Globally, prescription drug sales grew 6.1% between 2006 and 2007. In the U.S., Rx sales grew 3.8% in the same period. This is the weakest U.S. sales rate for prescription drugs since 1996.
 
These stats come to you from IMSHealth, whose annual U.S. Pharmaceutical Market Performance Review found over a 50% drop in Rx sales growth from the 8% rate reached in 2006.
 
The backstory to what’s slowing drug sales is a good-news/bad-news mix. The flood of many popular blockbuster drugs going off-patent means that generics spending is up. Now, 2 in every 3 prescribed drugs is a generic. $17 billion worth of prescription drugs went off-patent in 2007.
 
At the same time, there have been many fewer new product approvals at the FDA, compounded by safety problems for some big-name products including antidepressants, erythropoietins, and anti-diabetes drugs.
 
On the positive side, more specialty drugs are being adopted, especially for cancer; oncology drugs grew rapidly at 14%. However, these are being adopted rather slowly, as physicians haven’t adopted them at the rate manufacturers would like, and payers often don’t find justification in the high prices at which these drugs are tagged.
 
In the U.S., IMS forecasts compound annual pharmaceutical sales growth through 2012 of 3 to 6 percent. Dynamics that will shape the market during the next five years include the continued loss of exclusivity in major therapy areas, new specialist-driven products, greater levels of therapeutic substitution, along with greater awareness and focus on safety issues.
 
Health Populi’s Hot Points: The Wall Street Journal covered this story, titling it, “Patients Curb Prescription Spending.” One of the aspects that’s not been covered about this story is that patients — let’s call them ‘consumers’ — are purchasing drugs in different ways than they did back in 1996, the lowest-growth era for Rx drugs in the past 12 years. The chart on the right organizes IMSHealth’s data on Rx drug sales channels by category.
 
The fastest-growth channels include mail order, clinics, and Federal facilities.
 
Mail order has achieved such fast growth due to several important factors:
  • Medicare Part D, which encourages seniors to purchase drugs in bulk, and generics at that.
  • Lower prices for chronic medical maintenance drugs that can be garnered via mail order services through PBMs like Express Scripts and Medco.

And don’t forget about that convenience factor. Not only are generics driving mail order, but look for people on maintenance meds to seek out more mail order as a way to avoid driving to the pharmacy and adding gas costs to that pharmacy transaction — whether co-located in a retail store, a mass merchant, or grocery.

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