PLYMOUTH MEETING, Pa., Aug. 13 /PRNewswire/ -- IMS Health (NYSE: RX) today
reported that the annual rate of change for prescription pharmaceuticals in
the U.S. was 3.4 percent for the second quarter of 1998 compared to the same
period for 1997. This rate is 0.3 percentage points higher than the annual
measurement reported for the prior six months, which held at 3.1 percent.
IMS HEALTH is the world's leading provider of information solutions to the
pharmaceutical and healthcare industries.
The overall rate of inflation in prescription drug pricing for the second
quarter of 1998 is in line with the measurement reported previously for
May 1998 versus May 1997. The figure remains below the double-digit rates
reported elsewhere for the same time periods.
Modest Upward Trend Since Mid-1997
The overall rate of change in prescription drug prices rose gradually
throughout 1997 before pausing in the first quarter of 1998. The upward trend
continued in the second quarter of 1998.
Prices for brand pharmaceuticals rose by 4.3 percent in the second quarter
of 1998 versus the same quarter in 1997. The increase was offset by a
decrease of 5.1 percent in generic drug prices (See Table), the same rate as
recorded in the fourth quarter of 1997.
Sales Growth Continues at Record Pace
Overall prescription sales volume for the six channels of distribution
audited by IMS HEALTH grew by 17.6 percent for the second quarter of 1998
versus the same period a year ago. The net growth for pharmaceutical sales,
removing the impact of price changes, was 14.2 percent.
This second quarter industry growth rate of 17.6 percent is the highest
measured, surpassing the 17.3 percent recorded in third quarter 1997 and even
the yearly double-digit growth rates of the late 1980s. By comparison, the
peak annual growth rate recorded during the 1980s was 15.5 percent for 1987
over 1986.
"There is some indication that drug prices are starting to climb upward,"
commented Myron Holubiak, general manager of The Plymouth Group, the
consulting arm of IMS HEALTH. "In spite of the rise in drug prices, the
substantial rate of growth in the pharmaceutical industry continues to be
driven by non-price factors." Price accounted for only 3.4 percentage points
of the 17.6 percent growth. Of the 14.2 percent real growth, new products and
line extensions accounted for 7.3 percent and volume and mix categories
accounted for 6.9 percent.
The inflation rate measured by IMS HEALTH, at 3.4 percent, is far below
the Producer Price Index, Industry Weighted, which increased to 20.5 percent
for June 1998 versus June 1997, as measured by the Bureau of Labor Statistics
- more -
through a basket of goods approach. The Consumer Price Index for all items
was 1.7 percent for the same time period.
Retail Sector Biggest Driver of Overall Trend
Prescription drug prices for the retail sector rose by a weighted average
rate of 3.9 percent for the second quarter of 1998 versus the same period a
year ago. This figure is up slightly from the annual rate of 3.8 percent
reported for the first quarter of 1998. Consistent with the overall market
trend, prices of brand-name drugs in the retail sector moved up 5.0 percent,
while generic prices decreased 6.6 percent.
"The retail sector is a significant barometer of overall market trends,"
stated Holubiak. "It accounts for more than two-thirds of the industry's
sales dollars, making the retail sector the largest driving force behind the
overall annual price change rate of 3.4 percent."
Rate for Brands through Non-Retail Sector Increases
For the non-retail distribution channels, pharmaceutical prices were
2.0 percent higher in the second quarter of 1998 compared to the same period a
year ago. "This increase reflects a wide range of rates among the non-retail
distribution channels," noted Susan Capps, senior manager, Pricing Studies at
IMS HEALTH. Non-injectable brand-name drugs had a weighted-average annual
price increase of 4.9 percent, up over the annual rate of 3.8 percent reported
in the first quarter of 1998. Non-injectable generic drugs had a price
decrease of 2.5 percent.
"Interestingly, prices for prescription drugs purchased by non-federal
hospitals increased 2.4 percent, the highest in several years," commented
Capps. "Prices for injectable and non-injectable drugs purchased by
non-federal hospitals rose 2.0 percent and 3.4 percent, respectively. This
was driven primarily by brand-name drugs." For the non-retail injectable
market, the overall rate of price change remained low at 0.5 percent.
Inflation for Top 10 Drugs Remains Below Industry Totals
Prices for the top 10 selling prescription drugs increased 2.2 percent
overall and 2.8 percent for the retail sector, when comparing the second
quarter of 1998 to the second quarter of 1997. These measurements exclude any
new products that were not on the market during the base 1997 period. The
rates, while up slightly from the first quarter 1998 figures, remain below the
overall market inflation for all brands -- 4.3 percent overall and 5.0 percent
for retail pharmacy market.
"We are continuing to see pharmaceutical manufacturers raise prices
selectively," commented Holubiak. "The top selling products have an
aggregated inflation rate well below the overall rates, indicating that other
products had higher price increases, which brought the averages to levels
above 4 percent."
Rate for Quarter Remains Below Double-Digit Reports
"When taking a comprehensive view of the market, we are not seeing the
overall double-digit price increases reported elsewhere," Holubiak said. "The
rate of change appears to remain within overall economic indicators. As I
remarked previously, the acceptance of newer, advanced drugs continues to
proceed at a rapid rate, thus influencing a market-basket approach to
calculating purchaser outlay for prescription pharmaceuticals. This
challenges the market basket approach to measuring the true economic impact of
drugs, since the newer therapies may be providing significant incremental
benefit that is not captured in these types of analyses."
Figures Reflect Acquisition Prices of 20,000 Products
IMS HEALTH's acquisition-price database encompasses more than
20,000 pharmaceutical products and is updated continuously. The database
reflects invoice-based discounts for pharmaceutical purchases through
six audited channels of distribution. It does not include subsequent,
off-invoice rebates that, if considered, could further reduce drug purchase
prices. IMS HEALTH calculates all price changes on a weighted average level,
based on unit volume. As a result, the rate of price change is driven by
those products with the highest unit volume. All rates calculated by
IMS HEALTH use actual transaction prices, not list prices such as
Average Wholesale Price (AWP).
IMS HEALTH
IMS HEALTH is the world's leading provider of information solutions to the
pharmaceutical and healthcare industries. With more than $1 billion in 1997
revenue, IMS HEALTH operates in over 90 countries. IMS HEALTH is the largest
pharmaceutical manufacturer information partner, with over 40 years'
experience in the industry. Key products and services integral to customer
day-to-day operations include: market research for prescription and
over-the-counter pharmaceutical products; sales management information to
optimize sales force productivity; technology enabled selling solutions for
sales and marketing decision-making; technologies systems and information
services that support managed care organizations. Additional information and
previous press releases are available at IMS HEALTH's web site:
http://www.imshealth.com.
Table
Second Quarter 1998 vs. Second Quarter 1997
Price Changes for Prescription Drugs in U.S. Market
Percent Change Q2 '97 to Q2 '98
Market TOTAL BRANDS GENERICS
Total Market 3.4 4.3 -5.1
Retail Pharmacies 3.9 5.0 -6.6
Hospitals 2.4 2.8 -1.2
Injectables 2.0 2.3 -0.8
Non-Injectables 3.4 4.3 -1.9
Clinics -0.8 -0.8 -0.4
Injectables -2.9 -3.1 0.9
Non-Injectables 5.2 6.1 -2.6
Staff-Model HMOs 6.0 6.6 -0.9
Injectables 3.8 3.9 1.7
Non-Injectables 6.5 7.3 -1.1
Long-Term Care Facilities 5.0 5.6 -2.0
Injectables 4.9 5.2 0.3
Non-Injectables 5.0 5.7 -2.2
Federal Facilities -0.4 0.3 -5.5
Injectables -1.8 -1.5 -5.3
Non-Injectables 0.0 0.8 -5.5
Source: IMS HEALTH, a healthcare information company
SOURCE IMS Health
 back to top
Related links:
http://www.imshealth.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 115785
CONTACT:
Gary Friend, 610-834-5654, or Nancy Duckwitz,
610-834-5338, both of IMS Health
|
