2020 Pharmacy Outlook: COVID Impacts, Script Trends, and Market Futures

Thursday, July 9, 2020
Author: 

Marsha K. Millonig, MBA, BPharm

The latest pharmaceutical market data paint an interesting picture of the pharmacy landscape for the remainder of 2020, especially new data showing the impact of COVID-19.

Industry watcher Doug Long, Vice President of Industry Relations for IQVIA™, provided market insights during a May 11 webinar hosted by Drug Store News. Long is a frequent presenter at major industry meetings throughout the year, and his latest presentation via webinar was in place of a live meeting cancellation where he was slated to speak.

Much has changed since the last market update I blogged about from the January annual meeting of the American Society of Automation in Pharmacy. In this webinar, Long presented data for the year ended in March, showing some impact of COVID-19, compared with the trends I wrote about in January which were for the year ended in September 2019.

IQVIA has been tracking a number of data sets and its most recent white paper, “Monitoring the Impact of COVID-19 on the Pharmaceutical Market,” was published May 15 with data comparisons through May 1. Analysis was against the industry averages for the baseline period of Jan. 10, 2020, through Feb. 28, 2020.

Prescription Trends

Not surprising is the growth in dispensing of 90-day prescriptions compared with the prior year, although that growth is slowing. It is Long’s opinion that many patients will continue to opt to receive a 90-day supply going forward, even after the pandemic. This will impact future prescription trends.

Telemedicine visits have skyrocketed since March, and telemedicine visits for attention deficit hyperactivity disorder (ADHD), depression, and migraine treatment are now above pre-COVID levels. Telemedicine visits produce significantly fewer new prescriptions for patients than office visits, so there has been downward movement on prescription numbers over the past two months.

There was significant growth in total prescriptions during the first quarter, which peaked the week ending March 27, 2020, then it fell below expected annual averages. Total prescriptions then increased again the first two weeks of May, reaching weekly averages of approximately 69 million. That compares with typical weekly averages of 79 million.

There also has been a slight increase in the number of written prescriptions (vs. e-prescribed or telephone orders) signaling that some patients are returning to office visits. Another indicator of increasing office visits is growth in pediatric vaccine sales. Adult vaccine sales for Shingrix, Prevnar 13, Pneumovax 23, and Gardasil are still lower than the baseline levels, at about 27% of peak sales from the week ending Feb. 28, 2020.

Care Visits and Procedures

As states began to reopen, IQVIA reported slight upticks in elective, non-emergency procedures, but these stats are highly variable based on geography, with most growth in cardiac, orthopedic, and GI procedures.

Overall consequences of the pandemic on healthcare dynamics and outcomes include:

  • Sharp declines in office visits and lab diagnostics
  • New diagnoses are down as are new therapy starts across nearly every therapeutic category
  • Telehealth volume has surged, but visits do not match those office visits lost
  • Providers of routine care and non-emergency procedures are being financially impacted

As the pandemic subsides, Long noted it will be interesting to see how the backlog of care visits is handled and at what point they return to normal levels.

Market Trends

Turning to the broad year-to-year market overview for the period ending in March 2020, Long noted these highlights:

  • U.S. medicines’ total market growth reached 6.7%, less than the growth of 7.4% in the retail and mail order segments.
  • Specialty drugs are driving market growth at 10.6%, while the traditional market is growing at 0.9%.
  • Oncology, autoimmune, and diabetes therapies were responsible for over 50% of the positive absolute growth in the U.S. and are 40% of recent new product launches.
  • Anticoagulants, diabetes, and respiratory therapies are strong drivers of growth in the retail sector, while oncology, autoimmune and HIV therapies are driving growth in the specialty sector.
  • Over the 10 years between 2009 and 2018, net per capita spending on prescription drugs grew only $44, but within that spend, specialty nearly doubled while traditional drugs declined in sales.
  • Although per capita spending rose slowly, the percent of patient out-of-pocket costs for outpatient prescription drugs vs. hospital care was 47% vs. 34%, leading Long to posit this may drive the perception of significant growth in prescription drug costs. Additionally, the proportion of patient costs paid through deductibles and coinsurance continues to grow.
  • Adjusted prescription growth rate increased 3.0% for the year-to-date ending in September 2019 (normalized for a 30-day supply), with just over 22,000 prescriptions dispensed per quarter, with chain/mass merchants dispensing 30,756 and 25,360, respectively, and independents dispensing 12,233.
  • 87.4% of prescriptions are dispensed for unbranded generics, but they only accounted for 19.8% of spending in 2019.

New Drug Launches

Interestingly, U.S. new product launches continued to trend upward, with 50 for 2019, including 26 orphan drugs. Late-stage pipeline growth is also being driven by specialty and niche therapies across a range of diseases. On the generic side, ANDAs have reached record highs. Long noted that 2023 will see numerous molecules and biologics losing exclusivity, so it is anticipated there will be many generic introductions that year. Between 2020 and 2023, there will be $165 billion decline due to patent loss vs. $93 billion for 2015-2019.

Looking ahead, Long predicted net total spending growth will average 3-6% over the next five years while invoice growth will grow between 4-7%. Key trends for pharmacies will continue to be:

Marsha K. Millonig, MBA, BPharm, is a practicing retail pharmacist and an Associate Fellow at the University of Minnesota College of Pharmacy’s Center for Leading Healthcare Change. She also consults on industry issues as president and CEO of Catalyst Enterprises, LLC.

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