I’m guessing you are on drugs


Pusherman by Curtis Mayfield on Grooveshark


In the United States, we spend more on prescription drugs than we do on clothing. Don't get me wrong, I think prescription drugs can be an essential component of a care plan. I just want to put the scale in perspective. $320 billion buys a lot of 'scripts. Let's take a closer look.


Growth Rate of Drug Spending

The good news over the last few years is that the growth rate of prescription drug expenditures has slowed. Unfortunately, a study published in Health Affairs projects a return to higher expenditure growth starting next year.


Drugs Per Capita

Each of us has four unique prescriptions on average. Typically, older people have more prescriptions than do younger people. By the time a person reaches Medicare age, they will have just over 6 unique prescriptions.


The Sweet Spot

A population segment that we focus on at Axial is 45 to 64 year olds. These folks become Medicare beneficiaries at a rate of roughly 1 million per year. Many of them are starting to see the emergence of chronic disease, but have time to change the disease's trajectory. These people are also likely to have a smartphone and are great candidates for patient engagement programs that involve mobile devices. They also juggle close to 5 unique prescriptions.



Prescription volume and cost by therapy

Drugs for cancer, asthma/COPD, cholesterol, diabetes, and psychosis represent more than one-third of annual prescriptions. The top 20 therapies represent over two-thirds of prescriptions. Note that costs do not map directly to volume. For example, roughly 20 million Americans fill 260 million prescription for lipid regulators (cholesterol meds). The price tag for all those meds is about $20 billion -- or $1,000 per patient per year. Antidepressants work out to about $595 per patient per year. The annual price tag for oncologics (cancer drugs) is $23 billion, but far fewer patients take cancer meds. Some cancer medications cost well over $100,000 per patient per year. 



Where do you get your drugs?

According to the IMS Health study, the majority of prescriptions are filled at retail centers with about a third filled within healthcare institutions such as clinics and hospitals. Within retail channels, about half go to chain stores, a quarter to mail order, and the balance to independent stores and food stores.


Who pays for your drugs?

Of the 4 billion annual prescriptions about 60% are paid via third-party insurance. Medicare Part D and Medicaid pick up about a third. And just 6% are paid with cash. 


The Bottom Line

$320 billion in drug spending may seem overwhelming, but here's the kicker: the cost of noncompliance with medication plans is almost $300 billion.  Up to 50% of medications aren't taken as prescribed. If you're a provider, here's a compliance checklist for your patients:

  • get a pill box 
  • store the current medication list, usage instructions, and reminders in a smartphone app

Why should you care? Medication noncompliance is thought to cause 125,000 deaths per year and about 1 in 10 hospital admissions. Don't let your patients become one of these statistics.