What Made Americans Switch to Expensive Drugs?

What Made Americans Switch to Expensive Drugs

Americans are spending more money on medicines this year. Over the nine months of this year, the sale of drugs in pharmacies increased by 10.9%. At the same time, the number of packages sold, on the contrary, decreased. The discrepancy is explained by the fact that the population began to buy more expensive medicines – from $50 and more. Experts note that this is a compulsory measure associated with the pandemic.

From January to the end of July, US pharmacies sold drugs for almost $12,000,000, which is 10.9% more than in the same period last year. This figure has become a record over the past six years.

Meanwhile, the number of sold packages of medicines, on the contrary, decreased by 1.7%. That is, people buy less, but spend more.

Experts explain this by the fact that Americans are more likely to purchase expensive medicines. So, according to the research, this year in the USA the sales of expensive drugs grew most actively. Their market share compared to last year increased from 42.7% to 44.8%. Cheaper segments, on the contrary, have reduced their share.

Meanwhile, the choice of expensive drugs was forced, say experts. It can be assumed that due to the pandemic, the structure of drug consumption has changed. According to experts, it happened in the second and third quarters.

People started buying drugs for immunization. Besides, those who fall ill and are treated at home buy the necessary medicines – often antibiotics – for their own money. Antibiotics are expensive. This is not about people’s preferences, but about the fact that the epidemiological situation forced them to reorient themselves to other groups of drugs.

In addition, the seasonal expenses of Americans on medicines have slightly changed, the expert notes. Earlier in the summer people preferred to boost immunity in a natural way, but in 2021, many people began to seek pharmaceuticals. In the summer and early fall, Americans bought drugs for immunization, although they usually began to take them much later.

The structure of drug consumption by the population has shifted in favor of more expensive drugs. And the main reason is the 2021 epidemic. The last drugs released cost about $150. Now they are included in the list of Vital and Essential Medicines. All antiviral drugs are expensive. Inflammatory drugs and antibiotics are also expensive.

From the point of view of public health, the use of a large number of antiviral drugs, immunomodulators and antibiotics is not the best option, specialists believe.

As for the drug market, a 10% growth is quite normal. In the past few years, the growth rates have slowed down, but five years ago the market added 16% or even more, the expert noted.

Growth in loans for medicines

In 2020, the number of payday loans CT issued for medicines has grown significantly.

Buyers are offered a loan for a period of 1-4 weeks and in the amount of $100 to $1,000.

Lenders report that their clients usually take loans for expensive medicines. These are drugs that cost more than $100.

At first glance, such offers seem rational. For almost five and a half years, real incomes of the population have been falling. About 33 million Americans live below the poverty line, according to statistics. If people do not have money, then they will take a loan for some necessary goods or services.

The BBC asked pharmacy chains if they were ready to issue loans for medicines. Judging by their answers, this will not become a trend.

Representatives of pharmacies explained that loans for medicines are designed for patients who urgently need expensive treatment.

“Such a loan with a high degree of probability can be claimed only when a person buys drugs that cost more than $100 per package,” said the pharmacy representative. These drugs account for 5% of the market, he said with reference to expert data.

Why is healthcare becoming more expensive?

Another reason for the increase in drug revenues this year is the rise in drug prices. According to experts, the cost of drugs for the first 7 months of this year increased by 3.64%. This is slightly higher than the official inflation rate of 2.9%.

One more reason for the increase in drug prices is mandatory labeling. Because of it, the cheapest drugs that were sold in primary packaging (blisters) left the market. Now drugs can only be sold in secondary packaging with more pills. Because of this, the price also increases.

Meanwhile, according to research, consumers are starting to switch to larger packs containing, for example, 50 tablets or capsules. Their sales in kind have grown by 9% since the beginning of the year. Experts explain this by the fact that in this way the population is trying to reduce their costs.

The increase in demand can be explained by the fact that it is more profitable to buy a large package. In addition, in a pandemic, the whole family can use it since often more than one person is sick. Previously, they did not get sick so often, and a large package was not always needed.

Buying more expensive drugs is an additional burden, especially in the context of the economic crisis. According to statistics, the real disposable money income of the population in the third quarter of this year decreased by 4.8% compared to the same period of 2020.

Rising drug costs have partly offset the sharp decline in other spending amid the pandemic. People began to visit restaurants, cinemas, and go on vacation less. The costs for clothing, footwear, and even hygiene products have been partially reduced. The use of the car and the consumption of gasoline have decreased.

Category: General Issues