Transcript US Life Expectancy 1950*20111 - Connecticut State Medical Society

Connecticut Pharmaceutical Forum:
Access, Affordability, and Better Health
Tara C. F. Ryan
May 17, 2016
9 Out of Every 10 US Prescriptions
Are Filled With Generics
Generic Share* of Prescriptions Filled 1984-2014
100%
90%
88%
80%
70%
72%
60%
50%
52%
40%
43%
30%
33%
20%
10%
19%
0%
1984
1990
1996
2002
2008
*Generic share includes generics and branded generics. “Other” category from IMS National Prescription Audit™ not included in calculation.
2014
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Prescription Medicine Spending Growth: 2008-2024*
After spiking at 12.2% in 2014, government actuaries project prescription drug spending growth
to moderate over the next few years to 5-7% through 2024, back in line with overall health care
spending growth.
2014 saw a record 41 medicines approved by
the FDA – including a number of
transformative medicines for many
debilitating diseases – as well as 15.7 million
Americans gaining coverage through the ACA.
Percent Annual Growth Rate
14%
12.2%
12%
10%
8%
7.6%
6.2%
6%
4.7%
0%
6.5%
6.6%
6.7%
6.7%
6.8%
4.5%
4%
2%
5.7%
6.1%
2.5%
2.4%
2.2%
0.1%
0.2%
Total Health Expenditure Growth Rate
Prescription Drug Growth Rate
*Total retail sales including brand medicines and generics
Source: Centers for Medicare & Medicaid Services (CMS)1
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Average Net Brand Price Growth Is Lower than List
Price Growth as a Result of Increased Rebates
Commonly reported “list” or “invoice” prices overstate what payers ultimately pay for medicines
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6
•
Updated-SJP
Growth in Retail Prescription Medicine Prices Has Been
in Line With Other Health Care Prices
Consumer Price Index (2005 = 100)
Medicaid price
capped at CPI
Hospital and Related Services
All Medical Costs
Prescription Medicines
Consumer Price IndexUrban, All Items
PhRMA analysis based on US Bureau of Labor Statistics. Consumer price index—all urban consumers, history table.
http://bls.gov/cpi/#tables Accessed March 2015.
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How the Medicaid Drug Rebate Works
FOR BRAND DRUGS IN CONNECTICUT
To ensure coverage of prescription medicines for Medicaid enrollees, under Federal law the Medicaid Drug
Rebate Program requires pharmaceutical manufacturers to provide rebates in exchange for Medicaid
coverage of their drugs.
Basic Rebate
The Greater of:
Best Price
(Difference between AMP
& Best Price)
OR
Minimum Rebate
(23.1% of AMP)
Consumer Price Index
Rebate
Paid if the price increases
by more than CPI:
Paid cumulatively to
protect states from price
increases higher than
inflation
2014 Rebates
(Brand Only)
“Supplemental” Rebate
Negotiated by
manufacturers for
enhanced access for
patients through preferred
drug lists
$388 Million
$25.7 Million
AMP – Average Manufacturer Price
Best Price – Lowest price drug sold to any non-government purchaser excluding certain sales (VA, Part D and 340B)
Adherence to Medicines Lowers Total Health Spending
for Chronically Ill Patients
“Pharmaceuticals have the effect of improving or maintaining an individual’s health...adhering
to a drug regimen for a chronic condition such as diabetes or high blood pressure may prevent complications…
taking the medication may also avert hospital admissions and thus reduce the use of medical services.”
-Congressional Budget Office
Drug Spending
Difference in Annual Spending of Adherent
Patients vs. Non-adherent Patients
$2,000
$1,058
$656
$429
Medical Spending
$601
$0
-$1,860
-$2,000
-$4,000
-$6,000
The U.S. health care system
could save $213 billion
annually if medicines were
used properly*
-$4,413
-$4,337
-$8,881
-$8,000
-$10,000
Congestive Heart Failure
Diabetes
Hypertension
Roebuck MC, Liberman JN, Gemmill-Toyama M, et al. Medication adherence leads to lower health care use and costs
despite increased drug spending. Health Affairs. 2011;30(1):91-99.
Dyslipidemia
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New Data Shows That Medicines Are Not the Primary
Driver of Premium Increases
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