Good news for anyone worried about where prescription drug money goes: a new study finds that U.S. spending on medicines is increasingly rewarding drugs that offer genuine breakthroughs, not just minor variations of existing treatments.
Researchers at the USC Schaeffer Center for Health Policy and Economics looked at 20 years of data covering roughly 600 newly approved drugs. They developed a way to measure how novel each medicine was, examining factors like how different its molecular structure was from other drugs and whether it targeted something entirely new in the body.
The results, published in the journal Health Affairs, tell a story of positive change. Around 2013, something shifted. Revenues for the most scientifically novel drugs began climbing sharply, while spending on drugs that closely resembled existing treatments grew much more slowly. By the end of the decade, drugs with highly unique therapeutic targets were earning an average of $1.6 billion in gross revenues, compared to just $400 million a decade earlier. That's a fourfold increase.
This wasn't simply because a few expensive medicines dominated the market. The researchers found that doctors were simply writing more prescriptions for innovative drugs while fewer prescriptions went to