Medicines Account for a Stable Share of Health Care Spending

New therapies are transforming care for patients fighting debilitating diseases like cancer, hepatitis C, high cholesterol and more. In the midst of all this progress, the share of spendings on retail medicines remains the same as it was 50 years ago. In fact, government actuaries project the share of health care spending attributable to retail and physician administered medicines will continue to grow in line with overall health care cost growth for at least the next decade. To put spending on medicines in perspective, the growth in other health care services will be five times total medicine spending growth through the next decade.

This is possible due to a competitive marketplace for medicines where costs fall dramatically as competition occurs among brand name medicines – and even further with the introduction of generics. Innovator companies invest in research to develop new medicines, and, over time, they become available as lower-cost generic versions that typically cost up to 80 percent less. And all the while, pharmacy benefit managers (PBMs) and insurers aggressively negotiate the prices of the medicines they cover.


Medicines Help Patients Avoid Expensive Hospital Services

Prescription medicines are often the most cost-effective means of preventing and treating disease.

According to an analysis, the U.S. health care system could save $213 billion annually if medicines were used properly. And every additional dollar spent on medicines for adherent patients with congestive heart failure, high blood pressure, diabetes and high cholesterol generated $3 to $10 in savings on emergency room visits and inpatient hospitalizations.

Medicines can also reduce the projected impact of diseases. In the fight against Alzheimer’s disease, a new medicine that delays the onset of Alzheimer’s disease by just five years could avoid $367 billion in health care costs.


Developing New Treatments and Cures is a Complex and Risky Undertaking

As our understanding of science grows, so does the complexity of developing new medicines -- particularly as treatments are increasingly tailored to the unique needs of individual patients. Setbacks are an inherent part of this complex process and the odds of success are low -- just 12 percent of drugs entering clinical trials ever make it to patients. And thousands won’t even make it past the early discovery and pre-clinical testing stages.

However, through these setbacks, comes success. For example, in the past 16 years, there were more than 120 unsuccessful attempts to develop medicines to treat Alzheimer’s disease, 96 for melanoma and 167 for lung cancer. During this same period, 4 medicines were approved to treat Alzheimer’s, 7 for melanoma and 10 for lung cancer. Despite these risks and challenges, researchers at America’s biopharmaceutical companies persevere in their pursuit of discovering new innovative medicines to improve the lives of patients.


Medicines are Transforming the Treatment of Devastating Diseases

Innovative medicines developed by America’s biopharmaceutical research companies are instrumental in helping patients live longer and healthier lives.

Today, thanks in part to innovative medicines, the U.S. death rate for HIV/AIDS has fallen nearly 88 percent since the 1990s, and is now considered by many to be a manageable chronic disease. Through the use of innovative therapies, death rates from cancer in the U.S. have fallen 23 percent since their peak in 1991. And now 2 out of 3 patients diagnosed with cancer are living at least 5 years after their diagnosis.

Therapeutic advances have also transformed treatment of hepatitis C. New therapies can cure more than 90 percent of patients treated.

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