Medicines Use and Spending Shifts: A Review of the Use of Medicines in the U.S. in 2014

In this report we bring together several perspectives on 2014: total system spending on medicines at an aggregate and segmented level; the evolution of healthcare demand, delivery and payment systems; patient out-of-pocket costs for medical and pharmacy benefits including retail prescription co-pays; and transformations in disease treatment resulting from newly approved medicines.

  Request the Report

Summary

Medicine spending increased at the highest rate since 2001, driven by innovative new medicines, lower patent expiry impact and higher list prices. Demand for healthcare services declined in 2014 despite this being the first year of insurance coverage for millions of people under the Affordable Care Act (ACA). Some newly insured individuals, particularly in Medicaid, drove a substantial increase in dispensed prescriptions. Hospital networks are increasingly integrated and coordination of care is seen as a key approach to improving outcomes and lowering costs in the ACA, but nationally health systems remain highly fragmented. Commercially insured patients face increasingly high deductibles, and reduced their prescription usage substantially in 2014.

Featured Videos

Below, IMS Institute Executive Director Murray Aitken discusses key findings in this report. Click here to view additional videos from this report.

Key Findings

Spending on medicines increased 13.1% in 2014, the highest level since 2001 when spending growth reached 17.0%

  • Nominal spending on pharmaceuticals reached $373.9 billion in 2014, an increase of 13.1%, the highest increase since 2001 when spending increased 17.0%
  • The sharp increase in spending in 2014 was driven by new brands, lower impact from patent expiries and increases in the list prices of branded medicines

Specialty medicines now account for one-third of spending driven by a wave of recent innovations

  • Spending on new brands increased by $20.2Bn in 2014, triple the previous level
  • Over 161,000 patients started treatment for hepatits C in 2014, more than four times the previous peak and nearly ten times more than in the previous year as spending on widely adopted new treatments totaled $12.3Bn
  • Specialty medicines now account for one-third of spending, driven by a wave of recent innovations in treatment for autoimmune diseases, hepatitis C and cancer
  • Specialty medicine spending increased by 26.5% to $124.1Bn in 2014; the increase was 16.3% excluding hepatitis C treatments
  • Increasing numbers of launches and growth in spending on specialty products in 2014 were driven by growing R&D focus on specialty medicines over the past decade

Medicaid was the leading driver of retail prescription growth in the first year of expanded coverage under the Affordable Care Act

  • Medicaid was the leading driver of retail prescription growth in the first year of expanded coverage under the Affordable Care Act
  • Overall Medicaid prescriptions increased 16.8% in 2014, accounting for 70% of the growth in retail prescription demand
  • Medicaid prescriptions increased 25.4% in states that expanded Medicaid coverage, and 2.8% in states that did not expand Medicaid coverage
  • Nearly a quarter of exchange plan patients and 9% of Medicaid patients may have been previously uninsured

Exhibits

The IMS Institute for Healthcare Informatics grants permission to use and reference this information, providing the IMS Institute report name and copyright information are clearly acknowledged. Exhibits may not be altered in any way.

Download each exhibit individually below, or click here to download all exhibits in a single document.

To save the exhibits to your hard drive, right mouse click and select "Save Target As" or "Save Link As."

Note: All third party trademarks contained herein are the property of their respective owners and their use herein is for informational purposes and does not imply sponsorship or endorsement of their products or services.

Please fill out the form below to request the IMS Institute Medicines Use and Spending Shifts: A Review of the Use of Medicines in the U.S. in 2014 report:

 

Required*