Generics are up. FDA-approved drugs are down. And the pharmaceutical equivalent of a “Star Wars” blockbuster is nowhere in sight.
According to IMS Health of Norwalk, a major reduction in prescription drug-spending growth has created a turning point in health care with policy implications.
IMS data have influenced the study “Prescription Drug Spending Trends in the United States: Looking Beyond the Turning Point,” which found U.S. prescription drug spending in 2007 slowed to its lowest growth rate in more than 30 years.
“As future health care policy is formulated, new market realities that have emerged over the past five years must be fully acknowledged and recognized,” said Murray Aitken, senior vice president, of health care insight at IMS.
Aitken said the dynamics reflect the increased use of generic drugs following patent expiration, a marked decline in the number of new molecular entities approved by the FDA, and a reduction in the number of blockbuster drugs.
Aitken and authors Ernst Berndt, professor of applied economics at Massachusetts Institute of Technology, and David Cutler, professor of economics at Harvard University, said the growth, size and composition of prescription drug spending is likely to change dramatically in future years, raising significant health policy issues. The study found that a decline in prescription sales growth may stifle or limit investment in research and development, slowing the pace of innovation.
Aitken said the topic rising to the top of policymaker and industry agendas will be achieving the right balance between regulatory stringency and the introduction of innovative therapies.
Health spending prospects for payers and consumers appear to be more moderate than previously expected by policymakers, with prescription pharmaceutical costs currently rising very slowly or even falling. According to the IMS findings, prescription drug spending growth is now likely to be lower than growth in any other major medical care sector.
“What is increasingly clear is that government policymakers and industry stakeholders must work together more effectively to ensure that a robust pipeline of safe, innovative medicines is being researched, developed and made available to patients; all while achieving an optimal balance between healthcare costs and societal benefits,” said Aitken.
