The IMS Institute for Healthcare Informatics pointed out that there was a 2.3 per cent increase in spending on prescription medicines in the US last year, significantly lower than the 5.1 per cent growth rate in 2009. In a new study, The Use of Medicines in the United States: Review of 2010, the IMS Institute finds that total dollars spent on medications in the US 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.

“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,” said Michael Kleinrock, director, research development, IMS Institute for Healthcare Informatics. “Moreover, fewer patients visited physician offices and initiated new chronic therapy treatments last year, likely the result of the slower economy.”

The total volume of medicines consumed in oral or nasal form increased 0.5 per cent in 2010, representing a decline of 0.3 per cent on a per capita basis due to lower or declining demand in nearly every major therapy area. Medicines administered by injection or infusion increased 0.2 per cent last year, or a per capita decline of 0.6 per cent, primarily the result of reduced utilization in hospital settings.

The number of visits to doctor offices was down 4.2 per cent 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.

The average patient co-payment was $10.73 in 2010, down 20 cents from 2009, mainly due to the increased use of generics. Commercial third-party insurance was used by patients to pay for 63 per cent of dispensed prescriptions, down from 66 per cent five years ago. Prescriptions filled under a Medicare Part D plan or through Medicaid coverage represented 30 per cent of all prescriptions in 2010, compared with 22 per cent in 2006, the first year of the Medicare Part D programme.

The average cost of oral or inhaled medicines, which made up 60 per cent of overall spending last year, declined 0.1 per cent 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 per cent of spending, rose 5.7 per cent last year. Spending on protected brands increased by $16.6 billion in 2010 due to invoice price changes, compared with $15.8 billion the prior year. Increasing levels of off-invoice discounts and rebates negotiated by payers and intermediaries accompanied these increases, resulting in net growth from pricing of $12.1 billion, or 4.2 per cent of total spending.

Of the 3.99 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 per cent last year.

Forty-four new branded products became available to patients in 2010. Ten of those products featured innovative mechanisms of action, including a new oral therapy for multiple sclerosis, a monoclonal antibody for osteoporosis and bone metastases, and a therapeutic vaccine for prostate cancer. Additionally, five orphan drugs and six new chemical entities using existing mechanisms were launched, bringing new options to patients with rheumatoid arthritis, prostate cancer and meningitis. Average spending per new branded product – those available 24 months or less – was $62 million last year, down from $114 million in 2006. This reflects a shift in the mix of new products toward orphan drugs and medicines with the same mechanism of action as existing treatments.

Spending on brands declined 0.7 per cent in 2010, while spending on branded and unbranded generics rose 4.5 per cent and 21.7 per cent, respectively. Generics now account for 78 per cent 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 per cent of a brand’s prescription volume is replaced by generics within six months of patent loss.

The IMS Institute study also finds that in the leading therapy areas, 2010 spending growth largely was driven by product life cycle dynamics, rather than price or volume. The top five therapy classes were: oncologics, with $22.3 billion in 2010 spending; respiratory agents, at $19.3 billion; lipid regulators, at $18.7 billion; anti-diabetes drugs, at $16.9 billion; and anti-psychotics, at $16.1 billion. Growth in spending among these classes ranged from 0.9 per cent for lipid regulators to 12.5 per cent for anti-diabetes medications. Notably, total spending on oncologics grew only 3.5 per cent, the lowest increase ever recorded in that therapy class.

Said Kleinrock, “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.”

Analyses conducted for The Use of Medicines in the United States: Review of 2010 report are based on prescription-bound products, including Insulins that are available without a prescription. OTC products are excluded from the report. Spending figures are derived from IMS National Sales Perspectives™ and reported at wholesaler invoice prices that do not reflect off-invoice discounts and rebates.