The US prescription drug market grew just 3.8% last year, which is down from more than 8% in 2006 and the lowest rate of rise since 1961, IMS Health has reported.

Total US prescription drug sales reached $286.5 billion in 2007, with dispensed volume rising only 2.8% compared to growth of 4.6% in 2006. According to IMS, the year’s low rate of rise was due to:

- patent expiries: branded drugs worth $17 billion lost exclusivity in 2007, helping to drive prescription volume growth of 10% for unbranded generics, while the share of total dispensed prescriptions taken by generics grew to 67.3%. In February, pharmacy benefit manager Express Scripts reported that the average cost of a US prescription grew only $1.09 to $54.34 last year, up from $53.25 in 2006, and that without this “generic effect,” costs per prescription would have increased $3.58 to $56.83.

- uptake of new medicines represented just $441 million of sales in 2007, reflecting fewer new launches and slower adoption by physicians;

- levelling of year-on-year growth from the Medicare prescription drug benefit (Part D): prescriptions dispensed through the benefit accounted for 19% of retail prescriptions at end-2007, up slightly on 2006; and

- safety issues, which contributed to significantly lower-than-expected sales for products accounting for some 10% of the market.

“Last year, we saw a continuing shift away from primary care classes to biotech and specialist-driven therapies, which grew at a 9% and 10% pace, respectively,” added Murray Aitken, senior vice president at IMS’s Healthcare Insight. Oncology drugs continued their rapid growth last year, with sales up 14% due to innovative new products, expanded indications and accelerated uptake to fill unmet needs. At $18.4 billion, lipid regulators continued to be the largest US prescription therapy class - despite a 15.4% sales drop, and proton pump inhibitors were second, up 2.8% to $14.1 billion, while antipsychotics replaced antidepressants as the third-largest therapeutic class, rising 12.1% to $13.1 billion.

The IMS figures reinforce previous findings which demonstrate that prescription drugs make up a small share of health care costs in the US, and are “also at odds with a common misconception – that drug costs are skyrocketing and are responsible for an increase in health care costs,” said Pharmaceutical Research and Manufacturers of America (PhRMA) senior vice president Ken Johnson.

He was referring to claims this month by seniors’ group the AARP (formerly the American Association of Retired Persons) that drugmakers have substantially raised prices of 220 brand-name prescription drugs most commonly used by people enrolled in the Medicare drug benefit. The average treatment cost “exploded” from $80 per year per prescription in 2002 to $151 in 2007, and prices of these drugs rose an average 7.4% in 2007, nearly two and a half times the rate of general inflation, says the AARP’s Public Policy Institute Watchdog report.

These findings raise questions about why pharmaceutical companies “so dramatically increased the costs of popular brand-name drugs at the same time Medicare began offering drug coverage,” said John Rother, the AARP’s director of public policy.

However, Mr Johnson says that these numbers “simply do not reflect the true amounts that seniors pay for their medicines,” or the clear downward trend in prescription drug price growth. The Centers for Medicare and Medicaid Services has estimated that US prescription drug spending growth declined 1.8 percentage points in 2007, and that 2006’s growth was the second-lowest in 11 years, he notes, and points out that while US medical prices rose 4.4% overall during 2006-7, prescription drug prices went up just 1.4%. “The prescription drugs measure includes a blend of branded medicines and generic drugs that represents the market basket of medicines that consumers actually buy – rather than the few selectively highlighted by AARP – and also reflects how our system works, with its strong incentives for generic use when a brand medicine goes off patent,” he adds.

Outlook for 2008
Meantime, IMS is forecasting that, while an additional $13 billion-worth of branded drugs will be exposed to generic competition this year, the introduction of some novel biologics and vaccines, plus the launch of five to eight potential new global blockbusters, will help offset the impact of lower generics pricing.

It forecasts 3%-6% compound annual sales growth to 2012 for the US market which, it says, has entered a new era of more modest growth. “We will see additional lower-cost treatment options for many patients, while new and innovative therapies are delivered to specific patient groups, such as those suffering with cancer. Safety issues will be closely monitored and are likely to bring added caution to the market over the next several years,” forecasts Mr Aitken.