Key Findings

Health Services Utilization Index during COVID-19

• During the first quarter of 2021, the use of key health services – as measured by the IQVIA Health Services Utilization Index - was at 82% of pre-COVID-19 levels, up from a low of 42% at the peak of the first wave of the pandemic in April 2020.
• Elective procedures were only 15% of normal at the peak of the lockdowns in spring 2020 and have returned to 80%, but delayed procedures range from hip and knee replacements to procedures which are scheduled (rather than as emergencies) but are generally not seen as optional. 

Medicine Use

• A total of 6.3 billion prescriptions were dispensed in 2020 with growth slowing to 1.7% after adjusting for the increased use of 90-day prescriptions for chronic therapies. 

Medicine Spending and growth drivers

• U.S. medicine spending increased 0.8% on a net price basis to $359 billion, which reflects an increasing gap between list or invoice prices and manufacturer net revenues. 
• Real net per capita spending – adjusting for net prices, population, and economic growth – declined in 2020 to $1,085 and has increased only $56 since 2010.  • Specialty medicines now account for 53% of spending, up from 27% in 2010 and driven by growth in autoimmune and oncology therapies.  

Patient Out-of-Pocket Costs and Affordability

• Out-of-pocket costs in aggregate for all patients – including retail prescriptions and non-retail medicines – increased $1 billion in 2020 to a record $77 billion. 
• Patients without insurance coverage paid $25 billion for prescriptions, 97% of which were for generic medicines. • Total out-of-pockets costs for these cash-pay patients has increased by 46% over the past five years; across all types of insurance, the average amount paid out-of-pocket per retail prescription has dropped from $10.33 in 2015 to $9.81 in 2020, primarily reflecting lower generic costs. 

Outlook to 2025

• Total net spending on medicine is expected to reach $380-400 billion in 2025, up from $359 billion in 2020, reflecting a compound annual growth rate of 0-3%.  
• New brand launches are expected to continue at record levels, and the 50-55 new active substances forecast to be launched per year will contribute about $133 billion in spending growth through 2025, slightly higher than the past five years. 
• Net prices for protected brands are expected to decline between 0 and 3% per year through 2025, reflecting more intense competition between manufacturers and aggressive negotiations by payers. 

Exhibit 2: Health Services Utilization Index and component metrics percentage of 2020 baseline

• Doctor visits- including office, institutional and telehealth – have rebounded strongly to an index of 91 relative to pre-pandemic baseline, the highest of the overall index components but still below prior levels and not yet making up the backlog in healthcare engagement that was created.
• Diagnostics and screening tests are often a part of a treatment sequence, starting with a visit and ultimately resulting in a procedure or drug therapy for many, and the gap in these tests from pre-pandemic levels allows risks for missing a cancer diagnosis or other such screening result.
• Elective procedures were largely stopped in the peak of the shutdowns from COVID-19, dropping to 15% of normal, but have since recovered to 80% nationally, though some states have begun to have above baseline levels.

Exhibit 13: Unique Treated Patients for Selected diseases 2020, Millions

• Millions of Americans have a diagnosis and treatment for disease during the year, led by hypertension, with 76 million patients having filled at least one prescription in 2020, up 1.7% from 2017.
• Influenza – season flu – had more diagnoses resulting in a treatment in 2020, but this was predominately due to higher rates of vaccination as the seasonal flu was dramatically lower in the 2020/2021 flu season than in prior years.
• Insomnia had a decline of 7.7% in patients over the past  four years, moving from 8.2 million to 6.4 million in 2020, with one-quarter of the decline happening in 2020 despite reports that many people are having trouble sleeping during the pandemic – suggesting the decline in 2020 would have been greater without the pandemic.
• There has been an average of 2.6% more oncology patients per year over the past 3 years, but that includes growth of 3.6% in 2018, 3.5% in 2019 and only 0.8% in 2020 as cancer screenings and treatment delays disrupted or slowed diagnoses, potentially putting thousands at risk for worse prognosis than if their cancers were detected earlier.

• Medicine spending per capita, adjusted for population growth, and shown in current (2020) dollars, has increased only $56 since 2010.
• Real net per capita spending declined by 2.7% in 2020 as a result of the economic impact of COVID-19, while net growth of 0.8% was only slightly above reported population growth.
• Over 10 years, real net per capita spending grew an average 0.5% per year but was trending at 0.9% through 2019.
• Specialty share of net spending across institutional and retail settings rose from 27% in 2010 to 53% in 2020, driven by innovation, and the declining share for traditional medicines as growth has slowed due to patent expiries. 

Exhibit 29: Wholesaler Acquisition Cost (WAC) Growth and Net Price Growth for Protected Brands

• The list prices of protected branded products — those products more than two years after launch having not yet lost patent protection — increased 4.4% in 2020.
• Net manufacturer prices — the cost of medicines after all discounts and rebates have been paid — declined 2.9% in 2020, continuing a downward trend for the past five years that was interrupted in 2019.
• Prices paid by different stakeholders in the U.S. health system are based to varying degrees on list prices and the discounts and rebates they negotiate or receive and do not apply uniformly to all parties.
• Most discounts are offered to wholesalers and pharmacies and do not necessarily result in lower out-of-pocket costs for patients.

Exhibit 39: Aggregate Patient Out-of-Pocket Cost for Medicines Dispensed in Retail and Non-retail Settings, US$Bn

• Out-of-pocket costs in aggregate for all patients – including retail prescriptions and non-retail medicines – increased $1 billion in 2020 to a record $77 billion. 
• Patients without insurance coverage paid $14 billion for prescriptions, 97% of which were for generic medicines. 
• Patients with Medicare Part D or high-deductible private health plans have seen individual prescription costs rise in line with the rising list prices of drugs but be offset by the Medicare “donut hole” subsidy program or the use of coupons, respectively.
• As out-of-pocket costs have risen, coupons for commercially insured patients have reached $14 billion in 2020, including the use of pre-paid debit cards issued to eligible patients by manufacturers.

Exhibit 49: U.S. Medicine Spending and Growth at Invoice-level and Estimated Net 2011–2025

• Total net spending on medicines is expected to reach $380-400 billion in 2025, up from $359 billion in 2020, and includes spending across all channels and product types. 
• Over the next five years, medicine spending will grow between 2–5% on an invoice basis and 0–3% after off-invoice discounts and rebates.
• Growth will be driven by adoption of newly launched innovative products, which are expected to occur at higher levels than in  past years with an average of 50-55 new medicines launching per year over the next five years, including those in oncology or with specialty or orphan status.