Pharma's benefiting from a spike in drug spending

The U.S. spent $344 billion on prescription drugs in 2018 — 4.5% more than the year before, according to pharmaceutical data firm IQVIA.

The big picture: Society collectively paid more for drugs last year, at a rate well above economic growth, because drugmakers launched new drugs with lofty price tags, sold more of their existing drugs, and raised prices on their blockbuster products.

Between the lines: Gross spending on drugs was $479 billion in 2018, but rebates and discounts collected by health insurance companies, pharmacy benefit managers and others in the supply chain lowered that amount by 28%, thus getting to the net figure of $344 billion.

The bottom line: Pharmaceutical companies and industry middlemen benefited from higher spending in 2018, even amid the furor from patients and lawmakers over unaffordable prescriptions.

• And early federal data shows there's a chance net drug spending in 2019 may be rising at a similar rate.