Drug spending continues to soar

The United States spent a net $310 billion on drugs in 2015, up an overall 8.5 percent from 2014, while spending on specialty drugs rose at nearly double that rate, according to a new study from the IMS Institute for Healthcare Informatics. 

The trends underline the enormous challenge hospitals and the rest of the healthcare system have in trying to keep costs under control. Hospitals, for example, have had to closely manage their drug inventories, even resorting to special software intended to remind providers of the cost of the medications they prescribe. Such practices have raised general ethical issues regarding how patients receive care.

Specialty drugs, which can cure the majority of patients with once chronic and life-threatening conditions such as hepatitis C, have been driving spending up even further. Specialty drug spending on a net price basis--what was paid for the drugs, rather than what was invoiced--reached $121 billion in 2015. That's up more than 15 percent compared to 2014.

There are some bright spots in the report, however. Increases in spending on drugs that have already been brought to market rose by just 2.8 percent in 2015, down from a 5.1 percent increase in 2014.

Through the end of the decade, the IMS forecasts an overall moderation in drug pricing trends. It predicts growth rates in the mid-single digits, with huge outlays for new specialty drugs offset by offset by "a rising impact from brands facing generic or biosimilar competition."

To learn more:
- read the IMS Institute study (registration required)