Not a day passes without another story about the “high cost” of prescription drugs. Whether it’s about the release of a new, breakthrough therapy or an increased list price for an existing drug, the national sentiment is that drug prices are too high and growing too fast.
The problem with this narrative is that it is based on specific incidences that do not reflect the general trend in prescription drug prices.
As evidenced by IQVIA Institute for Human Data Science’s most recent report, “Medicine Use and Spending the U.S.: A Review of 2017 and Outlook to 2022” the trend shows drug costs are slowing.
- Prescription drug spending nationally only grew 0.6% in 2017 net of all rebates and discounts. This is the slowest rate of growth year over year since 2012.
- When adjusted for economic and population growth, net spending in 2017 actually declined by 2.2%.
- Retail and mail-order pharmacy spending declined by 2.1%
- Net price growth of brand name drugs was 1.9%
Critics of prescription drug pricing will point to IQVIA’s data showing that specialty medicines accounts for a growing share of total prescription drug spending. We’d argue that’s actually great news given the broader trends outlined above. When combined, these data show the system is working as intended. Even though spending on specialty medicines increased last year, total net spend only increased 0.6%. That’s because of competition among brand and generics driving down prices. It’s because of the slower rate of growth in list price for drugs. When those factors add up it creates headroom in the system to allow for breakthrough therapies to reach patients in a way that incentivizes the next generation of astonishing treatments and cures to reach the market.
Perhaps more importantly, more specialty medicines reaching patients is changing the lives of sick people in ways we thought we impossible only recently. The FDA approved a cure for rare childhood leukemia and a cure for a rare, genetic form of blindness last year. With more treatments for other vexing diseases on the horizon, the future is bright for patients. And as the data shows, the health care system can absorb the new costs when competition and generic prescribing (90% of all prescriptions in 2017) continue unabated.
– Robert K. Coughlin, President & CEO, MassBio