Generic Effect: First Drop in U.S. Drug Spending in 55 Years

Overall spending on medicines in the United States dropped for the first time in about 55 years, according to a new study from the IMS Institute of Healthcare Informatics.

The new research showed drug expenditures totaled $325.8 billion in 2012, a 1 percent dip from 2011, as per capita spending fell 3.5 percent to $898, Reuters is reporting.

The purchasing decrease was the first recorded since IMS started tracking drug prices in 1957 and a starting point of a multiple-year stretch during which U.S. spending on prescription drugs will settle into a slower growth pattern than healthcare costs in general, said Michael Kleinrock, director of research development at IMS.

The main reason behind the spending drop was the availability of lower-cost generic versions of drugs such as the cholesterol-lowering Lipitor, by Pfizer Inc., heart drug Plavix, developed by Sanofi SA and Bristol-Myers Squibb, and the antipsychotic, Seroquel, by AstraZeneca Plc.

The pharmaceutical industry has been bracing for a loss of several top-name patents that ratings agency Fitch predicts will lead to a reduction of more than $70 billion in revenue from brand-name medicines that already started the second half of 2011 and is due to culminate near the end of 2015.

The study determined higher health costs and the still-lagging economy have led many Americans to cut back medical visits.

Hospital admissions have also continued to slide, while this year's flu season was relatively mild.

"Patients are being influenced by higher out-of-pocket costs as employers seek to rein in insurance costs," Kleinrock said. "Some choices that people are making may not be in everyone's best interest," meaning at least some could be putting their health in genuine jeopardy by putting off needed trips to their doctors, perhaps.

The IMS study discovered visits to emergency rooms increased 5.8 percent last year.

Meanwhile, U.S. healthcare costs remain heavily tipped toward a relative few patients suffering from an array of chronic conditions, such as cancer.

Among those who are commercially insured and under the age of 65, an estimated 5 percent incurred 51 percent of all healthcare expenditures last year, $15,684 per person.