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Innovation in Drugs Pushes the Growth by 13 Percent

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Published on : Apr 14, 2015

As per a new report provided by IMS Health’s Institute for Healthcare Informatics, in 2014, healthcare system of the United States spent about US$373.9 billion for drugs which is almost 13.1% more than it was in the last year and it is also the maximum growth rate for spending from 2001. Talking about these numbers, it uplifts a prevailing theme which is - innovation has paid off for Big Pharmaceuticals, in spite when the politicians and insurers are focusing on the rising drug prices.

As the mentioned IMS report points out around 42 novel drugs which were introduced in the previous year, which went up from 36 in 2013. It is the maximum number of new medicines being launched in a single year from 2001. Investing on new brands went up by US$20 billion, which is three times of the last annual increase. Every new entry brought plenty of griping about high price tags, but that didn’t seem to hamper sales to ant extend.

The executive director of the IMS Institute for Healthcare Informatics, Murray Aitken stated that patients are looking for these treatments at rates which were much higher than the payers had thought of, which is a clear reflection of an unmet requirement out in the market. These are the drugs which have relatively less side effects and bear extremely high rates of efficacy.

For an instance, Sovaldi (sofosbuvir) is the blockbuster for hepatitis C treatment provided by Gilead Sciences GILD +0.53%. When this drug was introduced in the U.S. market at a lurching price of US$84,000 for each course, there was a huge outcry one might have thought the drug company wouldn’t be able to get the drug reimbursed by anyone.