Two-hundred biotech allies from more than 40 different states visited Washington D.C. this week. These advocates met with policymakers on Capitol Hill and in the administration to share BIO’s vision and policy priorities for a strong biotech industry.
When it came to the topic of prescription drug costs, part of our message to both Republican and Democratic lawmakers was that facts matter. And the facts are that we are on the cusp of amazing biopharmaceutical breakthroughs and the trend on prescription drug costs is heading in the right direction. Both are wins for patients and society more broadly.
A new report released by the IQVIA Institute — a health care data analytics firm — helps reaffirm these and other facts that are often ignored. The report is IQVIA’s annual review of medicine use and spending on prescription drugs, and their most recent report takes a close look at what happened in 2017. Here are four key takeaways:
Prescription drug costs are remarkably stable. IQVIA reports that national spending on prescription drugs increased less than 1% last year. Looking at retail and mail-order pharmacies only, where the vast majority of patients purchase medicines, spending actually declined 2.1%. Furthermore, this slow trend is expected to continue in the coming years, with growth projected to be in the 2-5% range annually for the next five years, well in-line with expected overall healthcare spending trends. Brand-name drug prices are remarkably steady too. The average net price for patented brand name drugs grew less than 2% in 2017, which is below the rate of inflation.
Competition in the marketplace is working. An estimated 90% of all drugs dispensed in the U.S. are lower-cost generics, up from 72% a decade ago. Additionally, generics were dispensed 97% of the time “it was possible to do so.” Looking at the next five years, competition from generics and biosimilars is expected to decrease the sales of brand-name drugs by $105 billion. This is further proof that our drug discovery ecosystem strikes the right balance between the need for both continued innovation and affordable access.
Drugmakers continue to provide substantial discounts and rebates to lower overall costs. While many news stories and industry critics focus on headline-grabbing list prices for new medicines, the reality is that manufacturers continue to provide substantial discounts, rebates, and other price concessions that substantially lower the cost burden. Last year, that amounted to nearly $130 billion in total savings. Unfortunately, for far too many patients, their out-of-pocket costs for drugs do not take these rebates into account. It’s time for all insurers to pass these savings along to patients.
Innovation is happening at a rapid pace. The IQVIA report highlights the amazing advances taking place aimed at helping patients with cancer and rare diseases. IQVIA notes that new drug launches “rebounded in 2017,” with 21 new drugs tackling rare diseases and 14 new cancer therapies. This innovation is occurring thanks to the hard work and dedication of the biopharmaceutical community, but also because of “significant shifts in the regulatory process.”