1. Pharmaceutical Spending the United States
Allan Coukell
Senior Director, Health Programs
The Pew Charitable Trusts

2. Why are pharmaceuticals an issue?
Rising prescription drug costs
Up 8.4% in 2015 ($310B)
16.7% of total health spend
Specialty drugs are key driver
1% of all prescriptions but 37% of drug spending
Est. 50% of prescription drug spending by 2020
New drugs will increase spending $91B (projected, 2016 to 2020)
Some generic drugs rising too
$91B projection based on IMS pipeline analysis

3. Trends in Pharmaceutical Costs
All drugs – in-patient, out-patient, etc.

4. Cost Drivers in Drug Spending
Note: breakdown does not take into account rebates
units here – $ billions
generics bar combines utilization and price (including new generics)

5. Cost Drivers in Drug Spending
Note: breakdown does not take into account rebates
units here – $ billions
generics bar combines utilization and price (including new generics)

6. Cost Drivers in Drug Spending
Note: breakdown does not take into account rebates
units here – $ billions
generics bar combines utilization and price (including new generics)

7. Cost Drivers in Drug Spending
Note: breakdown does not take into account rebates
units here – $ billions
generics bar combines utilization and price (including new generics)

8. Cost Drivers in Drug Spending
Note: breakdown does not take into account rebates
units here – $ billions
generics bar combines utilization and price (including new generics)

9. Medicaid Prescription Drug Spending (2011-14)
Spending on Rx remained fairly constant from 2011 to 2013.
However, in 2014, both gross and net spending increased significantly, with net spending increasing 19% over the prior year.
Rebates have been in the percent range.
Source: MACPAC

10. Medicaid Prescription Drug Spending (2011-14)
Spending on Rx remained fairly constant from 2011 to 2013.
However, in 2014, both gross and net spending increased significantly, with net spending increasing 19% over the prior year.
Rebates have been in the percent range.
Source: MACPAC

11. FFS Medicaid Spending on Generics, 2014
Generics are 81% of Medicaid prescriptions but only about 20 percent of expenditures
Prices of most generics are not changing.
However, of the 20 drugs with highest per-unit cost increases in medicaid in 2014, seven were generic (ranging from 140% to nearly 500%)
Source: ASPE

12. American Are Concerned

13. Policy ideas in play Increased competition Limits on price
Faster generic, biosimilar access
Imports
Compounding
Limits on price
Thresholds
Extend rebates (e.g. California Proposition 61)
Transparency
R&D costs
PBM/price transparency
Value