Expert: US Spending on Medicines in 2021 Was Higher Than in Recent History

Pharmacy Times interviewed Murray Aitken, executive director of IQVIA Institute for Human Data Science, on the increase in spending on medicines in 2021 in the United States and implications for the US health care system.

Alana Hippensteele: Hi, I’m Alana Hippensteele with Pharmacy Times. Joining me is Murray Aitken, executive director of IQVIA Institute for Human Data Science, who is here to discuss the increase in spending on medicines in 2021 in the United States.

So Murray, how much did spending on US medicines increase, and why might this increase have occurred?

Murray Aitken: So yes, we did see spending on medicines increase in 2021. We measure that at about 12.1% increase in 2021. So that is the highest level we've seen for quite some time. That brings the total amount spent on medicines to over $400 billion. It's a lot of money, however you look at it.

The main reason, not surprisingly, is the amount that we spent on COVID-19 vaccines and therapeutics—that definitely took the growth rate up. In fact, if you back those products out, then the growth was 4.9%. So it made a big difference, and I'm not sure anyone's too surprised by that being the major factor.

Alana Hippensteele: Right, absolutely. What did IQVIA data show regarding whether costs per prescription increased alongside this increase in overall spending in the US?

Murray Aitken: So measuring the cost per prescription is not an easy thing to do because there are many different types of prescriptions and so on. One thing we do do, though, is look at the total market. By that, I mean branded drugs, generics, and biosimilars, and we mean retail drugs, as well as those used in clinics and pharmacies, and small molecules, as well as biologics. So taking all of those prescription medicines, we have a metric we call a defined daily dose, and so we convert the volumes into defined daily doses.

The total number, by the way, last year was about $194 billion defined daily doses, if we divide that into the total amount spent on medicines, and this, by the way, excludes vaccines, we end up with an average of $2.27 per defined daily dose in 2021. That is up 3 cents from the prior year of $2.24 in 2020. That's the average. In general, this is what we observe, which is, in terms of the overall market, we see relatively small levels of growth, that doesn't mean that there aren't pockets of higher growth going on. I think a lot of that is what people focus on and gets a lot of attention. But when you step back and look at the at the total, the level of growth is actually quite modest on a per prescription basis.

Alana Hippensteele: Right, that's interesting. How about prescription drug use more broadly speaking, did prescription drug use for both chronic and acute care recover from the slowdown recorded in 2020? And if so, what are the implications of that?

Murray Aitken: Yeah, so we've been tracking the volume of drugs since the beginning of the pandemic against that baseline of the 2 months prior to the onset of the pandemic, we see different patterns for chronic and acute medicines.

For the acute, we saw a very significant disruption during the early part of the pandemic. They have continued to be at below average levels. Part of this is a consequence of the impact of social distancing and stay at home orders. Fewer children were in school, meaning fewer ear infections and so on. We also had a very light flu season last year. So all of these factors bring down the level of acute medicines being prescribed, and that decline has moderated since the beginning of the pandemic, but it's still below pre pandemic levels.

For chronic medicines, first off, we saw significant stockpiling at the very beginning of the pandemic. Since then we've actually seen the level of chronic prescriptions that are essentially refills, so continuing prescriptions, those have stayed very stable right at the level they were pre-pandemic. However, for chronic new to brand prescriptions, so whereas someone is going to see their doctor and beginning a new prescription, these have always been below the pre-pandemic baseline level. Even now, they're still sort of 2% to 5% below that baseline.

So this is also a reflection that we've had people not go to their doctors for their annual checkups and visits where oftentimes new brand prescriptions are prescribed. We continue to have this backlog of patients if you like. So this is something that is a concern. Of course, if there isn't a new prescription started then there's no refill either. So we expect to see that these chronic prescription volumes will remain below the pre-pandemic level for some time.