It's one thing to read predictions that U.S. drug sales growth will slow to a crawl, but quite another to see it actually happen. In 2010, drug spending slowed to 2.3 percent, IMS Institute for Healthcare Informatics reports, almost three percentage points lower than the growth level in 2009. The struggling U.S. economy took its toll, but so did new generic rivals for major drugs and greater use of generics overall.
Though U.S. sales totaled a hefty $307.4 billion--$898 per person, on average--the volume of prescription drug use actually shrank on a per-capita basis. Demand for nearly every major therapeutic class declined. Perhaps that's because patients visited their doctors less often: 3.4 million fewer people started new treatments for chronic health problems compared with 2009. IMS blames continuing unemployment, loss of health insurance and increasing healthcare costs--along with more careful budgeting by some cost-conscious patients.
For more evidence of a troubled economy, look no further than payment records: Only 63 percent of dispensed prescriptions were covered by private insurance, while 30 percent of scrips fell to Medicare Part D or Medicaid. That's way up from 22 percent in 2006, the first year Part D was in effect.
But industry trends also constricted sales growth. Spending on new treatments dropped to $62 million from $114 million in 2006, because today's newer products are more heavily weighted toward orphan drugs for small patient populations, as well as "me-too" drugs similar to existing treatments, IMS said. Plus, the patent cliff threw more spending into the generics category, which now accounts for 78 percent of all drugs dispensed. Unbranded generic spending grew by 21.7 percent in 2010 alone, while spending on brands fell by almost 1 percent.
Obviously, the healthcare landscape is shifting significantly, IMS Director of Research Development Michael Kleinrock said in a statement. "Physicians and patients have more therapy options than ever, and yet spending on medicines is rising at historic lows with the impact of patent expiries and reduced patient activity," Kleinrock said. "The long-term effect on patient health of fewer doctor office visits and new therapy starts is unclear and requires closer attention."
Don't expect growth to rebound, either. The U.S. pharma market is set for low-growth mode for several years to come, experts say. No wonder drugmakers have turned to emerging markets--growing at double-digit rates--in hopes of boosting sales.
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