Contrary to continued misleading claims about the increasing costs of prescription medicines, a new report was released this week offering more evidence that the competitive market for medicines is working to contain costs and slow spending growth. After price concessions from drug companies, net prices for brand name drugs grew just 3.5% last year, according to the report from the QuintilesIMS Institute.
The report also found that net spending growth on medicines slowed by half in 2016 compared to the prior year, rising just 4.8 percent – exactly in line with the growth rate for healthcare spending overall, according to the Centers for Medicare and Medicaid Services (CMS). That spending growth is projected to remain stable over the next five years – and has been revised downward from other recent projections:
The outlook for U.S. spending growth on medicines has been revised significantly downward as a result of weaker than expected new product spending and a slowing of invoice price increases for branded products…Average growth was projected in the 6-9% range prior to the autumn of 2016 but projections have been revised down to 4-7% through 2021.
The report also projected that net price growth for patent-protected branded drugs will be in the range of 2-5 percent through 2021; well in line with overall healthcare inflation.
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