Since 2000, biopharmaceutical companies have brought more than 450 new innovative medicines to the U.S. market, resulting in significant progress against some of the most costly and challenging diseases. Yet, prescription drug spending in the U.S. has remained constant and federal projections show growth is in-line with health care spending through the next decade.
An updated global forecast for the use of medicines through 2018 from IMS Institute for Healthcare Informatics aligns with this projection. IMS Health estimates the growth in U.S. spending on medicines will average between 5-8 percent, which is in-line with overall U.S. health care growth of 6 percent over the next decade. And federal actuaries project prescription medicines will continue to account for just 10-12 percent of U.S. health spending through the next decade. This is the same share as in the 1960s.
While U.S. prescription drug spending is estimated to remain stable, IMS does project that global spending on prescription medicines will reach $1.3 trillion in 2018. This is driven by increased access in emerging markets. This projected growth is nearly double the estimate for the U.S.
This modest increase in global spending on prescription medicines should not overshadow the fact that medicines are driving important advances for many key diseases and play a crucial role in controlling future health care costs.
For example, hepatitis C patients can now be cured and avoid long-term liver damage like cirrhosis which can require a liver transplant costing as much as $500,000 and years of costly follow-up care.
And every additional dollar spent on medicines for adherent patients with congestive heart failure, high blood pressure, diabetes and high cholesterol generated $3 to $10 dollars in savings on emergency room visits and inpatient hospitalizations. This is critical to keep in mind as U.S. spending on hospital care over the next decade will total $13.6 trillion, more than three times total spending on prescription medicines.
With today’s innovative medicines, we are helping patients live longer and healthier lives and transforming the health care system toward preventing and curing diseases. The progress we are making is clear, and it’s up to the entire health care ecosystem to continue to work together in reducing health care costs in the long term.
Robert Zirkelbach Robert Zirkelbach is Executive Vice President of Public Affairs at PhRMA. He joined PhRMA in 2014 after working for seven years representing the health insurance industry. He likes Saturday afternoon BBQs on his deck, traveling, trying new restaurants, and attempting to play golf. He’s an avid, somewhat obsessive, Iowa Hawkeye fan and is lucky to have a wife that loves watching college football on Saturday afternoons.