The Affordable Care Act and innovative biotech trends are having an impact on medication costs and healthcare spend generally, according to a new report by the IMS Health Institute for Healthcare Informatics. The report details medication costs in 2013 and shifting healthcare cost trends. Here are 10 of the most interesting findings in the report.
Primary care costs: Primary care therapy areas with significant innovation grew by 11 percent to $37 billion, according to the report. The largest amount of spending — $128 billion in 2013 – was in therapy areas with limited innovation or patent expires but still grew at 7 percent. Dermatology, pain and nervous system disorder treatments each had increased sales of $1 billion or more. A significant driver of growth in the market was price increases on protected brands — drugs that have not yet reached their patent expiration date — which contributed $20 billion to growth in 2013, up from $15.6 billion in 2012.
The largest driver offsetting positive spending growth was the group of primary care therapy classes affected by significant patent expirations, declining by 10 percent in 2013 to $80 billion in spending.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Specialty, innovative treatments for cancer, Hepatitis C and HIV rose 11 percent to $73 billion last year. Primary care therapy areas with significant innovation led by diabetes but which also included gastrointestinal products, obesity, urinary incontinence and novel formulations for Alzheimer’s treatments in aggregate, grew by 11 percent to $37 billion.
Patient adherence is routinely singled out as a factor in rising healthcare costs but what about payers? Patients abandon 3 percent of prescriptions at the pharmacy, but payers reject 6 percent, according to the report. It said reasons include issues with formularies and because prior authorization is required for expensive medicines. It may also stem from an insurer’s requirement that a generic medication be used prior to trying a branded drug.
ACA impact on contraceptive purchases: The ACA provision calling for no out-of-pocket cost for preventive tests and treatments and for contraceptives has dramatically reduced out-of-pocket costs for women in particular. They saved approximately $483 million in 2013 for contraceptives alone.
Outpatient visits to hospitals rose 3.2 percent to 13 million but inpatient admissions and ER visits were flat. Those were some of the desired goals of the Affordable Care Act.
Physician office visits rose for the first time in four years. Visits to specialists were higher than primary care physicians. The trend mainly stems from seniors and adult patient visits with specialists. For commercially insured folks, visits to general and orthopedic surgeons, psychiatrists, and pediatricians had all declined in 2012 and all saw significant increases in 2013.
Patients saved $789 million on prescriptions with no co-pay compared to the average co-pay for those medicines in 2012. Nearly three-quarters of the savings were for medication for five chronic diseases. The no co-pay provision of ACA took effect in 2012, but for most beneficiaries the change did not apply until January 2013.
Breakthrough therapy designations were granted for 30 drugs. It is the FDA’s new designation for fast-tracks drugs showing preliminary evidence of substantial improvement in patients with a life-threatening disease. Three drugs received breakthrough approval — two for blood cancers and one for hepatitis C.
Ten new cancer treatments were launched in 2013. It was the most in over a decade, and included treatments for blood cancers, melanoma, myeloma, breast and prostate cancers.
Making drug administration less complex: Eight of the medications that secured FDA approval last year were medicines with easier dosing. They included an epinephrine auto-injector that talks the user through the process, once-daily formulations of diabetes drugs, an inhalable form of an anti-psychotic drug, and a short three-day topical treatment for the prevention of skin cancer.
[Photo from flickr user Bill David Brooks]
