PHRMA

PhRMA Statement on Prescription Sales Growth Study

Washington, D.C. (March 12, 2008) — Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued the following statement today regarding an IMS study of U.S. prescription sales growth:

“Today’s study from IMS Health reinforces previous findings which demonstrate that prescription drugs make up a small share of health care costs in the U.S. Importantly, IMS’s findings are also at odds with a common misconception – that drug costs are skyrocketing and are responsible for an increase in health care costs.

“In fact, the 3.8 percent rate of increase is the lowest such rate since 1961, and it is expected to remain low: IMS estimates annual growth between 3 percent and 6 percent through 2012.

“The IMS findings also confirm previous data, released in January by the Centers for Medicare & Medicaid Services, demonstrating that drug costs in 2006 rose at a rate that was 5 percentage points below the average for the prior decade.

“Like prescription sales growth, the recent growth of prescription drug costs in the U.S. has been shown to be modest, with CMS estimating that drug price growth was 1.4 percent in 2007. Other government data reiterate this: according to the Consumer Price Index, the prices of prescription medicines have increased by less than the rate of overall medical inflation for the last several years. Ultimately, according to CMS, medicines accounted for roughly 10 percent of total health spending in the U.S. in 2006 – the same proportion as in 1960.

“The IMS findings confirm that physicians do their best to make objective decisions in the best interests of their patients, using the most up-to-date information available. America’s pharmaceutical companies are dedicated to the research that makes dissemination of that information possible.”

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $43 billion in 2006 in discovering and developing new medicines. Industry-wide research and investment reached a record $55.2 billion in 2006.

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