Obamacare Failure May Shave 30% From U.S. Drug Sales

According to Bloomberg,

Potential shortfalls in enrollment for President Barack Obama’s health-care overhaul would put a 30 percent dent in projections for U.S. prescription-drug sales in 2017, a report from IMS Health Inc. shows.

That worst-case scenario would translate to $320 billion in drug spending, according to the report. The best case is supposed to be $460 billion, boosted by demand from the health law’s expansion of insurance coverage and medical screenings, and removal of restrictions on pre-existing conditions.

Expenditures in the $2.7 trillion U.S. health-care system have doubled since 1980, growing to 18 percent of gross domestic product and leading to financial success for drugmakers, hospitals and insurers. The 2010 health law’s promise of making medical coverage an affordable possibility for at least 25 million uninsured people was projected to provide another boost.

“There’s a lot at stake,” Michael Kleinrock, director of research at the IMS Institute for Healthcare Informatics, said in a telephone interview. “This would be a very dramatic decline. We don’t think that that kind of sky-is-falling scenario is most likely, but it is not off the table.”

Last month, 106,185 people enrolled in private health plans through insurance exchanges that debuted Oct. 1 as part of the Patient Protection and Affordable Care Act of 2010. U.S. health officials had a goal of enrolling 800,000 people through November and an estimated 7 million sign-ups were predicted for the first year.

Global Spending

A middle ground that involves a slower coverage expansion would generate as much as $380 billion in U.S. drug spending in 2017, according to the report from Kleinrock’s group, which is the research arm of IMS Health, a drug sales analysis company based in Danbury, Connecticut. Drug spending in 2012 was about $328 billion, the group said.

Still, global spending on drugs is projected to surpass $1 trillion in 2014 for the first time, and reach $1.2 trillion in 2017. The growth of as much as $235 billion from 2012 to 2017 would roughly match the $234 billion increase in the prior five years, according to the report.

Oncology drugs will see the most spending in developed countries, with sales of as much as $84 billion in 2017, followed by $39 billion on diabetes drugs, IMS said. Pain medicines will lead the way in emerging markets, with as much as $25 billion in spending.

Spending on generic drugs may make up 21 percent of sales in developed countries in 2017 from 16 percent in 2012, the report found.

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