It probably won’t surprise anyone that Covid-19 has pushed up U.S. drug spending. Now we can give it an actual number.According to IQVIA, drug spending to $407 billion In 2021, a 12% increase from the previous year.
At the same time, the market for non-Covid medicines is also growing, but to a lesser extent. The 5% increase in spending on these drugs was impacted by biosimilars, which gradually offset the use of branded biological products.These figures come from IQVIA’s recently released 2022 U.S. Drug Trends ReportIQVIA, a life sciences analytics and clinical research company based in Durham, North Carolina, produced this report independently without any government or industry funding.
Americans overall are taking more drugs, the report shows. Based on daily doses, IQVIA noted a 9.6 percent increase in drug use over the past five years. The vast majority of these products are retail pharmaceuticals, such as those dispensed from pharmacies. The report said the decline in drug use in non-retail settings such as hospitals reflected a decline in elective surgery. Fewer elective procedures have also caused opioid prescriptions to plummet, continuing a trend from five years ago, the report said.
New drugs launched in the past two years led to drug spending of $46.4 billion in 2021, up from $18.8 billion the previous year. Spending on Covid-19 vaccines and treatments will be $29 billion in 2021, up from $3 billion in 2020, the report said. In the absence of new Covid-19 products, spending on new pharmaceutical products will decline.
Not all vaccination news is good during the pandemic. IQVIA counts more than 7 million childhood vaccine doses missed since March 2020. Adult vaccinations remained at pre-pandemic levels in 2020 and increased slightly in 2021 due to a surge in pneumococcal vaccines. But IQVIA added that this growth has not kept pace with population growth among the elderly, a population that needs these vaccines. However, flu vaccines have grown over the past winter and are well above pre-pandemic levels amid concerns that the flu and the new coronavirus could lead to a severe respiratory virus season.
The pandemic has caused many to delay or cancel medical services. IQVIA said that by the end of 2021, the use of health services had returned to pre-pandemic levels, although there were still a large number of missed patient visits and screenings. Elective procedures and the start of new prescriptions also need to catch up.
Covid-19 drove the increase in prescriptions, but this increase was offset by a decline in new prescriptions, which were 20% below baseline during the pandemic and recovered to 5% below baseline in the first quarter of this year. The decline in drug use in long-term care facilities may be due to the increased mortality in these locations due to the pandemic. Prescribing in most therapeutic areas rebounded in 2021 following a pandemic disruption in 2020, the report said.
Telemedicine is another area of healthcare that has seen growth due to Covid-19. Before the pandemic, such visits were less than 1% of visits and rose to 15% of visits. Telehealth usage has dropped to 4% in recent months, the report said.
The use of telehealth varies by medical condition. Telemedicine use for mental health has increased dramatically, and it continues to this day. While chronic conditions including high blood pressure, diabetes and HIV have also seen an increase in telemedicine, the frequent blood tests and testing required have led to a pullback in telemedicine use in these cases.
While Covid-19 has had a significant impact on pharmaceutical spending over the past two years, the impact will moderate in the coming years. After that, the $29 billion for Covid vaccines and treatments will fall to between $4 billion and $5 billion a year. Going forward, IQVIA expects immunology, oncology and neurology to continue driving growth in drug spending. These categories will be well represented in new branded drugs launched over the next five years, as well as a slew of rare disease treatments, the report said.
Specialty drugs, many of which are biologics for complex conditions, are attracting increasing drug spending. These drugs accounted for 56 percent of drug spending, up from 28 percent in 2011, the report said. This change is driven by the growth of specialty drugs targeting autoimmune diseases, oncology and diabetes.
According to IQVIA, more than 250 new drugs are expected to be launched over the next five years, contributing more than $100 billion in new spending. Competition among drugmakers and pressure from payers are expected to keep prices of branded drugs flat or fall as long as inflation is tame, the report said. The introduction of biosimilars will reduce spending on biologics by about $40 billion by 2026, a figure that is expected to surpass spending on small molecule generics for the first time. Immunology, oncology and neurology will drive most of the growth, the report said.
Of the 33 cell and gene therapies launched globally to date, only 18 are currently available in the U.S., the report said. IQVIA expects to launch 55 to 65 new cell and gene therapies by 2026, about 60% of which will be available in the US. Growth in this segment of drug research has been affected by safety risks and uncertainty about the pace of clinical trials, as well as regulatory scrutiny. Spending on these therapies has reached $3 billion and is expected to reach $11 billion by 2026. The payout is likely to be between $7 billion and $20 billion, with the lower end of the forecast reflecting more limited reimbursements due to risk-sharing agreements, net lower prices or outcome-based contracts.
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