Growth in prescription spending had slowed, but increased rapidly in 2014 and 2015 Average annual...

Peterson-Kaiser Health System Tracker

What are the recent and forecasted trends in prescription drug spending?


Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) Historical (1960-2014) and Projected (2014-2024) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group (Accessed on December 7, 2015) Note: 2014 to 2015 percent changes are calculated using 2014 actual and 2015 projected amounts.

Growth in prescription spending had slowed, but increased rapidly in 2014 and 2015

Average annual growth rate of prescription drug spending per capita for 1970’s – 1990’s;Annual change in actual prescription drug spending per capita 2000 – 2014 and projected prescription drug spending per capita 2015 - 2024

1970

s

1980

s

1990

s

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

7.1%

11.8%

10.4%

14.7%13.7%

12.6%

10.9%

8.1%

5.4%

8.2%

4.2%

1.5%

3.8%

-0.7%

1.5%

-0.6%

1.6%

11.4%

0.0962566844919786

0.0360975609756098

0.0517890772128060.04744852282900630.05128205128205130.05528455284552850.05624036979969180.05762217359591540.05793103448275860.0586701434159061

Prescription (Actual)Prescription (Projected)Total Health (Actual)Total Health (Projected)


Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) Historical (1960-2014) and Projected (2014-2024) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group (Accessed on December 7, 2015)

Estimates suggest that Rx drugs will represent a larger portion of overall health spending beginning in 2014Percent of total health spending that went toward prescription drugs, 2000 – 2014

Percent of projected health spending that is projected to go toward prescription drugs, 2015 - 2024

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

20182019

20202021

20222023

20240%

2%

4%

6%

8%

10%

12%

Actual Projected



Out-of-pocket spending on hospital care fell in 2014, but grew for Rx drugs

Actual per capita out-of-pocket health spending 2000 – 2014, and projected per capita out-of-pocket health spending (2015 – 2024) on hospitals, physicians and clinics, and retail prescription drugs

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

$0

$50

$100

$150

$200

$250

Physicians & Clinics (Actual)Physicians & Clinics (Projected)Rx (Actual)Rx (Projected)Hospital (Actual)Hospital (Projected)


Very easy; 45%

Somewhat easy; 27%

Somewhat difficult; 16%

Very difficult; 8%

Don't have to pay; 3% Dk/Ref; 1%

Source: Kaiser Family Foundation Health Tracking Poll (conducted Aug 6 – 11, 2015)

Most people taking Rx drugs say they can afford their treatment, but about 1 in 4 have a difficult time affording their medicineAmong those who are currently taking Rx medicine, percent who report ease or difficulty affording the cost of their prescription medications



Out-of-pocket costs for Rx drugs are expected to increase, but will likely represent a smaller portion of overall Rx spendingPercent of total Rx spending 2000 – 2014, and percent of projected Rx spending (2015 – 2024) by out-of-pocket vs. private insurance and Medicare

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

0%

10%

20%

30%

40%

50%

60%

OOP (Actual)OOP (Projected)Private (Actual)Private (Projected)Medicare (Actual)Medicare (Projected)


Source: IMS Institute for Healthcare Informatics. Medicines Use and Spending Shifts: A Review of the Use of Medicines in the U.S. in 2014.

Drug spending jumped in 2014 due to new brands, higher prices for existing drugs, and fewer patent expiries Contribution to growth in drug spending, by spending growth drivers, in $US billions, 2010 -2014

2010 2011 2012 2013 2014-$40

-$20

$0

$20

$40

$60

$80

$10.4 $7.2 $8.5 $5.7 $9.5$4.6 $6.4 $5.7 $6.5

$20.2$16.6 $17.9 $15.6 $20.3

$26.3

-$1.4 -$4.2 -$2.9 -$2.1 -$0.7

-$14.7 -$14.3-$29.3

-$19.6-$11.9

Generics New Brands Protected Brands PriceProtected Brands Volume Patent Expiries


Source: Express Scripts 2014 Drug Trend Report and Year in Review . Available at http://lab.express-scripts.com/drug-trend-report/ and http://lab.express-scripts.com/drug-trend-report/introduction/year-in-review

Costly new specialty drugs are a major driver of increased health spending

Express Scripts drug trend by therapy class, 2006 -2014

2006 2007 2008 2009 2010 2011 2012 2013 2014-5%

0%

5%

10%

15%

20%

25%

30%

35%

14.1%

30.9%

2.4%

6.4%

Specialty Drug Trend Traditional Drug Trend Overall Drug Trend

Peterson-Kaiser Health System TrackerSource: PwC Health Research Institute

Since 2010, more specialty drugs have been approved than traditional drugs

Number of approved drugs, by therapy class, 2005 -2014

2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

5

10

15

20

25

30

22 22

18

2324

12

17

21

9

24

67

8 810

14

18

22

19

27

Traditional drug approvals Specialty drug approvals

Peterson-Kaiser Health System TrackerSource: Express Scripts 2014 Drug Trend Report

Medications for inflammatory conditions and multiple sclerosis topped specialty drug spending in 2014Express Scripts per-member-per-year spending, top 10 specialty therapy class drugs, 2014

Transplant

Pulmonary Arterial Hypertension

Hemophilia

Growth Deficiency

Miscellaneous Specialty Conditions

HIV

Hepatitis C

Oncology

Multiple Sclerosis

Inflammatory conditions

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90

$5.13

$5.41

$5.49

$9.98

$11.10

$27.24

$37.95

$41.64

$52.36

$80.03

Peterson-Kaiser Health System TrackerSource: Express Scripts 2014 Drug Trend Report

Diabetes medicines topped traditional drug spending in 2014, and were double the second leading categoryPer-member-per-year spending on top 10 traditional therapy class drugs, 2014

Mental/Neurological disorders

Depression

Attention disorders

Asthma

Heartburn/Ulcer Disease

High Blood Pressure/Heart Disease

Pain/Inflammation

Compounded Drugs

High Blood Cholesterol

Diabetes

$0 $20 $40 $60 $80 $100 $120

$24.85

$25.98

$27.97

$29.59

$33.40

$36.06

$45.98

$46.04

$48.73

$97.68

Peterson-Kaiser Health System TrackerSource: Source: Kaiser Family Foundation analysis of Bureau of Economic Analysis data

Growth in price and utilization of pharmaceuticals has varied over the past 2 decadesAnnual percent change in price and quantity indexes of pharmaceutical and other medical products, index numbers 2009=100

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20140%

2%

4%

6%

8%

10%

12%

14%

Price Index Quantity Index


Source: Express Scripts 2014 Drug Trend Report and Year in Review . Available at http://lab.express-scripts.com/drug-trend-report/trend-drivers/the-express-scripts-prescription-price-index

Generic drug prices have declined while branded drug prices have nearly doubled in priceExpress Scripts Prescription Price Index

2008 Q2 Q3 Q4 2009 Q2 Q3 Q4 2010 Q2 Q3 Q4 2011 Q2 Q3 Q4 2012 Q2 Q3 Q4 2013 Q2 Q3 Q4 20140.00

50.00

100.00

150.00

200.00

250.00

Brand Prescription Price Index Generic Prescription Price Index Consumer Price Index


Source: International Federation of Health Plans Notes: U.S. average prices are calculated using commercial claims data from Truven MarketScan Research databases. Methods and sources for comparable countries can be found here: http://www.ifhp.com/1404121

The average price of Celebrex in the U.S. is about 63% higher than in Switzerland

Average Price, 2013

Canada Netherlands England Switzerland United States$0

$50

$100

$150

$200

$250

$51

$112 $112

$138

$225


Netherlands England Switzerland United States$0

$50

$100

$150

$200

$250

$23

$42

$60

$215

The average price of Nexium in the U.S. is almost 3 times more than the average price in SwitzerlandAverage Price, 2013



The average price of Humira is about 15% higher in the U.S. than in Canada

Average Price, 2013

Switzerland England Netherlands Canada United States$0

$500

$1,000

$1,500

$2,000

$2,500

$881

$1,102

$1,498

$1,950

$2,246



The average price of Enbrel in the U.S. is about 35% higher than in Canada

Average Price, 2013

Switzerland England Netherlands Canada United States$0

$500

$1,000

$1,500

$2,000

$2,500

$1,017$1,117

$1,509$1,646

$2,225



The average price of Copaxone in the U.S. is almost 3 times the average price in Switzerland

Average Price, 2013

England Netherlands Switzerland United States$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$862

$1,190$1,357

$3,903



The average price of Cymbalta in the U.S. is 76% more than the average price in Canada

Average Price, 2013

England Netherlands Switzerland Canada United States$0

$50

$100

$150

$200

$250

$46 $52

$76

$110

$194



The average price of Gleevec in the U.S. is 71% more than the average price in Switzerland

Average Price, 2013

Canada England Netherlands Switzerland United States$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$1,141

$2,697

$3,321$3,633

$6,214



The average price of Gilenya in the U.S. is more than double the average price in Canada

Average Price, 2013

England Netherlands Switzerland Canada United States$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$2,299 $2,428 $2,499 $2,541

$5,473



Drugs count for a bigger share of health spending than many think

Retail drugs as a share of national health spending and as a share of employer health benefits, 2013

Retail Drugs as a Share of National Health Spending Retail Drugs as a Share of Employer Insurance Benefits0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

10%

19%

Source: Kaiser Family Foundation analysis of data from the Centers for Medicare and Medicaid Services and Truven Health Analytics

Growth in prescription spending had slowed, but increased rapidly in 2014 and 2015 Average annual...

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