IMS on Health Spending

The IMS Institute for Healthcare Informatics has published a report on use of drugs and health care in 2013.   (IMS Report)   The report is densely packed with information not only on prescription medication use but on other areas of health care.  In regard to drugs, Nominal spending was $329 billion in 2013, and increase of 3.2% over 2012, which in turn had actually seen a decline of 1% from 2011.  Real per capita drug depending rose 1% in 2013 compared to a decline of 3.5% in 2012.  Contributing factors to the spending increase were fewer patent expirations, branded drug price increases and specialty drug use in certain therapy classes, such as cancer and hepatitis C.  Overall trends in drug spending can be driven by the rate of patent expirations and the amount of utilization of the drugs on which the patents are expiring, new branded compounds and the size of the markets which those new drugs address, price increases and manufacturer rebates, coupons and other discounts which reduce the impact of price increases.  2013 saw a large number of new drugs, often priced at a very high level.  Most of these addressed smaller disease categories, but diabetes spending, for example, grew rapidly due to new drug introductions for treatment.  Branded drugs account for 71% of total spending, the remainder is generics.  Specialty drugs also are 29% of spending, with the remainder being traditional oral medications, but specialty continues to grow much faster than traditional.  Retail and mail channels account for 56% of spending, specialty retail and mail are 15% and other settings such as hospital, clinics, long-term care and home health care actually account for 29% of all drug spending.  The top disease categories were oncology, $28 billion, diabetes, $24 billion, mental health, $24 billion, respiratory, $20 billion and pain, $19 billion.

In regard to other health care use, the authors found that patient office visits grew by 2.7%, after four years in which they declined, but they remain 8% lower than in 2008.  Some of this may be IMS’ peculiar categorization of hospital outpatient under hospital admissions.  Physician use grew more on a per capita basis among the commercially insured than among Medicare and Medicaid beneficiaries.  Specialist visits increased more than primary care ones.  Hospital outpatient visits rose by 3.2%.   While scheduled inpatient admissions only account for 2.4% of all hospital use, they grew by 10%.   Overall, the report suggests, as has other recent research, that utilization of health care services is beginning to rise, whether caused by more coverage, better economic circumstances, or other factors; and that prices are still going up at a healthy, or unhealthy, depending on your perspective, clip.