• SKIP TO CONTENT
  • SKIP NAVIGATION
  • Patient Resources
    • COVID-19 Patient Resource Center
    • Clinical Trial Listings
    • What is Clinical Research?
    • Volunteering for a Clinical Trial
    • Understanding Informed Consent
    • Useful Resources
    • FDA Approved Drugs
  • Professional Resources
    • Research Center Profiles
    • Market Research
    • Benchmark Reports
    • FDA Approved Drugs
    • Training Guides
    • Books
    • eLearning
    • Events
    • Newsletters
    • White Papers
    • SOPs
    • eCFR and Guidances
  • White Papers
  • Clinical Trial Listings
  • Advertise
  • COVID-19
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Home » Study: U.S. drug spending growth reaches 8.5% in 2015

Study: U.S. drug spending growth reaches 8.5% in 2015

April 18, 2016
CenterWatch Staff

Total spending on medicines in the U.S. reached $310 billion in 2015 on an estimated net price basis, up 8.5% from the previous year, according to a new report issued by the IMS Institute for Healthcare Informatics. The surge of new medicines remained strong last year and demand for recently launched brands maintained historically high levels. The savings from branded medicines facing generic competition were relatively low in 2015, and the impact of price increases on brands was limited due to higher rebates and price concessions from manufacturers. Specialty dug spending reached $121 billion on a net price basis, up more than 15% from 2014.

The study—“Medicines Use and Spending in the U.S.: A Review of 2015 and Outlook to 2020”—found that longer-term trends continued to play out last year, driven by the Affordable Care Act and ongoing response to rising overall healthcare costs. Increasingly, healthcare is being delivered by different types of healthcare professionals and from different facilities, while patients face higher out-of-pocket costs and access barriers. The outlook for medicine spending through 2020 is for mid-single digit growth, driven by clusters of innovative treatments and offset by the rising impact of brands facing generic or biosimilar competition.

Total spending on an invoice price basis—without adjusting for the impact of estimated rebates and other price concessions—reached $425 billion in 2015, up 12.2% over 2014 levels. Invoice prices for branded medicines rose 12.4% in 2015, compared with 14.3% in the prior year. Heightened competition among manufacturers, along with more aggressive efforts by health plans and pharmacy benefit managers to limit price growth, resulted in concessions that reduced price increases on an estimated net basis to 2.8%, significantly lower than in prior years.

“The challenge of balancing access and the cost of care in an era of innovative but more expensive treatments continues as a theme across our healthcare system,” said Murray Aitken, IMS Health senior vice president and executive director of the IMS Institute for Healthcare Informatics. “The level of price concessions achieved in 2015 points to a shift in market dynamics as manufacturers accept lower price increases on existing products. At the same time, spending on new brands continued at near-historic levels.”

The report’s key findings include the following:

  • Growth in specialty drugs. Spending on specialty medicines has nearly doubled in the past five years, contributing more than two-thirds of overall medicine spending growth between 2010 and 2015. Increased specialty spending was driven primarily by treatments for hepatitis, autoimmune diseases and oncology, which accounted for $19.3 billion in incremental spending. Overall, 2015 saw a 21.5% spending increase for specialty medicines to $150.8 billion on an invoice price basis.
  • Transformative new medicines. A total of 43 New Active Substances (NASs) was launched in 2015, a third of those receiving orphan drug designations from the FDA. An additional 30 brands were launched last year, bringing new combination therapies, alternative dosing and treatment administration options to patients. The strong momentum of breakthroughs and R&D productivity is reflected in the 2015 cohort of new medicines. Among last year’s launches, the number of non-orphan drugs with new mechanisms of action reached 14, double the number in 2014. Among the 2015 NAS launches were notable advances in precision medicines, rare disease therapeutics and chronic disease medicines that could benefit large populations.
  • 2020 growth forecast. Spending on medicines on a net price basis is expected to reach $370 to 400 billion in 2020, growing at a compound annual growth rate of 4 to 7%. This growth will reflect increased spending on innovative medicines, offset by lower spending on brands that will lose market exclusivity over the next five years. While brand price increases are expected to continue in the 10 to 12% range on an invoice basis, they will be significantly offset by rebates, discounts and other forms of price concessions. The prospects for additional innovative medicines becoming available for patients through 2020 are very bright. The late-phase pipeline holds 2,320 novel products, and an average 43 to 49 NASs are expected to be launched annually over the next five years.

Upcoming Events

  • 06Jun

    Gene & Cell Therapy Regulation: Comparability and Other New Developments

  • 07Jun

    Developing World-Class SOPs: Optimizing Quality and Compliance

  • 08Jun

    Implementing ICH E8 R1 Recommendations Increases Site and Participant Relationship Scoring Measures

Featured Products

  • Spreadsheet Validation: Tools and Techniques to Make Data in Excel Compliant

    Spreadsheet Validation: Tools and Techniques to Make Data in Excel Compliant

  • Surviving an FDA GCP Inspection

    Surviving an FDA GCP Inspection: Resources for Investigators, Sponsors, CROs and IRBs

Featured Stories

  • MAGI East 2023

    MAGI East 2023 Preview: Janssen Reports on Environmental Impact of Trials

  • Complexity-360x240.png

    Phase 3 Trials Significantly Rising in Complexity, Says CSDD

  • Quality Level Scale

    Build Quality into Trials Like You’d Build a House, Says FDA’s BIMO Director

  • DE&I

    Trust-Building, Community Connection Still Essential to DE&I Efforts, Experts Say

Standard Operating Procedures for Risk-Based Monitoring of Clinical Trials

The information you need to adapt your monitoring plan to changing times.

Learn More Here
  • About Us
  • Contact Us
  • Privacy Policy
  • Do Not Sell or Share My Data

Footer Logo

300 N. Washington St., Suite 200, Falls Church, VA 22046, USA

Phone 703.538.7600 – Toll free 888.838.5578

Copyright © 2023. All Rights Reserved. Design, CMS, Hosting & Web Development :: ePublishing