U.S. prescription drug spending dips from 2011-12

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A new study says U.S. spending on prescription drugs dropped by 1 percent from 2011 to 2012 -- a $3.4 billion drop in the bucket that may signal the first decrease in pharmacy spending in at least five decades, if not longer.

The estimate, issued Thursday in a report from the IMS Institute for Healthcare Informatics, is in line with other studies that show health care spending flattening, or even decreasing on a per capita basis, thanks to lower health care utilization.

IMS, based in Connecticut, attributes the drop to the depressed medical spending climate, as well as a continued shift toward generic drugs. In addition, several popular medications lost their patent protection last year, allowing generics to grab market share.

Generic versions of prescription Lipitor (cholesterol), Plavix (anti-clotting) and Singulair (allergies and asthma) have all hit drugstore shelves in the last two years, and they cost a fraction of the brand-name drugs.

While total spending was down about a percent -- from $329.2 billion in 2011 to $325.8 billion in 2012 -- per capita prescription drug spending actually fell by 3.5 percent, to $898 per person.

It's the first decrease in prescription drug spending since IMS began tracking the figure back in 1957, the report says. The country's modern pharmacy system -- under which doctors prescribe medicine and pharmacists dispense it, with most such drugs available by "prescription only" and the rest available over the counter -- dates to 1951 and the Durham-Humphrey Amendment.

"The cost curve for medicines was clearly bent in 2012, for better or for worse," said Murray Aitken, executive director of the IMS Institute, in a statement. "To some extent, this is a harbinger of more efficient use of our healthcare resources, but it also reflects a decline in utilization that may be the result of under-treatment and an imbalance between prevention and care."

The prescription drug sales numbers fit into the larger narrative of the nation's medical spending slowdown. Two reports issued in February suggested health care expenses, while still growing, are growing at record-low levels.

A Feb. 7 report from the Altarum Institute, a Michigan-based health consultant, said growth in national health spending hit 4.3 percent in 2012, the fourth straight year of increases near 4 percent, the best such stretch in 50-plus years of record keeping.

That same week, the U.S. Congressional Budget Office revised its projected spending on Medicare and Medicaid over the next seven years, through 2020, based on cost models suggesting moderating cost increases and flat utilization trends.

Experts say the recession, high-deductible health plans and a low-inflation climate are all factors in the trend.

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Bill Toland: btoland@post-gazette.com or 412-263-2625.


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