PharmExec Blog

Pharma Feels Delayed Effects of Economic Crisis

A new study from the IMS institute for Healthcare Informatics reveals that the spending increase on prescription medication in 2010 was the second-lowest increase in more than half a century.

According to the IMS Institute for Healthcare Informatics, spending on prescription medications increased 2.3 percent in 2010 — a lower increase than the 5.1 percent growth rate reported in 2009. IMS Institute’s new study, The Use of Medicines in the United States: Review of 2010, reports that total dollars spent on medication in the US reached more than $307 billion last year — and while the volume of prescription medications consumed overall did rise in 2010, the increase was historically low.

“It’s the second-lowest spending growth rate we’ve ever recorded in our 55 year history,” says Michael Kleinrock, director of research development at IMS Institute and one of the primary authors on the report. “The only lower one was 2008. Contrary to the perspective that’s generally understood — that spending growth, sometimes called sales growth, is extremely high — what we’ve actually seeing is that it’s at or below levels of overall healthcare spending, for most of the last five years.”

The report also finds that, in 2010, doctor visits were down 4.2 percent; the number of patients starting new treatment for chronic conditions decline by 3.4 million; average co-pays were down by 2 cents largely due to generics usage; and prescriptions filled under Medicare part D or through Medicaid represented 30 percent of all scrips filled, up 8 percent since 2006.

“What that reflects to me is the delayed impact of the economic crisis,” says Kleinrock. “Specifically when we look at fewer doctor visits, that’s concentrated in older adults, as opposed to seniors or young people. That is reasonably consistent with how the economic crisis impacted that generation more in terms of unemployment, and therefore lost health insurance. It’s a slow impact, because medicines are necessary and essential for patients.”

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