Prescription drug spending in the USA hit a new record high in 2014

Spending on prescribed drugs in the US increased by a massive 13% in 2014 to a total sum of $374bn (£306bn), with over $11bn of the total spend accounted for by spending on newly released drugs used to treat hepatitis C. The US government’s newly introduced Affordable Care Act did not have the impact many analysts thought it would, accounting for around $1bn of the increase in spend.


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Hepatitis C breakthrough

The hepatitis C drugs had the biggest impact on the spend increase, with the revolutionary Sovaldi, from Gilead Science Inc costing in excess of $80,000 for each individual patient who used it. According to, Sovaldi prevents the hepatitis C virus multiplying in the patient’s body.

Statistics show that almost 10 times more hepatitis C sufferers began treatment in 2014 than in 2013, helping to push Sovaldi to the top of the list of the US’s top selling prescription drugs. While the high price of the breakthrough drug has attracted widespread attention and criticism from insurance companies and government officials, the manufacturer says the price tag is justified. It is expected that the price of Sovaldi will fall in future as other pharmaceutical companies launch their own new hepatitis C treatments and provide Gilead with heavy competition in the field.

Analysts point to the decision taken by many hepatitis C patients in 2013 to delay treatment until 2014, as they were waiting for Sovaldi to become available, as a factor in the huge jump in spend.

New drugs contribute to increased drug spending

In total, new prescription drugs accounted for $20.3bn of the US spend, showing the huge market potential of new research. Drugs used to treat multiple sclerosis were also responsible for a large part of the spending increase, with new therapies accounting for $4.7bn of revenue. The question of how long does it take to get a FDA 510k approved is a tough one to answer, as the timescale varies hugely. Many pharmaceutical firms contract specialist companies to handle their FDA third party review proceedings to expedite the journey of new drugs to market.

While some industry analysts believe 2014 was a one-off in terms of the phenomenal growth of the prescription drug market, the overall pattern of spending continues to rise.