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Drugs falling out of patent mean savings

By Lee Howard

Publication: The Day

Published May 10. 2013 4:00AM
New wave of generics lower medical costs

As more top-selling drugs went off patent in 2012, Americans for the first time in decades spent less money on medicines than they had the previous year.

The New York-based IMS Institute for Healthcare Informatics reported Thursday that Americans on average spent about $33 less on medications in 2012 than they had the year before. The United States also saw a decline in the use of health care services for the second year in a row.

Fewer admission to hospitals for non-emergency situations and fewer visits by patients to office-based doctors accounted for much of the reduction in spending, along with lower drug costs and a flu season that was milder than usual, according to the report.

"The cost curve for medicines was clearly bent in 2012, for better or for worse," said Murray Aitken, executive director of the institute, in a statement.

He said health care resources may be employed more judiciously now than they were in years past, but the declining costs also could be related to under-treatment.

Drug spending of $325.8 billion declined 1 percent last year.

"While that may be welcome news for healthcare budgets, it's not so good for branded drugmakers," the industry blog FiercePharma pointed out.

One of the key branded drugs that saw its first full year of being off patent last year was Pfizer Inc.'s cholesterol treatment Lipitor. The drug's sales in 2011 had totaled more than $9.5 billion, but fell drastically last year to less than $4 billion.

Branded drugs that became generics contributed $28.9 billion in lower health care costs last year, according to the institute's report. The overall reduction in branded prescription costs was $11.4 billion, since a few new drugs hit the market as well.

At the same time, spending on generics increased $8 billion, according to the report.

Americans spent nearly $900 per person on medicines last year, the report said.




Prescription Spending Decline

U.S. sales of the top-grossing drug categories in 2012:

Cancer medicines $25.9B +7.8%

Mental illness $23.5B - 21%

Respiratory disorders $22.1B +1.9%

Diabetes $22B +7.1%

Painkillers $18.2B +1.6%

Cholesterol drugs $16.9B -20.6%

Immune disorders $14.8B +17.9

High blood pressure $13.6B -3.0%

HIV/AIDS medicines $11.7B +12.1%

Attention deficit $10.4B +13.1%

Ulcer medicines $10B -4.7%

Multiple sclerosis $8.9B +17.8%

Antibiotics $7.9B -14.8%

Nervous disorders $7.2B +3.7%

Vaccines $6.8B +7.2%

Source: IMS Institute for Healthcare Informatics

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