Drug spending increasingly rewards pharmaceutical innovation over 'me-too' medicines
A long-running debate over prescription drug costs has centered on whether drug manufacturers are better rewarded for truly innovative medicines or so-called "me-too" drugs that may offer only incremental improvements over existing treatments but still command high prices.
Recent research from the USC Schaeffer Center for Health Policy & Economics suggests that drug spending has increasingly focused on highly novel medicines in recent years, rather than on so-called "me-too" drugs that offer only minor improvements. The study, published in Health Affairs, examined 20 years of data on approximately 600 newly approved small-molecule drugs and found that revenue growth from highly novel drugs far outpaced that of less novel drugs since 2013.
This shift is attributed to factors such as growing use of innovative drugs and restrictive formularies that make it easier to exclude drugs with multiple, similarly effective alternatives.
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