Seniors Ration Spending on Drugs as Costs Rise in Weak Economy
U.S. senior citizens are filling fewer prescriptions for drugs as out-of-pocket costs rise in a weak economy, undercutting a record level of new product introductions by drug companies, industry researchers said.
Dispensed prescriptions to patients 65 and older declined 3.1 percent in 2011, compared with a 2.7 percent dip in 2010, according to a study released today by the IMS Institute for Healthcare Informatics in Parsippany, New Jersey. For all age groups, prescriptions fell 1.1 percent last year.
The economy and increased cost-sharing requirements are causing people to make fewer doctor visits and fill fewer orders for pills, IMS said. There probably won’t be improvement in 2012 as the economic recovery and population growth aren’t moving fast enough to boost spending on brand-name drugs, said Michael Kleinrock, the institute’s research development director.
“We’ve reached a tipping point where patients will take that increased cost and use less medicine,” Kleinrock said in a telephone interview. “What they’ve done appears to be rationing their care.”
Drugs used for chronic diseases, including high blood pressure, osteoporosis and cholesterol, saw the biggest drops among seniors. Patients who skip care because they don’t feel sick, or who take one pill every two days instead of daily as prescribed, can end up in more expensive care later, said Larry Kocot, deputy director of the Engelberg Center for Health Care Reform at the Brookings Institution in Washington,
“It’s an indicator of alarm,” Kocot said in a telephone interview.
People age 19 to 25 filled 2 percent more prescriptions in 2011, led by attention deficit hyperactivity disorder medicines, antidepressants and antibiotics. The study credits the 2010 U.S. health-care law, which lets people under age 26 stay on their parents’ health insurance.
While the number of prescriptions fell, total U.S. spending on drugs rose 0.5 percent per person to $320 billion in 2011, according to the report. That figure is up from $195 billion in 2002, said IMS, which tracks prescription numbers and spending, and sells the information to drug companies and other customers.
Drug industry stocks are up since the start of 2011. The 12-member Standard and Poor’s 500 Pharmaceuticals Index gained about 16 percent since then, compared with an 11 percent jump in the broader S&P 500.
Pharmaceutical companies introduced 34 new drugs last year, the most in a decade, according to the report. About 80 percent of the drugs used by patients were copycat versions of older medicines, like Pfizer Inc. (PFE)’s Lipitor, that have lost patent protection. Generic usage was up from 78 percent in 2010 and 67 percent in 2007.
Consumer spending slowed across all areas of health care last year. The Altarum Institute, a research organization, said in a February report that total health spending in 2011 rose 4.4 percent, “one of the slowest rates in 50 years.”
Five years of economic hardship have caused patients to change their behavior, rather than continuing to spend normally during a shorter period of economic difficulty, Kleinrock said.
“If we had a reasonably brief recession, we might have seen very little change in patients’ long-term usage,” Kleinrock said on a conference call discussing the study. Instead, “we’re seeing more people reset their expectations about how often and what circumstances they’ll visit the doctor and how they’ll use medicine.”
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