Reuters Health Information: Drug spending tops $1 trln on hepatitis C, cancer therapies -study
Drug spending tops $1 trln on hepatitis C, cancer therapies -study
Last Updated: 2014-11-20
By Caroline Humer
(Reuters) - Global pharmaceutical spending will break the
trillion dollar mark in 2014, driven by high prices in the
United States for novel treatments such as Gilead Sciences Inc's
Sovaldi for hepatitis C and new cancer drugs, according to a
study released on Thursday.
Total spending on drugs will hit $1.06 trillion, an increase
of 7% over 2013 levels, according to the report from the IMS
Institute for Healthcare Informatics. The increase also
reflected a slowdown in the introduction of cheaper generic
versions of branded medicines.
By 2018, IMS expects spending to rise to $1.3 trillion due
to new breakthrough therapies.
Hepatitis C drugs will add about $100 billion in total
spending in the next few years, while cancer spending will rise
to $100 billion and diabetes care will account for another $78
billion. Cancer drugs contributing to the high cost include
Roche Holding AG's Perjeta and Kadcyla, Pharmacyclics Inc's
Imbruvica and Amgen's Kyprolis.
Drugmakers have come under pressure over high U.S. prices,
particularly Sovaldi's list price of $1,000 per pill. State
Medicaid offices and private insurers say the prices are too
high to bear, while drugmakers defend them as reflecting the
wider cost of developing medicines, many of which they say will
never make a profit.
U.S. spending accounts for about one-third of the total drug
spend and is due to rise 11.7% in 2014 before the growth rate
slows to an annual 5% increase after 2015.
IMS's spending figures do not take into account manufacturer
rebates, coupons and discounts, particularly in the United
States, which will lower spending by about one half a percentage
point during that time period, or $60 billion to $80 billion. In
the 2009 to 2013 period, there was an estimated $63 billion in
rebates, IMS said.
"Within the U.S. market, we are seeing in aggregate higher
levels of rebate, especially in the diabetes and respiratory
therapy areas," said Murray Aitken, executive director of the
IMS Institute for Healthcare Informatics.
Rebates typically increase for drugs that are about to go
off patent, then disappear once they are off patent, Aitken
He declined to discuss specific drugs such as Lantus, which
Sanofi said recently was coming under intense price pressure
from U.S. insurers, and is due to go off patent in 2015.