IQVIA Report on Prescription Costs: 12 Things to Know

by Clive Riddle, August 6, 2020

Pre-pandemic, much of the healthcare oxygen in any room was consumed by discussions and debate over pharmaceutical costs. While now, the focus in that arena will be on vaccine costs, certainly Rx cost concerns have been shoved by most to the back burner. And now a new report may help provide some justification in that regard.

The IQVIA Institute for Human Data Science has just released a new 41-page report:  Medicine Spending and Affordability in the U.S.: Understanding Patient Costs for Medicines, that found “the vast majority of patients in the United States are experiencing lower out-of-pocket costs for their drugs, paying a smaller share of costs and seeing a downward trend in their costs on average.” As a reminder, IQVIA was formed through the merger of IMS Health and Quintiles.

Here’s a dozen things to know from the report:

1. Net price increases — after adjusting for rebates, discounts, other price concessions, and patient coupons to reduce out-of-pocket costs —moderated from 2.9% in 2016 to 1.7% in 2019; the third consecutive year of increases lower than growth seen in the Consumer Price Index.
2. While 98.9% of prescriptions dispensed carry a patient payment of less than $125, the remaining 1.1% represents some 69.0 million prescription in 2019, up from 60.7 million in 2015, but with the share of prescriptions unchanged.
3. Over the past five years, spending at list prices [Wholesaler Acquisition Cost (WAC)] has increased from $477 billion to $671 billion — an average of 7.1% per year.
4. Manufacturer net revenues from these sales, including all products, are estimated to have grown an average of 4.6% over five years and 5.2% from 2018 to 2019.
5. The average amount paid out of pocket per retail prescription has risen from $10.34 in 2015 to $10.67 in 2019, unchanged from 2018 and up  just $0.33 since 2014
6. Annually, 90% of all patients pay less than $500 in out-of-pocket costs, but 20% of Medicare Part D patients pay more
7. A record high share of prescriptions with final out-of-pocket costs below $20, exceeding 90% for the third consecutive year
8. More prescriptions are being dispensed with $0 patient payment — 44% of all branded prescriptions in 2019, up from 36% in 2015
9. Over 90% of branded and generic prescriptions have a final out-of-pocket cost below $20, and only 1.1% have a cost above $125.
10. For branded prescriptions only, about 4% of have out-of-pocket costs above $125, down 1% in 2015, but still numbering more than 23 million prescriptions last year
11. Patient out-of-pocket costs for drugs dispensed in a retail setting had been declining up to 2017, but have increased 8% and 3% in the past two years, respectively, resulting in a five-year average growth of 1.6% per year.
12. In 2019, 9% of all new prescription starts were abandoned at retail pharmacy. While abandonment rates are less than 5% when the prescription carries no out-of-pocket cost, it rises to 45% when the cost is over $125 and 60% when the cost is over $500.