Average monthly prescription drug consumption among elderly Americans increased by 80% between 1990 and 2010 but will grow by only 2% through 2030.
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Fort Lauderdale, FL (PRWEB) September 30, 2013
A new white paper from life-sciences advisory firm, VOI Consulting (VOI), shows that a confluence of technical, medical and social factors led to dramatic growth in per capita prescription drug consumption in the United States over the past 20 years. However, VOI’s long-range forecasts suggest that consumption levels have reached a saturation point with the result that the U.S. pharmaceutical market will not experience a similar wave of sustained, industry-wide growth in the foreseeable future. These findings support other recent research indicating that U.S. health spending will be less burdensome than previously expected but they are troubling from the perspective of the pharmaceutical industry. Although the impact of declining utilization growth is already being felt, the slowdown has generally been attributed to generic competition, cost containment, or a stricter regulatory environment. VOI’s analysis shows that declining utilization growth is, in fact, the most important structural challenge facing the industry.
The white paper finds, for example, that average consumption of prescription drugs among Americans over 65 went from 2.3 per month in 1990 to 4.1 per month in 2010, an increase of nearly 80% on a per-person basis. By comparison, VOI’s projections reveal that, through 2030, average monthly consumption in this population will increase by less than 2% over current levels. Expressed differently, growth in average consumption among elderly Americans was more than 40 times higher during the 1990 to 2010 period than will be the case over the 2011 to 2030 time frame. Patients will continue to switch between different therapies but the average number of prescription drugs consumed per person has essentially stabilized.
This phenomenon, which VOI has dubbed “the utilization plateau,” means that changes in consumption will contribute very little to industry growth over the next two decades. As the white paper demonstrates, rising per capita utilization was responsible for a 39% increase in prescription drug volume in the 1990s and a further 16% during the first ten years of the 2000s. Due to the utilization plateau, however, per capita consumption will add only 3.1% to industry volume in the current decade and a meager 1.8% in the 2021 to 2030 period.
The other major contributors to prescription volume growth are a larger population and demographic changes, of which the most notable is the aging baby boomer generation. There is a widespread belief that the latter factor will provide a substantial boost to the pharmaceutical industry over the next 20 years but, according to VOI’s analysis, the aging population will lead to a 7% increase in volume during the current decade and 5% thereafter, far too low to offset the slowdown in utilization growth.
Todd Clark, VOI Consulting’s President and author of the report, sums up the situation, “In contrast to the environment most industry managers are accustomed to, there will be no rising tide to lift all boats. To survive and prosper, companies will need to maximize and maintain their share of a relatively stable market via smarter strategic decisions and more effective execution.”
Aggressive pipeline management with an emphasis on speed-to-market and better adherence programs are seen as the most promising avenues to maintain vigorous sales growth.
These and other findings are explored in detail in the white paper, “The Utilization Plateau: Understanding Why the U.S. Pharmaceutical Market has Stagnated and What You Can Do to Avoid the Slow-Growth Trap,” which is available for free download at http://voiconsulting.com/pages/u-s-drug-utilization-plateau.
ABOUT VOI CONSULTING
Since 1998, Value of Insight Consulting, Inc. (VOI Consulting) has worked with pharmaceutical, biopharmaceutical and industry-affiliated firms to provide clients with fact-based analysis and business intelligence to meet challenges in a highly competitive global environment. Through innovative research techniques and advanced analytical tools, VOI’s services help clients maximize commercial opportunities. In addition to tailored advisory services, VOI produces several industry-leading reference publications including pharma handbook: A Guide to the International Pharmaceutical Industry® and generic handbook: A Guide to the U.S. Generic Drug Industry™. For more information, visit: http://www.voiconsulting.com.
Shannon Torley, Media Relations 954.302.8852 x 704 shannon(dot)torley(at)voiconsulting(dot)com