Total per capita spending on drugs in the USA fell 3.5% in 2012, there were fewer non-emergency hospital admissions and doctor office visits, and prescription use went down by 0.1 percent, according to a new report issued by the IMS Institute for Healthcare Informatics.

The report – Declining Medicine Use and Costs: For Better or Worse? – informed that $325.8 billion were spent in 2012 in the USA. At $898 in 2012, total real capita spending was $33 less than the year before.

The authors wrote that the main drivers for the overall fall in healthcare service use in 2012 included:

  • Patent expiries of proprietary drugs – millions of patients gained access to cheaper generic versions of many medications, resulting in $28.9 billion less spending on medicines. Patent expiries had the largest ever impact in bringing down health care spending.

    84% of all prescriptions in the USA today consists of cheaper generic medications.

  • Doctor office visits – 0.9% fewer people went to see their doctors compared to the previous year
  • Non-emergency admissions – slightly fewer people were admitted to hospital for non-emergency treatment
  • Outpatient visits – fewer patients visited hospitals for outpatient services
  • The flu season of 2012 was less severe than the year before

Emergency room admissions, on the other hand, rose by 5.8% in 2012.

People with health insurance paid higher deductibles, co-insurance and copay for overall healthcare. However, prescription copays dropped for most patients. 2012 saw new transformative drugs becoming available for a wide range of diseases with small or well defined patients populations.

Murray Aitken, executive director, IMS Institute for Healthcare Informatics, said:

“The cost curve for medicines was clearly bent in 2012, for better or for worse. To some extent, this is a harbinger of more efficient use of our healthcare resources, but it also reflects a decline in utilization that may be the result of under-treatment and an imbalance between prevention and care. On the eve of the most transformative period in U.S. healthcare, understanding the drivers of this cost-curve reduction is critical to effectively addressing the long-term implications.”

As has been the case in the past, American healthcare costs are still concentrated on relative few people who suffer from multiple chronic conditions, cancer and other diseases. Five percent of insured people under the age of 65 years incur 51% of total healthcare costs – $15,684 per person last year.

Average out-of-pocket costs for privately insured patients aged up to 65 years were $1,145 in 2012, 30% higher than in 2011 (entirely due to higher deductibles). The average pharmacy benefit copay fell by two dollars to $121 in 2012. Seventy-two percent of all retail pharmacy prescriptions had a maximum copay of $10.

The authors added that “Patients gained access to 28 new molecular entities in 2012, including seven with orphan drug designations by the FDA for rare diseases, a novel oral therapy for rheumatoid arthritis, a treatment for cystic fibrosis that will significantly improve life expectancy for patients with a specific genetic mutation, and an inhalable anti-psychotic. Nine new cancer treatments were introduced last year, the most in more than a decade, including a breakthrough for treating basal-cell carcinoma.”

Despite spending much more than any other rich nation on healthcare, the USA trails behind on life expectancy, infant mortality, and the number of people with no health insurance cover.

A Save the Children report found that a baby in the USA is more likely to die during his/her first day of life than in 68 other countries.

Percentage of Gross Domestic Product spent on health care, 2010 (OECD):

  • USA – 17.6%
  • Australia – 9.1%
  • Austria – 11%
  • Belgium – 10.5%
  • Canada – 11.4%
  • Czech Rep – 7.5%
  • Denmark – 11.1%
  • Finland – 8.9%
  • France – 11.6%
  • Germany – 11.6%
  • Greece – 10.2%
  • Iceland – 9.3%
  • Ireland – 9.2%
  • Italy – 9.3%
  • Japan – 9.5%
  • Luxembourg – 7.9%
  • Netherlands – 12%
  • New Zealand – 10.1%
  • Norway – 9.4%
  • Portugal – 10.7%
  • South Korea – 7.1%
  • Spain – 9.5%
  • Sweden – 9.6%
  • Switzerland – 11.4%
  • United Kingdom – 9.6%

Written by Christian Nordqvist