Analysis of 2017 Prescription Drug Expenditure in the United States

Michelle Mages, Pharm.D., Hennepin Healthcare

Background: In 2016, $3.3 trillion were spent on healthcare in the United States. This accounted for 17.9% of gross domestic product (GDP) and was a 4.3% increase from 2015. In contrast, GDP only grew by 2.8% from 2015 to 2016. Multiple factors play into increasing health costs including increased Medicare enrollment due to aging baby boomers and increasing prices for medical goods and services, including prescription drugs. Schumock and coauthors published a special edition article, National trends in prescription drug expenditures and projections for 2018 in the American Journal of Health-Systems Pharmacists in July 2018 to analyze prescription drug expenditures and make projections for the year.

Methods: Data was collected and analyzed from the IQVIA (formerly QuintileIMS) National Sales Perspective databases. In addition, new drug approvals and patent expirations were reviewed. Focused analyses were completed on drug classes more likely to impact expenditures including antimicrobials, biosimilars, and oncology medications.

Results: In 2017, $455.9 billion was spent on prescription drug sales in the US. This was a 1.7% increase from 2016. Retail pharmacies account for 46.2% ($210.5 billion) of total expenditures, followed by mail-order pharmacies (24.1%), and clinics (15.6%). Prescription drug expenditures grew in clinics by 10.9% in 2017 compared to 2016, which is the healthcare sector with the biggest growth. Retail pharmacies had a 2.2% decline in expenditure in 2017 compared to 2016. Three factors driving growth in all settings include 1) new products, 2) price changes of existing products, and 3) increased purchasing (and utilization) of products.

The top five drugs by expenditure in 2017 overall were adalimumab, insulin glargine, etanercept, ledipasvir-sofosbuvir, and insulin aspart. Adalimumab was the top drug overall ($17.1 billion) in 2017 with a 20.6% increase in spending compared to 2016. In the top 25 drugs overall, expenditures on apixaban increased by 55.9% in 2017 compared to 2016. In clinics, infliximab (branded and biosimilar products) was the largest expenditure ($3.7 billion), which has been consistent since 2013. Biologics and oncology drugs accounted for most of the top 25 drugs by expenditure in clinics. Vaccines had the largest expenditure decrease in clinics, with a change of -10.0% and -13.8% for pneumococcal vaccine and influenza vaccine, respectively.

Expenditures in 2018 are projected to increase by 3.0 to 5.0%. Components impacting 2018 expenditures may include: new medications including pharmaceutical agents for migraines, moderate-to-severe pain, and a universal factor Xa reversal agent, Adexanet alfa.  Patent expirations may also impact expenditures. Some medications that are predicted to be going off patent include: Symbicort®️ (budesonide-formoterol), Pradaxa®️ (dabigatran), Apidra®️ (insulin glulisine), Lyrica®️ (pregabalin) and Spiriva®️ (tiotropium).

Discussion: Overall growth in drug expenditure from 2016 to 2017 is smaller than previous years likely due to decreased use. Specialty medications, including oncology drugs and biosimilars, will continue to contribute to expenditure growth in the clinic setting. Vaccinations including pneumococcal and influenza have declined in expenditure, potentially due to decreased utilization, which is alarming as less people are protected from these disease states. Additionally, changes in 340B Drug Pricing my change drug expenditures for 2018. It is projected that there will be a 3.0 to 5.0% increase in prescription drug expenditures from 2017 to 2018.

Clinical Impact: Prescription drugs expenditures account for a substantial portion of healthcare spending. Pharmacists are experts on prescription drugs and play a key role in determining if selected medications are appropriate to reduce wasteful healthcare spending.

Reference:

  1. Schumock GT, Stubbings J, Wiest MD, et al. National trends in prescription drug expenditures and projections for 2018. Am J Health-Syst Pharm. 2018; 75:1023-38.