A new 37 page study highlights the fact that the United States is spending more money on prescription drugs than in past years, but the amount of growth is not quite as high as in past years overall. Generics are taking up more of the pie than ever. The IMS Institute for Healthcare Informatics today reported a 2.3% increase in spending on prescription medicines in the U.S. last year, markedly lower than the 5.1% growth rate in 2009.

According to the study:

“Spending on brands declined 0.7% in 2010, while spending on branded and unbranded generics rose 4.5% and 21.7%, respectively. Generics now account for 78% of all retail prescriptions dispensed, a result of the greater availability of molecules in generic form as patents expire, along with patients choosing lower-cost options. On average, more than 80% of a brand’s prescription volume is replaced by generics within six months of patent loss.”

The U.S. market reached $307.4 billion last year, or real per capita spending of $898, up $6 from 2009. The volume of prescription medicines consumed overall rose at historically low levels in 2010.

Oral or inhaled medicines made up 60% of overall spending last year, declined 0.1 percent in 2010 due to changes in price as well as in the mix of generics and branded products. Costs of medicines administered by injection or infusion, representing 28% of spending, rose 5.7% last year.

Michael Kleinrock, director, Research Development, IMS Institute for Healthcare Informatics explains further:

“Last year, we saw the convergence of key dynamics leading to diminished growth in drug spending, which included the greater use of generics, loss of patent protection for major branded products, slower demand and less spending on new therapies. Moreover, fewer patients visited physician offices and initiated new chronic therapy treatments last year, likely the result of the slower economy.”

The study also reports that the number of visits to doctor offices was down 4.2% in 2010, extending a declining trend that began in mid 2009. Also, the number of patients starting new treatments for chronic conditions declined by 3.4 million last year.

Contributing factors may include the enduring effect of high unemployment levels and rising healthcare costs, more careful healthcare spending by some, and the impact of additional patients losing their healthcare coverage.

Of the just under four billion prescriptions filled through retail channels, chain drugstores increasingly were chosen by patients, reflecting both the convenience of these pharmacies and the availability of discounted generics. In addition, chain drugstores continued to acquire independent stores, and overall increased their market share by 0.5% last year.

Kleinrock concludes:

“It became apparent in 2010 that the healthcare landscape is shifting in significant ways. Physicians and patients have more therapy options than ever, and yet spending on medicines is rising at historic lows with the impact of patent expiries and reduced patient activity. The long-term effect on patient health of fewer doctor office visits and new therapy starts is unclear and requires closer attention.”

For the entire The Use of Medicines in the United States: Review of 2010 study, click here for the PDF.

Written by Sy Kraft