IMS: Rebates, discounts could take an $80B bite out of U.S. drug spending through 2018

U.S. spending growth on medicines is headed for a peak this year, IMS' annual spending report says. But as payers put the squeeze on drugmakers to put their best deal forward, that doesn't mean rebates and discounts won't be taking their toll on sales.

IMS Executive Director Murray Aitken

According to IMS' Global Outlook for Medicines Through 2018, the U.S. will shell out more than $350 billion on drugs this year--a big jump over 2013's $329.2 billion--thanks to the launch of innovative products (think Gilead's ($GILD) pricey new hep C stars Sovaldi and Harvoni), a less-severe patent-cliff hit and price hikes.

But as rising med prices and expanding healthcare coverage pile the budgetary pressure onto payers and PBMs, they're "aggressively seeking out lowest cost options," IMS Executive Director Murray Aitken told FiercePharmaMarketing in an email. And that will help spur drugmakers to offer rebates and off-invoice discounts that stand to reduce growth over the next 5 years by $60 to $80 billion globally, or about 20% to 25% of total growth.

As the market grows more competitive, some pharma companies may also find it harder to jack up prices. "Drugs that are competing in classes with significant molecules available as generics and many competitive products with limited clinical differentiation can expect to face difficulty in increasing prices," Aitken said.

In turn, while U.S. drug spending will increase each year through 2018, the spending growth rate will come down after this year, IMS predicts. Biosimilars will also do their part to tamp down that growth, bringing down spending on a "limited number" of biologic drugs during the forecast period, it said.

- download the report

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