Projected Spending on Psychotropic Medications 2013–2020

  • Dominic Hodgkin
  • Cindy Parks Thomas
  • Peggy L. O’Brien
  • Katharine Levit
  • John Richardson
  • Tami L. Mark
  • Kevin Malone
Original Article
  • 231 Downloads

Abstract

Spending on psychotropic medications has grown rapidly in recent decades. Using national data on drug expenditures, patent expirations, future drug development and expert interviews, we project that spending will grow more slowly over the period 2012–2020. The average annual increase is projected to be just 3.0 % per year, continuing the steady deceleration in recent years. The main drivers of this expected deceleration include slower development of new drugs, upcoming patent expirations which will lower prices, and payers’ growing ability to manage utilization and promote generic use. The slowdown will relieve some cost pressures on payers, particularly Medicare and Medicaid.

Keywords

Psychotropic medications Spending growth Generic drugs 

References

  1. Aitken, M. L., Berndt, E. R., Bosworth, B., Cockburn, I. M., Frank, R., Kleinrock, M., & Shapiro, B. T. (2013). The regulation of prescription drug competition and market responses: Patterns in prices and sales following loss of exclusivity NBER Working Paper Series. Cambridge, MA: National Bureau of Economic ResearchGoogle Scholar
  2. Berndt, E. R., & Aitken, M. L. (2011). Brand loyalty, generic entry and price competition in pharmaceuticals in the quarter century after the 1984 Waxman-Hatch legislation. International Journal of the Economics of Business, 18(2), 177–201.CrossRefGoogle Scholar
  3. Center for Medicare and Medicaid Services (2013). National health expenditure (NHE) Amounts by type of expenditure and source of funds: Calendar years 1965–2022. Retrieved May 26, 2015, from http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html.
  4. Centers for Medicare & Medicaid Services. (2012). Medicaid program: Eligibility changes under the Affordable Care Act of 2010 (CMS-2349-F). Baltimore, MD: Centers for Medicare & Medicaid Services. Retrieved May 26, 2015, from http://www.medicaid.gov/AffordableCareAct/downloads/CMS-2349-F-RegulatoryImpactAnalysis.pdf.
  5. Centers for Medicare & Medicaid Services. (2014). Accuracy analysis of the short-term (11-year) national health expenditure projections. Retrieved July 04, 2014, from http://www.cms.gov/NationalHealthExpendData/downloads/ProjectionAccuracy.pdf
  6. Congressional Budget Office. (2013). Table 1. CBO’s May 2013 Estimate of the Affordable Care Act on Health Insurance Coverage. Washington, D.C.: Congressional Budget Office. Retrieved May 26, 2015, from https://www.cbo.gov/sites/default/files/cbofiles/attachments/43900-2013-05-ACA.pdf.
  7. Cuckler, G. A., Sisko, A. M., Keehan, S. P., Smith, S. D., Madison, A. J., Poisal, J. A., & Stone, D. A. (2013). National health expenditure projections, 2012–22: slow growth until coverage expands and economy improves. Health Affairs (Millwood), 32(10), 1820–1831. doi:10.1377/hlthaff.2013.0721.CrossRefGoogle Scholar
  8. Donohue, J. M., Huskamp, H. A., & Zuvekas, S. H. (2009). Dual eligibles with mental disorders and Medicare part D: how are they faring? Health Affairs (Millwood), 28(3), 746–759. doi:10.1377/hlthaff.28.3.746.CrossRefGoogle Scholar
  9. Druss, B. G., Marcus, S. C., Olfson, M., & Pincus, H. A. (2004). Listening to generic Prozac: Winners, losers and sideliners. Health Affairs, 23(5), 210–216. doi:10.1377/hlthaff.23.5.210.CrossRefPubMedGoogle Scholar
  10. Finkelstein, A., Taubman, S., Wright, B., Bernstein, M., Gruber, J., Newhouse, J., & Oregon Health Study Group. (2012). The oregon health insurance experiment: Evidence from the first year. Quarterly Journal of Economics, 127(3), 1057–1106.CrossRefPubMedPubMedCentralGoogle Scholar
  11. Foster, R. (2010). Estimated financial effects of the “Patient Protection and Affordable Care Act”, as amended. Baltimore, MD: Centers for Medicare & Medicaid Services. Retrieved Apr 22, 2010, from http://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf.
  12. Goplerud, E., & Center, National Opinion Research. (2013). Consistency of large employer and group health plan benefits with requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. Chicago: University of Chicago.Google Scholar
  13. Hartman, M., Martin, A. B., Benson, J., & Catlin, A. (2013). National health spending in 2011: overall growth remains low, but some payers and services show signs of acceleration. Health Affairs (Millwood), 32(1), 87–99. doi:10.1377/hlthaff.2012.1206.CrossRefGoogle Scholar
  14. Ibrahim, H. M., & Tamminga, C. A. (2012). Treating impaired cognition in schizophrenia. Current Pharmaceutical Biotechnology, 13(8), 1587–1594.CrossRefPubMedGoogle Scholar
  15. Levit, K. R., Mark, T. L., Coffey, R. M., Frankel, S., Santora, P., Vandivort-Warren, R., & Malone, K. (2013). Federal spending on behavioral health accelerated during recession as individuals lost employer insurance. Health Affairs, 32(5), 952–962. doi:10.1377/hlthaff.2012.1065.CrossRefPubMedGoogle Scholar
  16. Mark, T. L., Kassed, C., Levit, K., & Vandivort-Warren, R. (2012). An analysis of the slowdown in growth of spending for psychiatric drugs, 1986–2008. Psychiatric Services, 63(1), 13–18. doi:10.1176/appi.ps.201100564.CrossRefPubMedGoogle Scholar
  17. Mark, T. L., Levit, K. R., Yee, T., & Chow, C. M. (2014). Spending on mental and substance use disorders projected to grow more slowly than all health spending through 2020. Health Affairs (Millwood), 33(8), 1407–1415. doi:10.1377/hlthaff.2014.0163. Research Support, U.S. Gov’t, P.H.S..CrossRefGoogle Scholar
  18. Mark, T. L., Wier, L. M., Malone, K., Penne, M., & Cowell, A. J. (2015). National estimates of behavioral health conditions and their treatment among adults newly insured under the ACA. Psychiatric Services, 66, 426–429. doi:10.1176/appi.ps.201400078.CrossRefPubMedGoogle Scholar
  19. Miyamoto, S., Miyake, N., Jarskog, L. F., Fleischhacker, W. W., & Lieberman, J. A. (2012). Pharmacological treatment of schizophrenia: a critical review of the pharmacology and clinical effects of current and future therapeutic agents. Molecular Psychiatry, 17(12), 1206–1227. doi:10.1038/mp.2012.47.CrossRefPubMedGoogle Scholar
  20. Moghaddam, B., & Javitt, D. (2012). From revolution to evolution: the glutamate hypothesis of schizophrenia and its implication for treatment. Neuropsychopharmacology, 37(1), 4–15. doi:10.1038/npp.2011.181.CrossRefPubMedPubMedCentralGoogle Scholar
  21. Murrough, J. W., & Charney, D. S. (2012). Is there anything really novel on the antidepressant horizon? Current Psychiatry Reports, 14(6), 643–649. doi:10.1007/s11920-012-0321-8.CrossRefPubMedPubMedCentralGoogle Scholar
  22. O’Brien, P. L., Thomas, C. P., Hodgkin, D., Levit, K. R., & Mark, T. L. (2014). The diminished pipeline for medications to treat mental health and substance use disorders. Psychiatric Services, 65(12), 1433–1438. doi:10.1176/appi.ps.201400044.CrossRefPubMedPubMedCentralGoogle Scholar
  23. Saha, A., Grobowski, H., Birnbaum, H., Greenberg, P., & Bizan, O. (2006). Generic competition in the US pharmaceutical industry. International Journal of the Economics of Business, 13(1), 15–38.CrossRefGoogle Scholar
  24. Substance Abuse and Mental Health Services Administration. (2012). Results from the 2011 national survey on drug use and health: Mental health findings. Rockville, MD: Substance Abuse and Mental Health Services Administration. HHS Publication No. (SMA) 12-4725.Google Scholar
  25. Substance Abuse and Mental Health Services Administration. (2013). National expenditures for mental health services and substance abuse treatment, 1986–2009. Rockville, MD: SAMHSA.Google Scholar
  26. Substance Abuse and Mental Health Services Administration. (2014). Projections of national expenditures for treatment of mental and substance use disorders, 2010–2020. Rockville, MD: Substance Abuse and Mental Health Services Administration.Google Scholar
  27. Thomas, C., Hodgkin, D., Wallack, S., Martin, T., Ritter, G., & Mark, T. (2007). Mental health and substance abuse treatment prescription drugs: Lessons from a period of high spending growth. Journal of Pharmaceutical Finance Economics and Policy, 16(3), 67.Google Scholar
  28. U.S. Census Bureau. (2011). Downloadable files containing information from the 2011 American Community Survey. Washington, D.C.: U.S. Census Bureau. Retrieved May 26, 2015, from http://www.census.gov/acs/www/data_documentation/2011_release/.

Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Dominic Hodgkin
    • 1
  • Cindy Parks Thomas
    • 1
  • Peggy L. O’Brien
    • 2
  • Katharine Levit
    • 3
  • John Richardson
    • 4
  • Tami L. Mark
    • 3
  • Kevin Malone
    • 5
  1. 1.Heller School for Social Policy and ManagementBrandeis UniversityWalthamUSA
  2. 2.Behavioral Health and Quality ResearchTruven Health AnalyticsCambridgeUSA
  3. 3.Behavioral Health and Quality ResearchTruven Health AnalyticsBethesdaUSA
  4. 4.University of Michigan School of Public HealthAnn ArborUSA
  5. 5.Centers for Medicare & Medicaid ServicesBaltimoreUSA

Personalised recommendations