Spending on drugs falls for first time in 55 years

The expiration of the patent on Lipitor helped drive U.S. drug spending down for the first time in 55 years. (Getty Images / May 9, 2013)

5:46 a.m. CDT, May 9, 2013

The amount of money Americans spend on prescription drugs fell for the first time in 55 years, according to a report from the IMS Institute of Healthcare Informatic.

The expiration of patents on widley used drugs such drugs such as Lipitor and Plaviix helped send overall U.S. spending on medicines down 1 percent to $325.8 billion in 2012, the group said. Adjusting for population, per capita spending fell 3.5 percent to $898.

The drop, the first since IMS began tracking drug prices in 1957, marks the beginning of what is expected to be several years in which U.S. spending on prescription drugs will grow more slowly than overall healthcare costs, said Michael Kleinrock, director of research development at IMS.

The shift is being made at the same time the Affordable Care Act, designed to improve access to healthcare insurance, gets set to take effect next year.

The biggest factor behind the drop was the availability of lower-cost generic versions of drugs such as Pfizer Inc.'s cholesterol-lowering Lipitor. New generics contributed $28.9 billion to last year's reduction in medicine spending.

The pharmaceutical industry has been grappling with an unprecedented "patent cliff" that ratings agency Fitch has estimated will mean the loss of more than $70 billion in revenue from brand-name medicines between the second half of 2011 and the end of 2015.

Last year's patent expiries also included Sanofi SA and Bristol-Myers Squibb Co. heart drug Plavix, and AstraZeneca Plc's antipsychotic, Seroquel.

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Spending on drugs falls for first time in 55 years