the new products as patients and payers made careful choices based on economics. Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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