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Pricey new versions of old drugs fuelling huge rise in drug spending

September 02, 2005

'Breakthrough' drugs and growth in expenditure on prescription drugs in Canada BMJ Online First

Newly patented versions of old drugs are driving the rapid growth in expenditure on prescription drugs in most developed countries, without offering substantial improvements over existing products, finds a study published online by the BMJ today.

The rising cost of using these "me-too" drugs at prices far exceeding those of time-tested competitors deserves careful scrutiny, say the authors, based at the University of British Columbia in Canada, where spending on drugs doubled between 1996 and 2003.

They used classifications from the Canadian Patented Medicine Prices Review Board to examine which drugs drove this expenditure growth.

Between 1990 and 2003, the board appraised 1147 newly patented drugs. Of these, 68 (5.9%) met the regulatory criterion of being a breakthrough drug (defined as the first drug to treat effectively a particular illness or which provides a substantial improvement over existing drug products).

The balance of the newly patented drugs did not provide a substantial improvement over existing products, so were classified as "me-to" drugs. Older drugs (available before 1990) were classified as "vintage brand" or "vintage generic" drugs.

Breakthrough drugs accounted for 6% of expenditure and 1% of use in 1996, and 10% of expenditure and 2% of use in 2003.

Vintage brand and vintage generic drugs combined accounted for 75% of total use in 1996 and 54% in 2003, but only 53% and 27% of total annual expenditure. In contrast, me-too drugs accounted for 44% of use and 63% of expenditure by 2003. Their average cost per day of treatment was twice that of vintage brand drugs and four times that of vintage generic drugs.

Given that the list of top 20 drugs in global sales includes newly patented versions of older drugs, me-too drugs probably dominate spending trends in most developed countries, conclude the authors.

BMJ-British Medical Journal