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Spending on Medicines: The Big Picture

Holly Campbell
Holly Campbell April 16, 2015

Spending on Medicines: The Big Picture.

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medicine-vs-hospital-careThere has been a lot of discussion lately on spending on prescription medicines. And too often this dialogue fails to acknowledge that retail prescription medicines have consistently accounted for just 10 percent of U.S. health care spending, even though biopharmaceutical companies have brought more than 500 new medicines to U.S. patients in the past 15 years. In fact, government actuaries project this share of spending to remain stable through the next decade.

How is this possible?

Our new video explains how high generic utilization rates, competition among brand-name medicines and aggressive tactics by insurers and pharmacy benefit managers to negotiate lower prices all help to keep costs under control.

This is why we have seen such tremendous – and sustainable – progress against hepatitis C, cancer and other challenging diseases. New cancer medicines have helped cut the overall cancer death rate in the U.S. by 22 percent since its peak in 1991. And the latest hepatitis C treatments have a cure rate of more than 90 percent against a disease that kills more patients than HIV/AIDS.

We can’t afford to have a health care system that doesn’t support innovation and encourage the development of new treatments for these and other costly conditions. For example, in the fight against Alzheimer’s disease, a new innovative medicine that delays the onset of the disease by five years would reduce the number of Americans with this condition by nearly half and reduce the cost of care for Alzheimer's patients by $447 billion a year by 2050.

Watch our new video to help you learn the essential truths about spending on medicines and visit www.phrma.org/cost to learn more.

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Topics: Research and Development, Drug Cost