Medicines are a part of the solution
Value of Medicines
05.10.13 | By Liz Magsig
IMS’ latest report, Declining Medicine Use and Costs: For Better or Worse, reasserts the value that medicines provide in improving patients’ health and saving money on future health care costs. It’s also a great example of how and why the life cycle of medicines works so well.
The report found that in 2012, spending on pharmaceuticals was $325.8 billion, which is a one percent decline from 2011. This is also the first time that absolute spending on medicines declined.
The underlying drivers for a decrease in health care services were fewer patient visits to office-based physicians, fewer non-emergency admissions to hospitals and outpatient facilities, and a less severe flu season in the early part of 2012. The Congressional Budget Office (CBO) very recently confirmed that the use of medicines helps to reduce other Medicare costs like the ones mentioned above. In fact, the CBO announced a major change to its cost-estimating methodology that credits policies that increase the use of prescription medicines in Medicare with savings on other medical costs in Parts A and B.
Another highlight from this report is the decrease in spending on medicines. This can be attributed to the fact that 84 percent of the medications dispensed last year were generics and it’s expected to continue to increase to 87 percent by 2017. Patent expirations of name brand drugs contributed to a $28.9 billion reduction in medical spending.
Generic medications represent the final stage of the life cycle. Before they’re introduced into the market, an innovator biopharmaceutical research company has taken a brand-name medicine and led it through a long journey from idea to discovery, early-stage research and development to clinical trials, and regulatory review to patients. Savings from generic drugs are made possible due to innovator biopharmaceutical research companies and their pioneering scientific work.
For further information on how medicines are improving patients’ lives and producing savings, check out PhRMA’s page on value.