The use of medicines in the United States is a critical factor influencing the health outcomes of millions of Americans. This report provides objective measures of medicine use and its costs to the U.S. healthcare system and patients, employers, health plans, intermediaries and state and federal government agencies.
The report specifically focuses on the volume of medicine use – with a special attention on opioids – drivers of change in the use of medicines, overall “net spending,” out-of-pocket costs to patients, and an outlook through 2023 for the pharmaceuticals market. It additionally examines the key dynamics around new product launches, patent expiries and the introduction of generics and biosimilars.
Medicine use has continued to rise, with Americans filling 5.8 billion prescriptions in 2018, a gain of 2.7% over the prior year. At the same time, prescription opioid volumes have declined by 43% since their peak in 2011, with the most potent and dangerous high-dose prescriptions declining by 61% over the same period. The use of specialty medicines grew by 5%, more than twice the rate of other drugs, and now represents 2.2% of volume.
In 2018, medicines spending growth in the United States rebounded to 4.5% on a net basis, while growth at the invoice-level was 5.7%. Net medicine spending was $1,044 per person, up 0.9% or $10 from 2017. Total net spending growth in 2018 was largely driven by more patients receiving existing branded drugs and using newly launched drugs.
In aggregate, patient out-of-pocket costs climbed in 2018 to an estimated $61 billion. Across all pay types, 8.8% of patients pay more than $500 for prescriptions. Commercially insured patients increasingly use manufacturer coupons to offset their initial cost exposure, and average final out-of-pocket costs remained at $42 per brand prescription.
The base case outlook in the next five years forecasts that net medicine spending in the United States will increase from $344 billion in 2018 to $420 billion in 2023, an aggregate growth of $76 billion and lower than the $84 billion growth seen over the past five years. The largest driver of this growth will be the launch of new branded drugs.
A number of policy changes are currently under consideration, and this report examines alternative forecast scenarios based on their impact on various attributes and stakeholders. In a scenario where reforms are limited to Medicare programs, out-of-pocket costs decline $14 billion and net spending decreases by as much as 6%. In another scenario, if reforms proposed for Medicare are extended to the commercial market, out-of-pocket costs would decline by 30% and drive net spending 9% lower than base case projections.
Access an on-demand webinar where Michael Kleinrock, report author and Institute Research Director, delves deeper into report findings.