Prescription drug spending was flat in 2011

TRENTON, N.J.�Spending on prescription drugs in the U.S. was nearly flat in 2011 at $320 billion, held down by senior citizens and others reducing use of medicines and greater use of cheaper generic pills.

Last year, spending on prescription drugs rose just 0.5% after adjusting for inflation and population growth, according to data firm IMS Health. Without those adjustments, spending increased 3.7% last year. The volume of prescriptions filled fell about 1%.

That continues a trend of restrained spending that began in 2007, when prescription spending dipped 0.2%. Before then, IMS generally reported annual spending increases of several percent. But since the start of the Great Recession, prescription spending has fallen or risen only slightly each year except for 2009.

IMS said Wednesday that it appears patients are still rationing their health care, with visits to doctors down 4.7% and hospital admissions down 0.1%. However, emergency room visits jumped 7.4%, a sign some people aren't seeking care until they are very sick.

"We think we've reached a tipping point, where people are thinking they're paying too much and they're changing their behavior" and getting less treatment, said Michael Kleinrock, head of research development at the IMS Institute for Healthcare Informatics.

Fewer visits to doctors and other health care providers results in fewer prescriptions, which holds down spending in the short term. But that doesn't bode well for future health care costs, because many of the medicines people are doing without are taken for years to prevent heart attacks and other expensive complications of chronic conditions such as heart disease and diabetes, Kleinrock said.

"The ultimate result is that we will have more sick people driving health care costs" down the road, he said.

People age 65 and older cut back on the number of prescriptions filled by 3.1% last year, particularly for medicines for high blood pressure. That was despite a 10% decline in average prescription co-payments under the Medicare Part D program, to $23.31, due to bigger discounts when patients hit the so-called doughnut hole coverage gap.

Only one group increased prescription use last year. People age 19 to 25, now able to stay on their parents' health insurance plans under a provision of the Patient Protection and Affordable Care Act, boosted their use of prescription medicines 2%. That was led by more use of antidepressants and attention deficit disorder drugs.

Kleinrock noted the data indicate people with and without insurance are all having trouble paying for medicine and other health care, and so are limiting or postponing treatment. For instance, insured patients spent $1.8 billion less out of pocket last year, at a total of $49 billion.

Meanwhile, use of inexpensive generic medicines continues to climb, hitting 80% of all prescriptions filled last year. That growth is fueled both by patients trying to save money and by the start of an avalanche of blockbuster medicines, many for chronic conditions, losing patent protection.

Cholesterol fighter Lipitor, the top-selling drug in history with a $13 billion-a-year peak, got its first U.S. generic competition Nov. 30. This year, generic competition arrives for drugs taken by millions of people for high blood pressure, diabetes, asthma and allergies, depression, schizophrenia and prevention of blood clots that can cause heart attacks and strokes.

The institute's annual report shows patient restraint and increased use of generics are offsetting factors that usually push up spending on prescriptions significantly, particularly use of pricey, newly approved medications.

Last year, 34 new prescription medications were launched in the U.S., the most in a decade. They brought significantly better treatments to more than 20 million Americans with life-threatening conditions, including cancer, hepatitis C, heart disease and multiple sclerosis. But the new drugs carry big price tags, with most costing tens of thousands of dollars for a year or a course of treatment.

Prescription drug revenue also was boosted by price increases for existing medications and by the newly insured young adults.

In an interview, Kleinrock said he doesn't see the current trends changing anytime soon. Given that, he expects prescription sales to be flat or up 1% in 2012, and to decline as much as 2% after adjusting for inflation and population growth.

Prevention Just Makes Sense

�Prevention� is a word we use a lot in health care � June is �National Prevention and Wellness Month� � but I want to take a minute to think about what it really means.

Intuitively, prevention makes sense: as the saying goes, you can either pay now or you can pay later. But oddly enough, our health care system often doesn�t reflect this fundamental mindset. Most health care focuses on treating disease. Prevention, on the other hand, focuses on health.

Preventive care is also patient-centered care, as people become active participants in maintaining their health and get services customized for their individual needs and preferences.

We know that prevention works. The Affordable Care Act provides new ways to help patients stay healthy and makes access to preventive services easier.

Today, the Centers for Medicare and Medicaid Services (CMS) released a new report showing that more than 5 million Americans with traditional Medicare, or nearly one in six people with Medicare, took advantage of one or more of the recommended preventive benefits now available for free thanks to the Affordable Care Act � most prominently, mammograms, bone density screenings, and screenings for prostate cancer.

These are just a few of the preventive services available to people on Medicare. Earlier this year, Medicare eliminated the Part B deductible and copayments for a host of preventive services, including bone mass measurement, some cancer screenings, diabetes and cholesterol tests, and flu, pneumonia, and hepatitis B shots.

We�ve also eliminated out-of-pocket costs for the �Welcome to Medicare� preventive visit and, for the first time since the Medicare program was created in 1965, Medicare now covers an annual wellness visit with a participating doctor, also at no cost.

We�ve added expanded prescription drug benefits to the preventive arsenal as well. This year, people with Medicare started to benefit from a 50% percent discount on covered brand name drugs bought when they�re in the donut hole, and we�ll continue to chip away at the donut hole until it�s closed in 2020. Making prescription drugs more affordable increases the chance they�ll be taken as needed. Again � prevention just makes sense.

Find out which preventive services are right for you by taking this checklist to your doctor or other health care provider.

Our job now is to ensure that everyone eligible for Medicare uses these benefits. We need to encourage every person with Medicare, every caregiver, every physician to join our nationwide campaign for prevention. We are calling our campaign, Share the News, Share the Health, which will run throughout the summer, with online ads and community events all over the country starting in July.

Focusing on prevention doesn�t just improve care � it�s also an important step in reducing the cost of health care. The financial costs of treating chronic diseases like heart disease, cancer and diabetes are enormous. Add in the intangible costs of pain and suffering, and the very real economic costs of lost productivity, and the opportunity costs of chronic illness are simply unacceptable.

This is why we�re also working closely to incorporate best practices from the Centers for Disease Control, particularly around ways to reduce cardiovascular mortality. This type of collaboration is critical to moving us towards a prevention-based model of care.

Focusing on prevention also makes sense when we value treating the whole patient � not just a condition or disease. When we help people take better care of their health, everyone in the community benefits. If we wait to pay for care as illness progresses, the price of health care for the country will continue to rise.

Prevention just makes sense.