As the debate in Washington continues on drug pricing, it’s important that policymakers take into account what is actually happening in the market for medicines. Here are four things about medicine spending that you should know from “Drug Expenditure Dynamics 1995 – 2020,” IQVIA’s latest report:
- Spending on medicines is a small and stable share of health care spending in the United States (14%). This share of health care spending has remained relatively flat over the last two decades despite increases in both medicine use and the number of innovative medicines brought to market by biopharmaceutical companies.
- Loss of exclusivity and the introduction of generics and biosimilars have offset spending on newer brand medicines in the United States, keeping spending on medicines as a percentage of total health care spending stable.
- Spending on medicines as a percentage of total health care in the United States is below the average across the 11 developed countries included in the report, which in addition to the United States includes Japan, Germany, France, Italy, Spain, the United Kingdom, Brazil, Canada, South Korea and Australia.
- While health care spending per capita is higher in the United States than in other countries included in the report, IQVIA attributes a large share of this spending difference to “higher payments to hospitals and physicians, and administrative costs for insurance and health care services.”
This report reiterates why cross-country comparisons are often misleading. To lower health care spending, policymakers should look at the true drivers of health care spending. Learn more about how we can build a more resilient, affordable and equitable health care system at PhRMA.org/BetterWay