Prescription Drug Use and Spending on the Rise

After an unprecedented drop in medication spending in 2012, the IMS Institute for Healthcare Informatics finds that per capita use and overall spending on medications in the United States increased in 2013.

Per capita use and overall spending on medications in the United States increased in 2013, and the overall use of health care services increased for the first time in 3 years, according to a report released on April 15, 2014, by the IMS Institute for Healthcare Informatics.

The report, titled Medicine Use and Shifting Costs of Healthcare: A Review of the Use of Medicines in the United States in 2013, reviewed the use and costs of prescription medications and health care services in the United States for 2013. The results indicate that Americans are using more services and receiving more prescriptions, contributing to increases in drug spending.

The number of physician office visits, hospitalizations, and prescriptions filled all increased in 2013. Compared with 2012, 1.6% more prescriptions were filled in 2013. On average, each American filled 12.2 prescriptions in 2013, a 0.9% increase over 2012. Per person medication use increased overall, but decreased among the largest per capita group of users: patients older than 65. In addition, patients aged 80 and older used 2% fewer prescriptions in 2013 than they did in 2012, but continued to use the most medications per-person.

Use of medications for conditions associated with declining treatment costs, such as hypertension and mental health, increased, while use of pain medications, especially narcotics, decreased. The report notes that declining use of pain medications was most likely driven by the FDA-mandated withdrawal of high-dose acetaminophen-containing opioid combinations, as well as the replacement of crushable forms of oxycodone with abuse-deterrent forms. The number of prescriptions for contraceptives jumped 4.6%, as the portion of patients with no co-pay for the medications increased from 20% in 2012 to 50% in 2013.

As use of medications and health care services rose in 2013, drug spending also increased. Overall, $329.2 billion was spent on medications in 2013, a 3.2% increase in sheer dollar terms, following the largest-ever decline of 1% in 2012. On a real per capita basis, spending on medications increased by 1.0%, after a 3.5% decrease in 2012. A major reason for the shift from a spending decrease to a spending increase was the declining influence of brand-name drug patent expirations. These expirations had a $10 billion lower impact in 2013 compared with 2012. Greater use of specialty drugs and the launch of new medications also contributed to the increase. Specialty prescriptions accounted for 29% of all medication spending in 2013, with spending on specialty drugs growing by 9% in 2013.

Although overall drug spending increased, the report found that most patients paid less for their prescriptions. Patients paid less than $5 per month for 57% of all prescriptions filled in 2013. The portion of prescriptions with no out-of-pocket costs for patients increased to 23%, largely driven by provisions in the Affordable Care Act requiring that preventive tests and treatments and contraceptives be provided at no cost to patients.

Nonetheless, total patient out-of-pocket costs are increasing. The report finds that 30% of total patient out-of-pocket costs are associated with just 2.3% of prescriptions, which are often for pricey specialty medications. Out-of-pocket costs for prescriptions also vary greatly by insurance type, with prescriptions costing far less for those covered by Medicare Part D and Medicaid than for those covered by private insurance.

“Following several years of decline, 2013 was striking for the increased use by patients of all parts of the US health care system—even in advance of full implementation of the Affordable Care Act,” said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics, in a press release. “Growth in medicine spending remains at historically low levels despite a significant uptick last year, and continues to contribute to the bending of the health care cost curve.”