U.S. Medicines Spending Grew in 2023 as Greater Access Offset COVID-19-related Decline, Says IQVIA Institute
May 14 2024 - 8:00AM
Business Wire
- Overall spending in the U.S. market for medicines grew 2.5% in
2023, reaching $435Bn at net price level, reflecting a sharp
decline in COVID-19 vaccines and therapeutics
- Spending growth was 9.9% when COVID-19 vaccines and
therapeutics are excluded, driven by innovation in areas such as
oncology, immunology, diabetes, and obesity
- Patient out-of-pocket costs increased due to the increasing use
of GIP/GLP-1 agonists, which are approved and widely reimbursed for
diabetes but are less commonly covered for obesity
- The number of patient visits, diagnostics and elective
procedures fell 4-6% in 2023, while new prescriptions rose 4%
Overall spending in the U.S. market for medicines grew by 2.5%
and reached $435Bn in 2023. Excluding the contribution from
COVID-19 vaccines and therapeutics, spending grew at 9.9%,
according to a new report from the IQVIATM Institute for Human Data
Science, The Use of Medicines in the U.S. 2024: Usage and Spending
Trends and Outlook to 2028.
The drop in COVID-19 vaccines and therapeutics masks the
significant growth in medicines that are bringing new clinical
advances to larger patient populations in oncology, immunology,
diabetes, and obesity.
“This is a story of two countervailing trends: A sharp decline
in the use of COVID-19 vaccines and therapies, which is offset by a
shifting usage pattern and a rapid acceleration in spending growth
driven by innovation that is bringing more effective medicines to
more patients,” said Murray Aitken, Executive Director of the IQVIA
Institute for Human Data Science. “Over the next five years, we can
expect continued growth in spending on medicines in the U.S. driven
by innovation, but offset by notable expiration events and
biosimilar introductions.”
Additional key highlights in the report include:
- Health services utilization: The IQVIA Health Services
Utilization Index – developed to provide a composite view of
multiple types of health services over time – tracks patient
visits, screenings and diagnostic tests, elective procedures, new
prescriptions and vaccinations. The Index fell to 97 for 2023, a
decline of 3% from 2022, reflecting a 4-6% reduction across all
indicators except for new prescriptions, which were up 4%. New
prescriptions for chronic and acute conditions were both above
pre-pandemic levels in 2023, reflecting continued growth of chronic
prescriptions and a resurgence of seasonal respiratory ailments
driving higher acute prescriptions. Flu vaccination rates fell by
17% from the 2022 level, and other routine adult and pediatric
vaccination rates remain below pre-pandemic levels.
- Medicine use: In 2023, total prescription medicine use
increased by 4% and reached 210 billion days of therapy. Non-retail
medicine use, including a large portion of cancer treatment, was
disrupted early in the pandemic but has seen a sharp rise,
especially in clinics and doctors’ offices. Retail prescriptions
reached 6.9 billion, a 2.9% increase from 2022 and down slightly
from the prior year. Many therapy areas had high growth in days of
therapy in 2023, including GLP-1 agonists in obesity and diabetes,
immunology treatments, lipid regulators, and gastrointestinal
medicines, all of which had increased use of more than 9% in
2023.
- Patient out-of-pocket costs: In aggregate, patient
out-of-pocket costs reached $91Bn in 2023, an increase of $5Bn over
the prior year. This amount is after $23Bn in copay assistance
programs provided by manufacturers, with patients using copay cards
for nearly one-third of brand commercial prescriptions in the top
10 therapy areas and 63% of obesity prescriptions. Both commercial
and Medicare patients have seen drug out-of-pocket costs rise,
while the amount paid by uninsured patients has declined due to a
smaller uninsured population – even as rising list prices have
exposed them to higher costs. More than 90% of prescriptions costed
patients less than $20, but 1%, or 71 million prescriptions,
exceeded $125.
- Medicine spending and growth drivers: The U.S. market at
net prices grew to $435Bn in 2023. Spending at list prices has
increased faster than all-payer net spending but far slower than
the spending eligible for 340B discounts, which includes children’s
hospitals, cancer and safety net hospitals, and which are entitled
to purchase at the lowest prices in the market. Variations in
growth at differing price levels highlight the complex interaction
between list prices and the varied discounts applicable to
different stakeholders. Total spending grew $10.4Bn in 2023, driven
primarily by $19Bn in spending on new brands, a $22Bn impact on
changes in the mix of medicines toward higher value medicines, and
offset by a $28Bn decline in COVID-19 spending and $17Bn impact of
expiries.
- Outlook to 2028: The U.S. spending forecast reflects
continued growth driven by innovation, offset by notable expiry
events. The next five years are expected to bring an increasing gap
between list price spending, which will grow at 6-9%, and
manufacturer net revenues, which will grow at 4-7%, including the
expected impacts of price negotiation and other aspects of the
Inflation Reduction Act. Oncology and obesity will drive growth
through 2028 while diabetes, immunology and COVID-19 will
contribute to decline. Net spending on diabetes will be flat to
2028 as wider adoption of novel therapies is offset by both list
and net price cuts. Immunology spending growth is expected to slow
to 2-5% through 2028 from the impact of biosimilars, while volume
increases 75% over the same period. Next-generation biotherapeutics
– including cell and gene and RNA therapies – are expected to reach
$18Bn by 2028, more than 3.5 times the current level.
About the IQVIA Institute for Human Data Science
The IQVIA Institute for Human Data Science contributes to the
advancement of human health globally through timely research,
insightful analysis and scientific expertise applied to granular
non-identified patient-level data.
Fulfilling an essential need within healthcare, the Institute
delivers objective, relevant insights and research that accelerate
understanding and innovation critical to sound decision making and
improved human outcomes. With access to IQVIA’s institutional
knowledge, advanced analytics, technology and unparalleled data,
the Institute works in tandem with a broad set of healthcare
stakeholders to drive a research agenda focused on Human Data
Science, including government agencies, academic institutions, the
life sciences industry, and payers. More information about the
IQVIA Institute can be found at www.IQVIAInstitute.org.
About IQVIA
IQVIA (NYSE:IQV) is a leading global provider of advanced
analytics, technology solutions, and clinical research services to
the life sciences industry. IQVIA creates intelligent connections
across all aspects of healthcare through its analytics,
transformative technology, big data resources, extensive domain
expertise and network of partners. IQVIA Connected Intelligence™
delivers actionable insights and powerful solutions with speed and
agility — enabling customers to accelerate the clinical development
and commercialization of innovative medical treatments that improve
healthcare outcomes for patients. With approximately 87,000
employees, IQVIA conducts operations in more than 100
countries.
IQVIA is a global leader in protecting individual patient
privacy. The company uses a wide variety of privacy-enhancing
technologies and safeguards to protect individual privacy while
generating and analyzing information on a scale that helps
healthcare stakeholders identify disease patterns and correlate
with the precise treatment path and therapy needed for better
outcomes. IQVIA’s insights and execution capabilities help biotech,
medical device and pharmaceutical companies, medical researchers,
government agencies, payers and other healthcare stakeholders tap
into a deeper understanding of diseases, human behaviors and
scientific advances, in an effort to advance their path toward
cures. To learn more, visit www.iqvia.com.
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Kerri Joseph, IQVIA Investor Relations (kerri.joseph@IQVIA.com)
+1.973.541.3558
Trent Brown, IQVIA Media Relations (trent.brown@iqvia.com)
+1.919.780.3221
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