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Weight-Loss Drugs Drive U.S. Prescription Spending

Prescription drug spending grew by 13.5% in 2023, but drug cost inflation was lower than the CPI.

The United States spent $772.5 billion on prescription drugs in 2023, a 13.5% increase from 2022, driven largely by the proliferation and popularity of blockbuster weight-loss drugs, a new report today shows.

Despite the dramatic increase in overall drug expenditures in 2023, drug cost increases were marginal (2.9%) and for the fourth straight year lagged inflation in the overall economy (3.4%) as measured by the Consumer Price Index, according to the American Society of Health-System Pharmacists’ National Trends in Prescription Drug Expenditures and Projections for 2024.

Spending for semaglutide doubled in 2023, making it the top-selling drug in the nation, replacing the autoimmune disease drug adalimumab, which also saw sales growth despite the availability of cheaper biosimilars. Spending on the diabetes drug tizepatide grew 373% even though Food and Drug Administration approval for weight loss came in November, 2023, the report says.

Retail pharmacies accounted for $307.8 billion (42.6%) of total expenditures, mail-order pharmacies accounted for $206.6 billion (28.6%), clinics $135.7 billion (18.8%), and nonfederal hospitals $37.1 billion (5.1%).

Study lead author Eric Tichy, PharmD, MBA, division chair, supply chain management at Mayo Clinic, projects that spending on weight-loss drugs will continue to climb in 2024 and beyond as supplies catch up with the huge global demand. That growth will continue as new and similar drugs come to market and as the FDA approves the medications for more conditions.

In sharp contrast, hospitals’ drug spending fell by 1.1%, continuing a steady period of falling expenditures that was interrupted during the COVID pandemic. This ongoing decline was credited to the transition from expensive COVID medications such as Remdesivir to cheaper oral treatments, the increased use of biosimilars, and the growth of the 340B program allowing hospitals to buy drugs at a discount.

“Hospitals and health systems are doing a commendable job using available tools to manage drug expenditures, which typically represent about 10% of their budgets,” Tichy says. “Pharmacy and health-system leaders should persist in their proactive management and continue to anticipate disruptions that may affect drug spending.”

The Inflation Reduction Act had a modest effect on drug spending in 2023, but the full effect of its savings won’t be felt until 2026 for retail and mail order pharmacy and 2028 for hospitals and clinics. Tichy says Medicare drug price negotiations mandated by the IRA will reduce prices on some drugs but could also drive up spending on some drugs as more people use them.

The report also found that:

  • Drug expenditures in clinics grew 15%, driven by high-cost injectable medications for cancer, immunology, and neurology.

  • Biosimilar use in hospitals and clinics remains strong and helps contain total expenditures. However, biosimilar uptake in retail and mail-order pharmacies was more limited.

  • The top 25 drugs by expenditures in the U.S. in 2023 were Semaglutide ($38.6 billion), adalimumab ($35.3 billion) and apixiban ($22.1 billion).

  • Strong growth was booked for tirzepatide (373.1%), risankizumab (106.3%), semaglutide (100.1%), dupilumab (44.9%), dapagliflozin (41.8%), and empagliflozin (34.0%).

  • Sitagliptin (–9.4%), insulin glargine (–4.6%), insulin aspart (–3.5%) and insulin lispro (–1.8%) were the drugs in the top 25 with lower expenditures in 2023 than in 2022.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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