The gross spending on medicine in the US during 2017 reached at US$ 453 billion on an invoice basis, but after discounts, rebates and other price concessions improved only by 0.6 per cent to $324 billion,  the slowest rate of growth since 2012 when the largest period of concentrated patent expiries took place. According to IQVIA report, the invoice-level growth slowed to 1.4 per cent due to lower price increases for protected branded products, price declines for generics and less growth from new products despite a large increase in the number of new product launches. After the historically high growth in 2014 and 2015, driven predominately by innovative new medicines, 2017 growth was slower on a net basis than all but two of the last ten years.

Retail prescription drugs accounted for $212 billion (65%) in spending on a net basis during 2017, reflecting a 2.1 per cent declined from previous year mainly on account of higher discounts and rebates to intermediaries and other costs. Non-retail medicine spending was a significant portion of the overall medicine spend. It represents 35 per cent ($113 billion) of 2017 net revenues but only 30 per cent on an invoice basis as discounts and rebates are larger in the retail pharmacy market.

Real net per capita spending declined by 2.2 per cent to $876 in 2017 from $896 in the previous year. Speciality share of net spending across institutional and retail settings rose to 46.5 per cent in 2017. Speciality medicines are rapidly approaching half of medicine spending, driven by innovation. The largest proportion of new medicines launched in the last five years have been speciality drugs and speciality share of spending has risen, while traditional net medicine spending has declined by more than $133 per person over the past decade. Spending on traditional medicines has declined primarily due to patent expiries and loss of exclusivity.

According to IQVIA report, the largest drivers of new spending growth in 2017 were the group of new brands on the market for less than 24 months; these accounted for $12 billion in new spending on  a net basis.  Protected brands net price added $5.2 billion to spending in 2017, compared to $18 billion of invoice price increases before discounts and rebates. The impact of losses of exclusivity has been largely unchanged for the last four years, offering limited offsetting reductions compared to prior years.  

The generic growth declined by $5.5 billion in 2017 as greater competition in a number of markets drove down prices. The pricing trends for generic medicines have declined on average 6.3%, with significant variation based on the presence of new competition. The period from 2013 to 2015 was historically abnormal with much higher price growth, and much of it driven by much older generic medicines who had not faced new competition. Recent increases in generic approvals by the FDA and an enhanced competitive environment has resulted in a decline of $5 billion due to associated price reductions.

The new medicines first launched in 2017 included 42 new active substances, 32 of which are in speciality therapy areas. New oncology medicine growth slowed from $5.4 billion in 2016 to $2 billion in 2017 as earlier launches slowed, while the newest medicines were for smaller populations and will likely contribute to growth in later years. HIV added $3 billion in growth in 2017. There were also ten new medicines launched in traditional therapy areas including three orphan drugs, and one novel treatment for “off-episodes” in Parkinson's disease. The net new brand spending growth declined to $12 billion in 2017 from $14.3 billion in the previous year.

Biologics medicines grew by 12.6 per cent in 2017 averaging 11.2 per cent for the last five years as a variety of biologic treatments for autoimmune disorders, immunology and cancer came to the market. Despite a significant number of biosimilars approved by the FDA since the creation of a biosimilar pathway in the Affordable Care Act in 2010, so far only four have been marketed. In addition, there are two other non-original versions approved through other pathways. An insulin glargine biosimilar, Basaglar, launched in December 2016, achieved a volume share of approximately 17 per cent by the end of December 2017. Filgrastim “biosimilars”, Granix and Zarxio, together have reached 49% of volume as of December 2017.