Has The Era Of Slow Growth For Prescription Drug Spending Ended?
In the period 2005–13 the US prescription drug market grew at an average annual pace of only 1.8 percent in real terms on an invoice price basis (that is, in constant dollars and before manufacturers’ rebates and discounts). But the growth rate increased dramatically in 2014, when the market expande...
| Main Authors: | , , , , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
Project Hope
2017
|
| Online Access: | http://hdl.handle.net/1721.1/108623 https://orcid.org/0000-0002-6388-0768 |
| _version_ | 1826201738891231232 |
|---|---|
| author | Aitken, M. Cutler, D. Kleinrock, M. Maini, L. Berndt, Ernst R |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Aitken, M. Cutler, D. Kleinrock, M. Maini, L. Berndt, Ernst R |
| author_sort | Aitken, M. |
| collection | MIT |
| description | In the period 2005–13 the US prescription drug market grew at an average annual pace of only 1.8 percent in real terms on an invoice price basis (that is, in constant dollars and before manufacturers’ rebates and discounts). But the growth rate increased dramatically in 2014, when the market expanded by 11.5 percent—which raised questions about future trends. We determined the impact of manufacturers’ rebates and discounts on prices and identified the underlying factors likely to influence prescription spending over the next decade. These include a strengthening of the innovation pipeline; consolidation among buyers such as wholesalers, pharmacy benefit managers, and health insurers; and reduced incidence of patent expirations, which means that fewer less costly generic drug substitutes will enter the market than in the recent past. While various forecasts indicate that pharmaceutical spending growth will moderate from its 2014 level, the business tension between buyers and sellers could play out in many different ways. This suggests that future spending trends remain highly uncertain. |
| first_indexed | 2024-09-23T11:55:58Z |
| format | Article |
| id | mit-1721.1/108623 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T11:55:58Z |
| publishDate | 2017 |
| publisher | Project Hope |
| record_format | dspace |
| spelling | mit-1721.1/1086232022-09-27T22:57:04Z Has The Era Of Slow Growth For Prescription Drug Spending Ended? Aitken, M. Cutler, D. Kleinrock, M. Maini, L. Berndt, Ernst R Sloan School of Management Berndt, Ernst R In the period 2005–13 the US prescription drug market grew at an average annual pace of only 1.8 percent in real terms on an invoice price basis (that is, in constant dollars and before manufacturers’ rebates and discounts). But the growth rate increased dramatically in 2014, when the market expanded by 11.5 percent—which raised questions about future trends. We determined the impact of manufacturers’ rebates and discounts on prices and identified the underlying factors likely to influence prescription spending over the next decade. These include a strengthening of the innovation pipeline; consolidation among buyers such as wholesalers, pharmacy benefit managers, and health insurers; and reduced incidence of patent expirations, which means that fewer less costly generic drug substitutes will enter the market than in the recent past. While various forecasts indicate that pharmaceutical spending growth will moderate from its 2014 level, the business tension between buyers and sellers could play out in many different ways. This suggests that future spending trends remain highly uncertain. United States. National Institutes of Health (NIANIH/R01AG043560) 2017-05-03T13:38:59Z 2017-05-03T13:38:59Z 2016-09 Article http://purl.org/eprint/type/JournalArticle 0278-2715 1544-5208 http://hdl.handle.net/1721.1/108623 Aitken, M.; Berndt, E. R.; Cutler, D.; Kleinrock, M. and Maini, L. “Has The Era Of Slow Growth For Prescription Drug Spending Ended?” Health Affairs 35, no. 9 (September 2016): 1595–1603. https://orcid.org/0000-0002-6388-0768 en_US http://dx.doi.org/10.1377/hlthaff.2015.1636 Health Affairs Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Project Hope PMC |
| spellingShingle | Aitken, M. Cutler, D. Kleinrock, M. Maini, L. Berndt, Ernst R Has The Era Of Slow Growth For Prescription Drug Spending Ended? |
| title | Has The Era Of Slow Growth For Prescription Drug Spending Ended? |
| title_full | Has The Era Of Slow Growth For Prescription Drug Spending Ended? |
| title_fullStr | Has The Era Of Slow Growth For Prescription Drug Spending Ended? |
| title_full_unstemmed | Has The Era Of Slow Growth For Prescription Drug Spending Ended? |
| title_short | Has The Era Of Slow Growth For Prescription Drug Spending Ended? |
| title_sort | has the era of slow growth for prescription drug spending ended |
| url | http://hdl.handle.net/1721.1/108623 https://orcid.org/0000-0002-6388-0768 |
| work_keys_str_mv | AT aitkenm hastheeraofslowgrowthforprescriptiondrugspendingended AT cutlerd hastheeraofslowgrowthforprescriptiondrugspendingended AT kleinrockm hastheeraofslowgrowthforprescriptiondrugspendingended AT mainil hastheeraofslowgrowthforprescriptiondrugspendingended AT berndternstr hastheeraofslowgrowthforprescriptiondrugspendingended |