New therapies are transforming care for patients fighting debilitating diseases like cancer, hepatitis C, high cholesterol and more. In the midst of all this progress, the share of spendings on retail medicines remains the same as it was 50 years ago. In fact, government actuaries project the share of health care spending attributable to retail and physician administered medicines will continue to grow in line with overall health care cost growth for at least the next decade. To put spending on medicines in perspective, the growth in other health care services will be five times total medicine spending growth through the next decade.
This is possible due to a competitive marketplace for medicines where costs fall dramatically as competition occurs among brand name medicines – and even further with the introduction of generics. Innovator companies invest in research to develop new medicines, and, over time, they become available as lower-cost generic versions that typically cost up to 80 percent less. And all the while, pharmacy benefit managers (PBMs) and insurers aggressively negotiate the prices of the medicines they cover.