Compliance data Analytics, qordata’s foremost solution for pharmaceutical spend analytics, helps drug and device manufacturers gain visibility into their spend data. With the publication of 2016 records by CMS on 30th June 2017, qordata has been amongst the first to share the industry’s most incisive insights in this blog.
Data from 2016’s records includes information on 11.96 million financial transactions attributed to more than 600,000 physicians and more than 1,100 teaching hospitals, totaling a transaction value of $8.18 billion.
11.96 million financial transactions, attributed to more than 600,000 physicians and more than 1,100 teaching hospitals, totaling a transaction value of $8.18 billion.
But what are these records telling us?
Spend By Category: Organic Changes
At 53.3%, Research still commands the highest spend in pharmaceutical budgets.
But between 2015 and 2016, spend in this category declined by almost 2%, a particularly conspicuous change after spend increased from $4.071 billion (2014) to $4.450 billion in 2015.
Can the change entirely be attributed to patent cliffs and JVs? We are not so sure.
Following R&D were Ownership and Royalty, both of which have experienced growth in the past year. This is particularly significant for Ownership Spend, where pharma budgets experienced a decline in 2015 before recovering back to $1.021 billion in 2016. Royalty increased from $954 million (2015) to just over $1 billion in 2016.
The categories that occupied the lowest share in pharmaceutical spend were “Charity” ($16.64 million), “Accredited Speaker Programs” ($8.264 million), and “Entertainment” ($560,383).
This trend has borne out historically, as qordata’s analysis indicates. However, for those interested in a deeper probe, we would recommend exploring the categorization of Accredited Speaker Programs against “Non-Accredited Speaker Programs” (which drew $20.28 million, more than twice that of accredited programs) and Service (Speaking) fees which accounted for $582.6 million—one of the highest grossing spend categories in 2016.
Top Manufacturers: Sharp Shifts?
The top ten manufacturers by spend come as no surprise: The list is dominated by Genentech and Pfizer Inc, both of whom exceeded $400 million spend.
This was somewhat in contrast to Novartis Pharmaceutical Corporation, whose spend saw decreased from $577.52 million to $471.4 million in 2016 and placed it fourth in the list of top ten spenders.
A similar dip was experienced by Amgen Inc., whose spend rose from $147.8 million in 2014 to $364.1 million in 2015, only to fall back at $217.69 million in 2016.
For three organizations, namely Merck Sharp & Dohme Corporation, ICU Medical Inc, and Midmark Corporation, 2016 has been the year of steep spend escalation. For each of the three, spend increase has registered double-digit growth over 2014-2016:
The data engineering team at qordata also managed to sift through CMS’ records to find out which drugs drew the highest spend in 2016. Leading spend was Merck’s cancer drug Keytruda, at $222.7 million, followed by Afinator by Novartis, used to cure tumors.
