Future Drug Expenditures Research Articles

Impact of BMI and BMI change on future drug expenditures in adults: results from the MONICA/KORA cohort study

BackgroundThe evidence on the long-term economic effects of obesity is still scarce. This study aims to analyse the impact of body mass index (BMI) and BMI-change on future pharmaceutical utilisation and expenditures.MethodsBased on data from 2,946 participants in a German population-based health survey (MONICA/KORA, 1994/95) and the follow-up study (2004/05), drug intake and expenditures were estimated using a bottom-up approach. Using univariate and multivariate methods, we analysed the impact of baseline BMI and BMI-change on drug utilisation and expenditures after 10 years.ResultsThe use of pharmaceuticals was more likely in moderately and severely obese compared to the normal weight group (OR 1.8 and 4.0, respectively). In those who reported pharmaceutical intake, expenditures were about 40% higher for the obese groups. A 1-point BMI-gain in 10 years was, on average, associated with almost 6% higher expenditures compared to a constant BMI.ConclusionThe results suggest that obesity as well as BMI-gain are strong predictors of future drug utilisation and associated expenditures in adults, and thus highlight the necessity of timely and effective intervention and prevention programmes. This study complements the existing literature and provides important information on the relevance of obesity as a health problem.

Projecting future drug expenditures in U.S. nonfederal hospitals and clinics—2013

Factors likely to influence drug expenditures, drug expenditure trends in 2012, and projected drug expenditures for U.S. nonfederal hospitals and clinics in 2013 are discussed. Prescription drug expenditure data for 2011 through September 2012 were obtained from the IMS Health National Sales Perspectives database. Expenditure projections were based on a combination of quantitative and qualitative analyses, combined with expert opinion. Total prescription sales in the United States for the 12-month period ending September 2012 were $326.0 billion, a 0.8% increase from the previous 12 months. This rate of growth was the lowest in recent history and can be attributed to modest increases in expenditures for new products (3.3%) and the prices of existing products (5.9%), coupled with a marked decline in overall volume and mix (-8.4%). For the 9 months ending in September 2012, total prescription expenditures grew 2.7% when compared with the same period in 2011. Oncology products remained important expenditures for hospitals and clinics. Antineoplastic agents were the top medication class for expenditures in nonfederal hospitals, and oncology products accounted for 32.2% of drug expenditures in the clinic setting in the first 9 months of 2012. For 2013, we project a 1-3% increase in total drug expenditures across all settings, a 2-4% increase in expenditures for clinic-administered drugs, and a 0.5% decline to 1.5% increase in hospital drug expenditures. Health-system pharmacy leaders should carefully examine their own local drug-utilization patterns to determine their own organization's drug expenditure forecast.

Projecting future drug expenditures—2012

Factors likely to influence drug expenditures, drug expenditure trends in 2010 and 2011, and projected drug expenditures for 2012 are discussed. Data were analyzed to provide drug expenditure trends for total drug expenditures and the hospital and clinic sectors. Data were obtained from the IMS Health National Sales Perspectives database. From 2009 to 2010, total U.S. drug expenditures increased by 2.7%, with total spending rising from $299.2 billion to $307.5 billion. Drug expenditures in clinics grew by 6.0% from 2009 to 2010. Hospital drug expenditures increased at the moderate rate of 1.5% from 2009 to 2010; through the first nine months of 2011, hospital drug expenditures increased by only 0.3% compared with the same period in 2010. The dominant trend over the past several years is substantial moderation in expenditure growth for widely used drugs, primarily due to the ongoing introduction and wide use of generic versions of high-cost, frequently used medications. At the end of 2010, generic drugs accounted for 78% of all retail prescriptions dispensed. Another pattern is substantial increases in expenditures for specialized medications, particularly in the outpatient setting as growth in prescription drug expenditures for clinic-administered drugs consistently outpaces growth in total expenditures. Various factors are likely to influence drug expenditures in 2012, including drugs in development, the diffusion of new drugs, generic drugs, drug shortages, and biosimilars. For 2012, we project a 3-5% increase in total drug expenditures across all settings, a 5-7% increase in expenditures for clinic-administered drugs, and a 0-2% increase in hospital drug expenditures.

Projecting future drug expenditures—2011

PURPOSE. Drug expenditure trends in 2009 and 2010, projected drug expenditures for 2011, and factors likely to influence drug expenditures are discussed. SUMMARY. Various factors are likely to influence drug expenditures in 2011, including drugs in development, the diffusion of new drugs, generic drugs, health care reform, and biosimilars. Two distinct patterns of drug expenditures continue to exist. The dominant trend over the past several years is substantial moderation in expenditure growth for widely used drugs, primarily due to the ongoing introduction of generic medications for high-cost, frequently used medications and the influence of the economic downturn. The second pattern is substantial increases in expenditures for specialized medications, particularly in the outpatient setting. The influence of health care reform, the economy, and the emergence of biosimilars will be important trends to follow over the next several years, but they are unlikely to have substantial impact on drug expenditures in 2011. From 2008 to 2009, total U.S. drug expenditures increased by 5.2%, with total spending rising from $284.8 billion to $299.5 billion. Growth in drug expenditures in clinics grew by 5.1% from 2008 to 2009. Hospital drug expenditures increased at the moderate rate of 2.8% from 2008 to 2009; through the first nine months of 2010, hospital drug expenditures increased by only 0.8% compared with the same period in 2009. CONCLUSION. For 2011, we project a 3-5% increase in drug expenditures in outpatient settings, a 4-6% increase in expenditures for clinic-administered drugs, and a 1-3% increase in hospital drug expenditures.

Projecting future drug expenditures—2010

Drug expenditure trends in 2008 and 2009, projected drug expenditures for 2010, and factors likely to influence drug expenditures are discussed. Various factors are likely to influence drug expenditures in 2010, including drugs in development, the diffusion of new drugs, generic drugs, health care reform, drug safety concerns, and comparative effectiveness research. The increasing availability of important generic drugs continues to moderate growth in drug expenditures. Health care reform initiatives, including the potential for biosimilars legislation, will influence drug expenditures in all settings. From 2007 to 2008, total U.S. drug expenditures increased by 1.8%, with total spending rising from $279.6 billion to $284.7 billion. Growth in drug expenditures in clinics declined to the lowest level in a decade, a 1.0% increase from 2007 to 2008. Hospital drug expenditures increased at a moderate rate of only 2.1% from 2007 to 2008; through the first nine months of 2009, hospital drug expenditures increased by 3.0% compared with the same period in 2008. In 2010, we project a 3-5% increase in drug expenditures in outpatient settings, a 6-8% increase in expenditures for clinic-administered drugs, and a 2-4% increase in hospital drug expenditures.

Projecting future drug expenditures—2009

Drug expenditure trends in 2007 and 2008, projected drug expenditures for 2009, and factors likely to influence drug expenditures are discussed. Various factors are likely to influence drug expenditures in 2009, including drugs in development, the diffusion of new drugs, drug safety concerns, generic drugs, Medicare Part D, and changes in the drug supply chain. The increasing availability of important generic drugs and drug safety concerns continue to moderate growth in drug expenditures. The drug supply chain remains dynamic and may influence drug expenditures, particularly in specialized therapeutic areas. Initial data suggest that the Medicare Part D benefit has influenced drug expenditures, but the ultimate impact of the benefit on drug expenditures remains unclear. From 2006 to 2007, total U.S. drug expenditures increased by 4.0%, with total spending rising from $276 billion to $287 billion. Drug expenditures in clinics continue to grow more rapidly than in other settings, with a 9.9% increase from 2006 to 2007. Hospital drug expenditures increased at a moderate rate of only 1.6% from 2006 to 2007; through the first nine months of 2008, hospital drug expenditures increased by only 2.8% compared with the same period in 2007. In 2009, we project a 0-2% increase in drug expenditures in outpatient settings, a 1-3% increase in expenditures for clinic-administered drugs, and a 1-3% increase in hospital drug expenditures.

Projecting future drug expenditures—2008

Drug expenditure trends in 2006 and 2007, projected drug expenditures by setting for 2008, and factors likely to influence drug expenditures are discussed. Various factors are likely to influence drug expenditures in 2008, including drugs in development, the diffusion of new drugs, drug safety concerns, generic drugs, Medicare Part D, and changes in the drug supply chain. The increasing availability of important generic drugs and drug safety concerns continue to moderate growth in drug expenditures. The drug supply chain remains dynamic and may influence drug expenditures, particularly in specialized therapeutic areas. Initial data suggest the Medicare Part D benefit has influenced drug expenditures, but the ultimate impact of the benefit on drug expenditures remains unclear. From 2005 to 2006, total drug expenditures increased by 8.7% to $275 billion. Drug expenditures in clinics continue to grow more rapidly than in other settings, with a 20.9% increase from 2005 to 2006, and drug expenditures in clinics are now greater than the amount spent in hospitals. Hospital drug expenditures increased at a moderate rate of only 3.8% from 2005 to 2006; through the first nine months of 2007, hospital drug expenditures increased by only 2.2% compared with the same period in 2006. In 2008, we project a 5-7% increase in drug expenditures in outpatient settings, a 12-14% increase in clinics, and a 4-6% increase in hospitals.

Projecting future drug expenditures—2007

Drug expenditure trends in 2005 and 2006, projected drug expenditures for 2007, and factors likely to influence drug costs are discussed. Various factors are likely to affect drug costs, including drug prices, drugs in development, and generic drugs. In 2005, there was a continued moderation of the increase in drug expenditures. Total prescription drug expenditures increased by 5.5% from 2004 to 2005, with total spending rising from $239 billion to $252 billion. Through the first nine months of 2006, hospital drug expenditures increased by only 3% compared with 2005. This moderation of the growth of prescription drug expenditures can be attributed to three major factors: availability of major prescription drugs in generic form, continued increase in cost sharing for employees in employer-sponsored health plans, and decreased use due to safety concerns. It is expected that expenditures in 2007 will be influenced by similar factors, with few costly new products reaching the market, increased concern over product safety reducing the use of older agents and slowing the diffusion of newer agents that do reach the market, and several important patent expirations, leading to slower growth in expenditures. In 2007, we project a 5-7% increase in drug expenditures in outpatient settings, a 14-16% increase in clinics, and a 4-6% increase in hospitals.

Projecting future drug expenditures—2006

Drug expenditure trends in 2004 and 2005, projected drug expenditures for 2006, and factors likely to influence drug costs are discussed. Various factors are likely to affect drug costs, including drug prices, drugs in development, and generic drugs. In 2004 there was a continued moderation of the increase in drug expenditures. Drug expenditures increased by 8.7% from 2003 to 2004. Through the first nine months of 2005, expenditures increased by only 8.1% compared with 2004. This moderation can be attributed to several factors, including the continued trend toward higher prescription drug cost sharing for insured consumers, growing availability of generic drugs, and lack of "blockbuster" new drugs in recent years. Drug expenditures in 2006 will likely be influenced by similar factors, with few costly new products reaching the market, increased concern over product safety slowing the diffusion of those new agents that do reach the market, and several important patent expirations, leading to slower growth in expenditures. Forecasting and managing rising drug expenditures remains a challenge. Pharmacy managers must remain vigilant in monitoring drug costs in their health system and take a proactive role in pursuing efficient drug utilization. The dynamic health policy environment further complicates drug budgeting and must be considered, especially in integrated health systems responsible for managing inpatient, outpatient, and clinic drug costs. The comparison of health-system-specific data and trends with the national information presented in this article may provide a useful context when presenting institutional drug costs to senior management.

Projecting future drug expenditures—2005

Drug expenditure trends in 2003 and 2004 and projected drug expenditures for 2005 are discussed. Various factors are likely to affect drug costs, including drug prices, drugs in development, and generic drugs. In 2003 there was a continued moderation of the increase in drug expenditures. Drug expenditures increased by 11.4% from 2002 to 2003. Through the first nine months of 2004, expenditures increased by only 8.7% compared with 2003. This moderation can be attributed to many factors, particularly patent expirations, prescription-to-nonprescription conversions and a continued slowdown in new drug approvals. Higher cost sharing for consumers and continued weaknesses in several sectors of the U.S. economy affecting employment levels and insurance coverage also contributed to this smaller increase in drug utilization. It is expected that 2005 drug expenditure growth will out-pace the growth in overall health care expenditures and growth in the economy. In 2005, there should be a 10-12% increase in drug expenditures in outpatient settings, a 12-15% increase in clinics, and a 6-9% increase in hospitals.

Projecting future drug expenditures--2004.

Drug expenditure trends since 2002 and projected drug expenditures for 2004 are discussed. In 2002 there was a moderation in the trend of increasing drug expenditures. Drug expenditures increased by 12.3% between 2001 and 2002. This trend continued in the first half of 2003, with expenditures increasing by only 10% compared with 2002. This moderation in the drug expenditures trend can be attributed to many factors, especially patent expirations and decreases in new drug approvals. Higher cost sharing for consumers and a general economic slowdown in the United States affecting employment and insurance coverage have resulted in a smaller increase in drug utilization. In 2004, there should be a 10-12% increase in drug expenditures for outpatient settings, a 19-21% increase for clinics, and a 6-8% increase for hospitals. Drug expenditure growth should continue to outpace the growth in overall health care expenditures and the growth in the U.S. economy.

Projecting future drug expenditures--2003.

Drug expenditure projections for 2003 and factors likely to influence drug costs are discussed. The United States continues to face the challenge of increased growth in health expenditures, and drug expenditures are continuing to increase faster than the growth in total health care expenditures. These increases can be largely attributed to an increase in the average age of the U.S. population and technological advancement. On the basis of price inflation and non-price inflationary factors, including increases in volume, shifts in patient and therapeutic intensity, and expected approval of new drugs, a 10-12% increase in drug expenditures in 2003 for the inpatient setting and a 13.5-15.5% increase for ambulatory care settings are forecasted. While few new drugs are expected to greatly influence expenditures in 2003, the continued diffusion of recently approved drugs such as drotrecogin alfa and nesiritide will have a dramatic impact on total drug expenditures and must be carefully considered in the budgeting process. An agent likely to have a significant impact on HIV treatment is enfuvirtide, the first in a new class of antiretrovirals (fusion inhibitors), but its high cost ($10,000-$15,000 per year) may limit patients' access to this medication. An expanded user's guide is provided to assist the reader in appropriate application of this information in the drug budgeting process. Technological, demographic, and market-based changes and changes in public policy will continue to influence pharmaceutical expenditures in the coming year. An understanding of the overall drivers of medication expenditures and vigilance in monitoring pharmaceutical innovation are critical in the effective management of these resources.

Projecting future drug expenditures—2002

(January 15, 2002, Special Feature). On page 139, Table 7 should not include imipenem—cilastatin (Primaxin), whose current patent expiration date is 2009.

Projecting future drug expenditures—2002

Projecting future drug expenditures—2002

Projecting future drug expenditures--2002.

Drug-cost projections for 2002 and factors likely to influence drug costs are discussed. The United States continues to face the challenge of increased growth in health expenditures, and pharmaceutical expenditures continue to increase significantly faster than the growth in total health care expenditures. These increases can be largely attributed to a combination of general inflation, an increase in the average age of the U.S. population, and the increased use of new technologies. On the basis of price inflation and nonprice inflationary factors, including increases in volume, shifts in patient and therapeutic intensity, and the expected approval of new drugs, we forecast a 15.5% increase in drug expenditures in 2002 for hospitals and clinics and an 18.5% increase for ambulatory care settings. One of the most substantial contributors to the rise in pharmaceutical expenditures over the past decade is the successful introduction and rapid diffusion of new pharmaceuticals. Data about many new drugs on the horizon are provided. One agent likely to have the highest impact on hospitals in the next year is drotrecogin alfa for the treatment of sepsis. The cost of this agent is expected to range from $3,000 to $10,000 per patient per course of therapy. Other factors influencing medication costs, including generic medications, legislative initiatives, and the recent acts of terrorism committed against the United States, are also discussed. Technological, demographic, and market-based changes, and possibly public policy changes, will have a dramatic influence on pharmaceutical expenditures in the coming year. An understanding of what is driving the changes is critical to the effective management of these resources.

Projecting future drug expenditures--2001.

Drug cost projections for 2001 and factors that are likely to influence drug costs are discussed. The year 2000 introduced many new factors into the decision-making process for drug pricing and raised new considerations regarding drug therapy, distribution, and costs. It is anticipated that drug costs will continue to increase at a rate of 11-15% in 2001. Research and development expenditures for new drugs continue to grow and are estimated to be $26.4 billion in 2000, but the number of new drug approvals, especially for new entities, has not increased significantly. The generic drug industry has been expanding, and sales of generics are expected to increase to $20 billion by 2005. Drug costs also keep rising, and sales may reach $243 billion by 2008; this amounts to 12.6% of total health care spending, compared with 8.1% in 1999. There is a trend toward increasing the rate of conversion of prescription drugs to nonprescription status; this may reduce drug budgets somewhat. 2001 will see new systems of drug distribution and pricing, a federal prospective pricing system for ambulatory care patients covered by Medicare, drug imports from foreign manufacturers, and states taking legal action to reduce prescription drug costs. Drug costs in 2001 are expected to continue to increase at double-digit rates. The increase in costs is due to increased utilization, to new products replacing older products, and to price increases for drugs currently on the market.

Projecting future drug expenditures--1998.

Drug cost projections for 1998, factors that directly influence drug costs, and tools for projecting drug expenditures are discussed. The producer price index indicates that prices for drugs and pharmaceuticals increased 2.1% between January and June 1997; the increase for prescription preparations was 2.7%. Medi-Span data show an average increase for all drug products of 1.02% during the first six months of 1997; First Data-Bank reports a 1.7% increase for the same period. IMS America data, which take account of weighting for individual drugs or drug classes, show the prices of all drugs increasing 2.3% between the second quarters of 1996 and 1997. Drug industry analysts project the overall price increase in the next 12 months at 2-4%. Group purchasing organizations predict an average increase over the next 12 months of 0.56% for contracted drugs and 3.6% for noncontracted drugs. Various health care provider indexes suggest that increases in drug costs could be smaller over the next few years. The current trend of takeovers and mergers of pharmaceutical companies and health systems is likely to continue into 1998. As a result of generic competition and the loss of patent protection for many pharmaceutical products, the number of drugs to be introduced onto the market and the number of drugs in development are expected to escalate until the year 2000. These and other major changes in the health care environment, including changes in drug distribution and controversies over the use of formularies, will make future forecasting difficult. Compared with previous years, smaller increases in drug costs have been projected for 1998 and beyond, but changes in the health care environment mean that greater knowledge will be required to forecast future drug expenditures.

Projecting future drug expenditures--1997.

Use of the producer price index; data from independent sources, drug industry analyst, group purchasing organizations (GPOs), and health maintenance organizations (HMOs); pharmacoeconomics; and legal developments to project drug expenditures and prepare pharmacy budgets for 1997 is discussed. The producer price index indicates that prices for drugs and pharmaceuticals increased 2.2% during January to May 1996; the increase for prescription preparations was 3.4%. Medi-Span reports an average increase for all drug products of 1.2% for the first six months of 1996. IMS America data show the price of all drugs increasing 1.8% between the second quarters of 1995 and 1996. Drug industry analysts project the overall price increase in the next 12 months at 2.5-5.0%. GPOs predict an average increase over the next 12 months of 2.2% for contracted drugs and 4.3% for non-contracted drugs. HMO pharmacy directors predict pharmacy expenditures will increase by 4.5% per member in 1997. Caution must be applied in using pharmacoeconomics to project drug costs and their impact on health care expenditures. Today's budget must account for the greater integration of drug expenditures into the institution's objectives, possible reductions in other service costs, capitation, competition, shifting of control of the drug budget to specific patient care centers, relocation of services to the ambulatory care setting, and outsourcing. Legal actions in 1996 that may affect price increases and drug budgets included a class-action lawsuit by community and chain pharmacies alleging price discrimination by manufactures and wholesalers. Prices of pharmaceutical products are fairly stable and may remain so in 1997, but projections of future drug expenditures must account for the continuing reshaping of the health care landscape.

Projecting future drug expenditures--1996.

The use of information on inflation, pharmacoeconomics, generic competition, new drug entities, site-specific drug-use patterns, legislation, and the changing health care environment in the projection of drug expenditures is discussed. Drug price inflation has declined from 6.9% in 1991 to 2.1% for part of 1995. Much of the decline is attributable to deep discounts given by manufacturers to managed care institutions. Some marketing specialists are predicting that drug manufacturers will begin to scale back discounts. Pharmaceutical industry analysts project that overall price increase for pharmaceuticals in the next 12-24 months will average 2.8% (range, 0-6%). Pharmacists need to be able to understand and critically evaluate pharmacoeconomic research, particularly studies conducted by the pharmaceutical industry. Savings due to increases in generic product selection may be offset to some degree by extensions of patent expiration dates under the General Agreement on Tariffs and Trade (GATT). Drug budget projections should include a complete review of new drugs and biotechnology agents pending FDA approval, drugs pending approval for new indications, and common unlabeled uses of expensive existing agents. Various methods are available for tracking drug-use patterns in specific practice settings. When resources are limited, pharmacy managers may elect to target only high-cost drugs; a proactive approach, such as projecting costs and developing guidelines for costly agents before their market release and before consideration by the pharmacy and therapeutics committee, is advantageous. Relevant legislative activities in 1995 included reform proposals for Medicare, Medicaid, and FDA; the Federal Acquisition Streamlining Act; and GATT. Disease management and other approaches to pharmacy benefits have increased opportunities for cooperative arrangements between drug companies and health care providers that may have major effects on drug marketing and pricing. Combining information on inflation, pharmacoeconomics, generics, new drugs, practice-site drug-use patterns, federal legislation, and the changing health care environment is necessary for accurate projections of drug expenditures.

Forecasting future drug expenditures accurately

Forecasting future drug expenditures accurately