Prescription Volume, Spending Increasing in 2011

Atlanta—Total prescription volume and spending on medications both increased in 2010, but the growth rate was the second lowest in the past 10 years. Through the first 6 months of 2011, the rates were better than a year ago, thanks to cough, cold, and flu medications and a longer allergy season. However, Douglas Long, MBA, vice president of industry relations at IMS Health, Inc, predicted that the growth will slow down for the remainder of 2011. At the AMCP meeting, Mr. Long provided a comprehensive overview of recent industry data in a Contemporary Issues session titled Emerging Issues and Trends in Managed Care Pharmacy and Health Care. Generic drugs are continuing to become more prevalent. In 2010, generics accounted for 75.5% of prescriptions dispensed and 19.9% of spending compared with 61.2% and 15.6%, respectively, in 2006. During the first 6 months of 2011, 77.8% of drugs were generics, which accounted for 21.0% of spending. With several brand drugs losing patent protection in the next few years, generics will account for 86% of the market in 2015, according to Mr. Long. He predicted that the percentage will decrease after 2015 because generics manufacturers will not have many opportunities remaining with small molecules. “This is a good time to be in the generics industry and not so much in the brand industry,” Mr. Long said. “But that doesn’t mean it won’t change.” In 2010, total prescription volume reached 3.99 billion (up 1.2% from 2010), while spending on medications reached $307 billion (up 2.3% from a year earlier). Through June 2011, sales increased 4.1% and total volume increased 2.1%, but Mr. Long said it will be closer to 3% and 1.5% growth, respectively, by the end of 2011. Several factors contributed to the slow growth in 2010, according to Mr. Long. Fewer people visited physicians because of the poor economy and increased healthcare costs, patents on popular brand drugs expired, protected brand drugs had weaker-than-expected financial performance, generics expanded, and spending on new products decreased. Certain areas, such as generics, biologics, and injectables, were bright spots for the industry in 2010. Whereas spending on brand drugs in 2010 decreased 0.7%, spending on branded generics increased 4.5% and spending on generics increased 21.7%. Also, spending on small-molecule drugs increased 0.5%, while spending on biologics increased 6.6%. In addition, spending on oral medications decreased 0.1% in 2010 compared with a 5.7% increase on injectables. Through June 2011, more people decided to forego seeing a physician, with visits down 5% compared with 2010. There was also a continued decline in brand medications, with a 10% decrease in prescriptions. The trend is likely to continue, as $102 billion worth of brand drugs are expected to lose their patents between 2011 and 2015. From 2006 to 2010, $80 billion of brand drugs’ patents expired. Mr. Long said growth areas include products to treat multiple sclerosis, antipsychotics, diabetes, HIV, and autoimmune diseases. As for the pharmaceutical pipeline, the largest category is oncology drugs, followed by medications intended for the central nervous system. According to IMS Health data, lipid regulators was the leading class of drugs on a dollar basis on a moving annual total calculation through June 2011, accounting for 5.7% of the $314-billion industry. Other top classes included antipsychotics (5.4% share), antidepressants (3.7%), proton pump inhibitors (3.4%), antineoplastic monoclonal antibodies (2.6%), analogs of human insulin (2.6%), angiotensin II antagonists (2.5%), antiarthritic biologic response modifiers (2.4%), platelet inhibitors (2.4%), and analeptics (2.3%). On a total prescriptions basis, antidepressants were the leading class with a 6.3% market share, followed by lipid regulators (6.1%), codeine and combinations (5.3%), angiotensin-converting enzyme inhibitors (4.1%), beta-blockers (3.2%), proton pump inhibitors (3.0%), antiseizure agents (2.9%), thyroid hormone synthesis inhibitors (2.6%), calcium blockers (2.4%), and benzodiazepines (2.3%). The top pharmaceutical products on a dollar basis were Lipitor (2.4% market share), Plavix (2.1%), Nexium (2.0%), Abilify (1.6%), Advair Diskus (1.5%), Seroquel (1.4%), Singulair (1.4%), Crestor (1.3%), Actos (1.2%), and Enbrel (1.1%). On a total prescription basis, the top drugs were Watson’s hydrocodone and acetaminophen (1.5%), Covidien’s hydrocodone and acetaminophen (1.1%), Lipitor (1.1%), levothyroxine (1.1%), lisinopril (1.0%), simvastatin (0.8%), Plavix (0.7%), Singulair (0.7%), Nexium (0.7%), and metoprolol tartrate (0.7%). In the coming years, Mr. Long said the government will have an increased role in the industry through healthcare reform, Medicare Part D, Medicaid, generic user fees, changes to reimbursement, US Food and Drug Administration inspections, Risk Evaluation and Mitigation Strategies programs, rules for biosimilar pathways, and patent settlements. Mr. Long said the pharmaceutical industry, like most other segments of the economy, is facing difficult conditions due to slow market growth, the increasing reliance on generic drugs, tighter government regulations, problems with adherence, fewer doctor visits, lack of innovation, and other factors. “No matter where you are, you have challenges,” Mr. Long said. “But this is a cyclical market. Just because you see a trend today, it doesn’t mean it will be a trend tomorrow.”