- The U.S. market for medicines grew by 5% in 2022, reaching a total value of $429Bn
- Health services utilization reached 100% of pre-pandemic levels for the first time at the end of 2022, up from a low of 66% in Q2 of 2020
- Telehealth visits fell to 5% of total visits in 2022, down from peak of 25% early in the pandemic
- Biosimilars now account for 25% of total volume of reference molecules prescribed in the U.S.
- The average patient out-of-pocket cost per retail prescription dropped to $9.38 in 2022, down from $10.15 in 2017
- Significant spending growth is expected over the next five years in oncology, obesity and neuroscience, while total net medicine spending is projected to remain unchanged
The U.S. market for medicines grew by 5% in 2022, reaching a total value of $429Bn on a net price basis. This was driven by a range of factors, including an increase in health services utilization, which is now back to pre-pandemic levels, and the entry of new medicines into the market. Balancing these drivers of growth, was a lack of net price increases for branded drugs and patient out-of-pocket costs per retail prescription remaining under $10. This is according to a new report from the IQVIATM Institute for Human Data Science, The Use of Medicines in the U.S. 2023: Usage and Spending Trends and Outlook to 2027.
“This is the tale of a balanced market in the U.S.,” said Murray Aitken, Executive Director of the IQVIA Institute for Human Data Science. “Life sciences innovation continues at a fast rate, bringing new drugs to patients and generating new demand, while average patient out-of-pocket costs remain low and the entry of biosimilars and generics as well as payer pressures cause growth in spending to remain at a lower level. Over the next five years we can expect significant growth from oncology, obesity and neuroscience medicines. However, total net spending is projected to remain flat through 2027, reflecting structural market dynamics, complex usage patterns and competition, as well as the effects of new policies and legislation.”
Additional key highlights in the report include:
- Health services utilization: Utilization of health services on average returned to pre-pandemic levels at the end of 2022 but leaves an 8% cumulative deficit in patient care since the onset of the pandemic. Relative to the pre-pandemic baseline period, 2022 ended with increased office visits by patients and more new prescription starts, but fewer elective procedures and screening and diagnostic tests.
- Telehealth visits: Virtual visits fell to 5% of total visits in 2022, down significantly from the peak of 26% seen early in the pandemic. This is still much higher than the pre-pandemic level of less than 1%, and suggests a fundamental shift in healthcare delivery.
- Medicines use: Use of medicines continues to grow but with patterns reflecting a new normal in a post-COVID-19 world. Use of medicines by days of therapy increased by 2.6% to 242.6 billion in 2022, down from 4.7% growth in 2021. Among the non-retail channels, medicine use in long-term care facilities remains below 2019 levels due to disproportionate impacts of the pandemic on these settings and has recovered the least of non-retail sites of care. In retail channels, where most drugs are dispensed, prescriptions (adjusted for length) reached 6.7 billion in 2022, which represents 3.6% growth and exceeds pre-pandemic levels.
- Biosimilars: Biosimilars launched to date now account for 25% of total volume of the relevant molecules, although there is wide variation in uptake across molecules reflecting differences in strategies adopted by originator and biosimilar manufacturers, payer and PBM decisions, as well as clinician and patient preferences. The impact from losses of exclusivity for biologics and the introduction of biosimilars has increased dramatically in the past three years, with brand sales of those products dropping by $33Bn over the past five years compared to $4Bn over the prior five years and reflecting a growing role for biosimilars.
Therapy areas: Most therapy areas continued to grow in adjusted prescription volumes in 2022, with a severe respiratory illness season contributing to strong growth in infectious disease and antibacterial prescriptions. Some notable areas of medicine use in 2022 include:
- Use of antibacterials grew 6.8% in 2022 to 2.4 billion days of therapy, with use in children increasing rapidly in the second half of 2022, but remained below pre-pandemic levels.
- Use of ADHD medicines grew 11% over the last five years with women aged 20–64 years now accounting for one-third of prescriptions, up from 27% in 2018
- Mental health prescriptions have increased by 8% since 2019 with girls under 19 years increasing their use by 33%.
- Newer diabetes therapies have seen significant growth with GLP-1 agonist use rising across both diabetes and obesity late in 2022.
- Medicine spending and growth drivers: The total U.S. market for medicines – at a manufacturer net sales level - grew by 5.3% in 2022 and reached $429Bn, driven primarily by volume and new products while brand net prices were unchanged. This includes $29 billion in sales of COVID-19 vaccines and therapeutics, up slightly from the 2021 level, and without which, market growth would 5.1%. Spending at list prices grew at 7.4% CAGR over the past five years, but payers’ spending (net of rebates and including patient out-of-pocket costs) grew at 4.5%, and patients’ costs grew at 1.4%.
- Patient out-of-pocket costs: Patients had to pay more than $80Bn in total out-of-pocket costs for the first time in 2022, even as the average patient cost per retail prescription remained under $10. The average amount paid out-of-pocket per retail prescription has dropped from $10.15 in 2017 to $9.38 in 2022. Manufacturer copay assistance brought down patient costs by nearly $19Bn in 2022 and nearly $80Bn over the last five years. Generics and branded generics account for 15% of invoice-level spending but represent 66% of patient out-of-pocket costs.
- Outlook to 2027: Total net medicine spending is projected to remain unchanged over the next five years, reflecting structural market dynamics and competition as well as the effects of new policies and legislation. U.S. market growth will return to pre-pandemic projections by 2024 but embeds new pressures on net growth in later years. Growth from oncology, obesity and neuroscience medicines will be significant but will be offset by declines in immunology and other areas, resulting in a CAGR between -2% and +1% for the total market through 2027. Effects of policy changes in the Inflation Reduction Act and American Rescue Plan Act will impact stakeholders differently and are subject to final regulations and implementation of these far-reaching pieces of legislation.
About the IQVIA Institute for Human Data Science
The IQVIA Institute for Human Data Science contributes to the advancement of human health globally through timely research, insightful analysis and scientific expertise applied to granular non-identified patient-level data.
Fulfilling an essential need within healthcare, the Institute delivers objective, relevant insights and research that accelerate understanding and innovation critical to sound decision making and improved human outcomes. With access to IQVIA’s institutional knowledge, advanced analytics, technology and unparalleled data, the Institute works in tandem with a broad set of healthcare stakeholders to drive a research agenda focused on Human Data Science, including government agencies, academic institutions, the life sciences industry, and payers. More information about the IQVIA Institute can be found at www.IQVIAInstitute.org.
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