US Net Drug Spending Surged 11.4% Last Year, Boosted by Obesity and Oncology Meds: IQVIA
As predictable as the dawn, prescription medicine use and overall drug spending continue to escalate in the United States. The IQVIA Institute, a prominent life sciences intelligence firm, recently released a comprehensive report examining trends in medicine usage backed by data from 2024. In 2024, total prescription medicine use in the U.S. saw a 1.7% increase, translating to approximately 215 billion days of therapy on daily doses, according to IQVIA’s Understanding the Use of Medicines in the U.S. 2025 report.
This uptick in usage accompanied a considerable rise in spending, with the U.S. market experiencing a net price growth of 11.4%. This increase marks a significant jump from the 4.9% rise recorded in 2023. The 11.4% surge in net spending amounts to a $50 billion increase, reaching a staggering total of $487 billion in aggregate drug spending. IQVIA characterized 2025 as a year of “historic growth,” exceeded only by the extraordinary surge stimulated by COVID vaccine distribution in 2021.
Key Drivers of Spending Growth
The contributors to this growth were primarily composed of popular GLP-1 agonist medications targeting diabetes and obesity, alongside drugs that received significant label expansions allowing access to larger patient populations. Some of these medications have established themselves as essential “backbone therapies” in clinical practice. Notably, only three of the 31 high-growth drugs recorded were newly launched products from 2023 or 2024.
Among those recent entries are Roche’s Vabysmo, aimed at treating age-related macular degeneration; Sanofi and AstraZeneca’s Beyfortus for respiratory syncytial virus (RSV); and Novartis’ Kesimpta, which is used in managing multiple sclerosis. Additionally, IBQVA underscored AbbVie’s Skyrizi as the predominant driver of spending growth in immunology, particularly for its psoriasis indication. Remarkably, GLP-1 medications alone accounted for 29% of the overall spending growth in 2024.
The Impact of Patent Expirations
Over the previous five years, several high-profile drugs, such as AbbVie’s Humira, have lost patent protection, allowing generic competitors to enter the market. The repercussions of such patent expirations have totaled an impressive $77.5 billion in market shifts, predominantly impacted by biologics and their biosimilar equivalents, rather than their small molecule counterparts facing generic competition. This trend is poised to worsen in the near future, as blockbuster medications such as Amgen’s Prolia and Xgeva and Johnson & Johnson’s Stelara are at risk of the same fate, facing biosimilar competition in 2025.
Forecast for Drug Spending Through 2029
Looking ahead, IQVIA forecasts a widening gap between spending based on list prices, projected to increase by 5-8% annually, versus manufacturers’ net revenues, which are expected to grow by about 3-6% on average each year. Consequently, total net spending on prescription medications is anticipated to surpass $600 billion by 2029.
Oncology and obesity medications are likely to continue fueling this upward growth trajectory. Analysts at IQVIA project over 100 new drug launches and significant label expansions in the oncology sector through 2029, contributing to an expected $165 billion in oncology-related spending during this timeframe. The situation concerning obesity medications, however, presents a more complex picture, with various reimbursement scenarios affecting forecasts. Despite this uncertainty, IQVIA’s optimistic base case suggests that net spending on obesity treatments could reach approximately $60 billion by 2029.
Conclusion
In summary, the U.S. drug spending landscape is undergoing dynamic transformations amidst rising demand for treatments for chronic conditions, particularly obesity and cancer. As more products enter the market and existing drugs lose exclusivity, the financial implications for manufacturers and patients alike will be significant. Stakeholders should prepare for a shifting landscape as net drug spending is expected to continue its upward trend in the coming years.
