It’s fashionable to blame healthcare spending growth on pharmaceuticals, but it’s also inaccurate. In 2013, prescription drug spending grew by 2.5%, which was 110 basis points behind the 3.6% growth in overall expenditures.
Our analysis also shows that spending on hospital care and physician services, which account for a majority of healthcare expenditures, grew more quickly than drug spending. See the chart below.
CMS projects that these trends will reverse in 2014, because of healthcare reform’s rollout and Sovaldi’s legendary launch. Until then, don’t blame drugs.
THE DATA
The CMS boffins publish annual calculations of U.S. National Health Expenditures (NHE), including prescription drugs sold through outpatient retail, mail, and specialty pharmacies. You can wallow in the full data set at CMS’s National Health Expenditure Historical Data page.
Expenditure (spending) data differ from those of pharmacy revenues, manufacturer sales, and provider purchases. NHE totals are net of manufacturer rebates, so the reported figures are lower than pharmacies’ prescription revenues and IMS Health "non-discounted" figures. The NHE data also do not measure total U.S. spending on prescription drugs, because these data exclude an indeterminate amount of inpatient spending on pharmaceuticals. Thus, U.S. drug spending in the NHE is roughly equivalent to total outpatient pharmacy revenues minus manufacturer rebates.
In CMS Forecast: Big Drug Spending Growth, But Hospitals and Doctors Will Still Capture Most Healthcare Spending, I reviewed the 2023 forecast, which was based on historical data through 2012.
THE STORY
In 2013, spending on outpatient prescription drugs accounted for only 9.3% of overall U.S. healthcare expenditures. However, expenditures on hospital care and physician services accounted for 52.2% of U.S. healthcare expenditures—more than five times as great as those on drug spending.
What’s more, drug spending grew more slowly than the other categories. See the chart below.
[Click to Enlarge]
In my next post, I’ll examine payer trends behind the 2013 prescription spending numbers.
Adam,
ReplyDeleteIronically, ever since I have read studies depicting pharma's 'contribution' to the financial portion of the healthcare picture, I have always felt pharma does not know how to make its case to the American public. Instead, the industry allows itself to be put on the defensive. Make the case, emotionally, logically, and often. Sure there are issues concerning who 'pharma' is, the crafting of the messages, and many other unsettled matters stemming from the fact that there is no one amorphous body that speaks for pharma. Nonetheless, they need to find a path.
Mitchell Goldberg
MG Associates
It is certainly good news that independent pharmacies are
ReplyDeletehealthy, along with the entire industry. But I am confused about the vague
reference alerting readers to "new special legislative protections" on
their behalf. I certainly hope this is not in reference to independent
pharmacies seeking to end barriers and closed doors to greater participation in
the Part D program, which if anything has "special protections" for
large pharma networks. Someone should please clarify they do not oppose open
competition and consumer choice in this program, which would save U.S. seniors
many millions of dollars for the medications they depend on.
HELLO to my friends out there i am testifying about the good work of a man who help me it has been hell from the day my husband left me i am a woman with two kids my problem stated when the father of my kids travel i never help he was living but as at two weeks i did not set my eye on my husband i try calling but he was not taken my call some week he call me telling me that he has found love some where easy at first i never take to be serous but day after he came to the house to pick his things that was the time i notice that things is going bad i help he will come back but things was going bad day by day i needed to talk to someone about it so i went to his friend but there was no help so i give it up on him month later i met on the the internet a spell caster i never believe on this but i needed my men back so i gave the spell caster my problem at first i never trusted him so i was just doing it for doing sake but after three day my husband called me telling me that he his coming home i still do not believe but as at the six day the father to my kids came to the house asking me to for give him the spell work to said to my self from that day i was happy with my family thanks to the esango priest of (abamieghe)esango priest he his a great man you need to try him you can as well to tell him your problem so that he can be of help to you his content email is this esangopriest@gmail.com indeed you are a priest thank you for making my home a happy home again. remember his email is esangopriest@gmail.com
ReplyDeleteJust fyi, we gross 4mil and gross profit% is right at 18% (our pop base is 99% medicare part d). Terrible as far as reimbursement. We are barely afloat. Have been supplementing income with dme sales. Ncpa digest shows about 30% reported to be medicare part d. As America's population ages and medicare part d base grows, other stores may head in our direction as far as numbers. (we didn't report to ncpa). Not opinion, just facts. As for my opinion, to potential scratch startups, it may be wise to stay away from a focus on medicare part d.
ReplyDelete