With pricing outcry raging, U.S. retail drug spending grew less than 1% last year: CMS

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Pharmaceutical spending grew 0.4% in 2017, a large decline from previous years. (Pixabay)

Congress and the Trump administration are riled up about pharma prices and promising to drive them down, but a new U.S. government report shows growth in retail drug spending screeched to a halt in 2017.

The data, released by the Centers for Medicare & Medicaid Services Thursday, show growth in spending on pharmacy-dispensed drugs slowed to 0.4% last year, down sharply from 2.3% in 2016—and even more sharply from the increases in 2015 and 2014, CMS reported. Retail drug costs for those years grew 8.9% and 12.4%, respectively.

Why the slowdown? For one thing, drugmakers pushed through lower price hikes, CMS said. Prescription growth also slowed, while more patients started on generics and generic prices dropped, the agency said.

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The CMS report only covers retail drug spending, which excludes drugs given in doctors' clinics and hospitals such as cancer and multiple sclerosis therapies. Increasingly, drugs in those classes have been growth engines for pharma as payers get aggressive trying to squeeze discounts in the retail class.

The new CMS data hit as drug prices continue to occupy center stage in Washington. After years of scrutiny on pharma’s pricing practices—and annual increases in prices and costs—Congress and the Trump administration have made the issue a priority. The FDA is approving generics at a record pace and prioritizing applications for drugs with little to no competition. The administration is working to force drugmakers to include prices in TV ads and lower certain U.S. prices closer to international levels, among a slew of other proposals.

Meanwhile, uncomfortable in the spotlight, many drugmakers have pumped the brakes on price hikes. Pfizer, for instance, raised prices this summer but backpedaled—at least temporarily—after the president slammed the company on Twitter. Trump tweeted that Pfizer "should be ashamed" about the move, and the company decided to defer price hikes. It now appears ready to raise them again in early 2019. 

RELATED: Pfizer, plotting 41 price hikes for January, returns to 'business as normal' after price-raising pause 

During the Pfizer controversy, other large drugmakers such as Novartis and Roche said they wouldn’t raise prices again in 2018. 

Editor's note: The fourth paragraph was added to clarify that the CMS report only covers retail drug spending. The word "retail" was also added to the headline.