By the end of the third year of the COVID-19 pandemic, health services utilization had returned to their pre-pandemic levels overall, but some shifts have occurred. That’s just one of the findings of the IQVIA Institute for Human Data Science’s The Use of Medicines in the U.S. 2023: Usage and Spending Trends and Outlook to 2027 recently released report. And while spending on medications will continue to grow, driven by new oncology drugs, traditional areas of growth such as immunology and diabetes will instead help to slow that growth.
Since the beginning of the COVID-19 pandemic, the institute has tracked patient visits, including both telehealth and in-person ones; screening and diagnostic tests; elective procedures; and new prescriptions for its IQVIA Health Services Utilization Index. Speaking at a May 18 webinar on the report’s findings, Michael Kleinrock, research director for the IQVIA Institute for Human Data Science, explained that overall, those services have returned to 100% of pre-pandemic levels as of the fourth quarter of 2022. However, some shifts among the four elements have occurred.
He explained that prior to the pandemic, telehealth visits were at less than 1%, and while during the peak of the pandemic, that rose to 26%, usage has dropped to 5% of total visits. But overall doctor visits were least impacted during the pandemic and remain above pre-pandemic levels.
Prescriptions had a “sharp jump in the fourth quarter…[that was] directly related to the respiratory infection season that we had this year, which was abnormally high.” That said, “we’re tracking at a lower level of new prescription volume across the industry…than we have typically seen” as utilization lags.
A notable trend that the report revealed was that in 2022, there were 2.4 billion days of antibacterial use, which is an increase of 6.8% from 2021 but a decline of 7.2% from pre-pandemic levels.
“Antibiotic use and antimicrobial resistance are big concerns,” maintained Kleinrock. The report found that almost 80% of people hospitalized with COVID received an antibiotic despite their ineffectiveness against the condition. “We’re actually seeing shortages of antibiotics generally partly because of the lower use that’s been happening since the pandemic and then the sharp increase when in this infectious season” the agents’ use rose in both children and adults.
Another trend that Kleinrock flagged is that attention-deficit/hyperactivity disorder (ADHD) medication use rose 11% over the last five years, reaching more than 38 billion days of therapy last year, and “the demographics are changing. Historically, ADHD had been simplified to something that was for younger people. And now we’re seeing…adult women aged 20 to 64 accounting for a third of the prescriptions, up six percentage points from five years ago.”
Use of mental health drugs among young people, particularly girls, is up “significantly.” Prescriptions for these medicines hit 567 million in 2022, which is an increase of 9% since 2019. Among girls under the age of 19, prescriptions were up 33% from pre-pandemic levels to 17 million last year.
“One of the observations we discussed as we were preparing the report is that mental health particularly suffers from a lot of stigma in terms of access to care,” he explained. “It’s possible that the increases are as people overcome stigma, as opposed to the demand being new.…It could be both, could be either,” he said, flagging this as a “really interesting and challenging area worthy of much more research.”
The report revealed a huge increase in prescriptions for glucagon-like peptide-1 (GLP-1) agonists for both diabetes and obesity over the end of 2022 and the beginning of this year. In February 2023, new prescriptions for diabetes drugs were up 128% over the previous year, while obesity prescriptions were up 352% in the same time frame. This new generation of obesity drugs in clinical trials is “so much more effective than previous generations, that there’s a significant interest that’s driving here, and this is something that…we’re going to be watching for a few years now,” stated Kleinrock.
The institute continues to see a decrease in the use of prescription opioids, with per capita use down 64% since 2011. However, it also found that deaths due to opioid overdoses were up 253% during the same time period, “so this is a continuing public health challenge.”
A “further set of concerning gaps” was seen in women’s health: Use of contraceptives was down 6% in 2022, with 100 million fewer therapy days. “There’s generally lower use of long-acting birth control, IUDs, injectables.” Kleinrock noted that the trend predated the pandemic and explained that all of the trends he had highlighted were not necessarily related to that event.
Gross-to-Net Bubble Continues to Grow
Researchers found that the difference between wholesale acquisition cost (WAC), or list price, spending and payer net spending hit $255 billion last year, up from $139 billion in 2017. Besides negotiated discounts and rebates contributing to this, 340B organizations also play a growing role. “Spending at list prices has increased faster than all-payer net spending but far slower than 340B institutions,” concludes the report. WAC spending, said Kleinrock, “over this period has actually not grown that much, relative to some other elements. The net gap…has increased a lot.”
The report notes that over the past five years, WAC spending grew at 7.4% compared with 4.5% growth in payers’ spending, 5.6% for manufacturer net spending and 1.4% for patient out-of-pocket costs. In 2022, 7% of people overall spent more than $500 on out-of-pocket prescription costs, while 1.9% paid more than $1,500. In Medicare, 15% of beneficiaries paid more than $500, and 4% paid more than $1,500 last year. In commercial plans, 6% of beneficiaries spent more than $500, and 1.1% paid more than $1,500.
“The reason that it’s higher in Medicare at this point is because of the laws preventing the use of coupons, we think, in Medicare compared to commercial, where patients can use a coupon or voucher or some form to lower their costs,” explained Kleinrock. “The other factors also relate to things like disease burden and cost burden because Medicare patients typically have more medicines per person than younger people. But when we’re talking about drug prices, or drug costs, these are the people who are being exposed to the significant costs, as I would describe them. I think there are differences of opinion about what’s significant. And that’s an important discussion as well.”
In 2022, patients abandoned 94 million prescriptions at pharmacies. Among prescriptions costing more than $500, 53% were not picked up by patients, compared with 7% for those costing less than $10.
That 53% “translates to about 11 million newly starting prescriptions. Obviously, if you start a prescription, and you continue, you would fill that a number of times. So this is sort of the beginning of the train-not-starting dynamic,” he said. In addition, “there’s a large number of them [abandoned prescriptions] that happen when the cost was zero or even when it was less than $10. So I just encourage everyone to think about what does affordability mean, and is affordability the only dynamic here? Some of these are about convenience or side effects or unwillingness to take the prescription.…There’s a number of dynamics that could be driving patient behavior here, but at the cost end, it’s significant.”
Researchers specifically looked at insulin out-of-pocket costs, which were $1.4 billion in 2022, “and 77% of those costs are linked to the 21% of prescriptions that cost patients more than $35.” However, those pressures are being reduced for some patients, as manufacturers have announced price reductions for certain agents, and the Inflation Reduction Act will impose a cap of $35 on Medicare beneficiary out-of-pocket costs.
The report found that if out-of-pocket costs for all patients taking insulin were capped at $35, this would result in savings of $561 million: $135 million for beneficiaries in commercial plans, $152 million for Medicare covered lives and $273 million for cash-paying patients. Patients in commercial plans spent $480 million last year on insulin prescriptions, Medicare beneficiaries spent $537 million, and cash-pay patients spent $337 million.
“Still, the open question for us is how many insulin patients were abandoning therapy and would therefore be having worse outcomes for their diabetes, maybe because of the cost,…and that will be something we’re going to be watching very closely as the year progresses.”
Oncology, Obesity Will Drive Spending Growth
The report notes COVID’s “significant” impact on U.S. market growth, but it projects that “the long-term impact on growth trends is expected to be more muted and the market will return to pre-pandemic trends by 2024.” Growth in spending on medications over the next five years will be “largely unchanged” and is expected to increase between 1% and 4% on a WAC basis and -2% to 1% on a net price basis. Growth from new innovative medications will be offset by exclusivity losses, biosimilar uptake, the impact of legislation and a shift in COVID spending.
“In the next five years, spending is going to be the same level — $429 billion — as it is today,” remarked Kleinrock. And while some uncertainty exists on the outlook, “this is a fairly dramatic change in the sort of historic always-upward trend in this medicine trend.”
Through 2027, the report forecasts that drugs for oncology, neurology and obesity will drive spending growth, while treatments for diabetes, immunology and COVID-19 will help slow it down. Spending on oncolytics on a net basis is expected to reach $125 billion in five years — with more than 100 new oncology drugs expected, many for rare cancers — as growth slows to 9% from biosimilar savings.
In diabetes, however, the “insulin repricing dynamic is a significant element of the modeling…that suggests that list prices will begin to come down quite significantly,” said Kleinrock. “The net doesn’t decline nearly as much. But there are net savings here,” with net revenues forecast to decline by 36% to 39% over the next five years.
The immunology class is another traditional cost driver that finds itself poised to contribute to slowing spending growth. Over the past decade, these agents have averaged 12% volume growth in days of therapy. But through 2027, spending is projected to decline by $9 billion, or 15%, with biosimilars of AbbVie Inc.’s Humira (adalimumab), Stelara (ustekinumab) from Johnson & Johnson’s Janssen Biotech, Inc. unit and Actemra (tocilizumab) from Genentech USA, Inc., a member of the Roche Group, launching onto the U.S. market. Costs for immunology drugs are projected to drop by 41% over the next five years.
“But there’s still billions of dollars here spent in immunology,” he noted.
Next-generation biotherapeutics such as cell and gene therapies and RNA-related treatments now are “tracking about $4 billion in spending in the US.,” said Kleinrock. “We think that rises…upward to somewhere around $12 billion in five years. But there are scenarios where it reaches $20 [billion]. And that’s really a question of whether the access and infrastructure support that wider use. Many of these are for small and rare populations, but if they were to be more widely used, that would be the driver of that upside scenario.”
Even though obesity has “a significant disease burden” across the country, the condition historically has been “less than a billion dollar market,” observed Kleinrock. In 2018, spending was about $500 million, but that has increased to almost $2.1 billion in 2022, as use of newer agents increases. With their “significant efficacy,…that growth has been fairly startling through 2022,” he asserted.
The report forecasts growth in spending conservatively at $7 billion by 2027, with a base case of $10 billion in net spending by 2027 and $22 billion with less-restricted access. “There have been reports, estimates from other analysts, that have this market being even bigger than the high side of our scenario here,” he noted. “That would be a scenario that would play out if many more market participants were supportive of paying for these medicines, beyond just patients who wanted the medicine and industry who gave them coupons.
“It would involve payers or employers or others significantly deciding to jump on and support the use of these medicines,” Kleinrock continued. “And, you know, the flip side from our research in areas of interest is that if there were wider use of these medicines, and they were effective, there would likely be offsetting health benefits,” such as improving cardiometabolic outcomes and lowering costs for other diseases.