• linkedin
  • Increase Font
  • Sharebar

    Brand and specialty drug spending spikes

    Spending on brand name drugs spiked 16.2% in 2015 and 98.2% since 2011, according to a new report from pharmacy benefit manager (PBM) Express Scripts. Plus, a third of branded products experienced price increases greater than 20% in 2015, according to Express Scripts’ annual Drug Trend Report.

    Specialty medications remain a key contributor to drug spending for payers, accounting for more than 37% of drug spend in 2015, and forecast to reach 50% by 2018. Spending on specialty medications jumped 17.8% in 2015.

    Among drivers of specialty pharmacy spend were unit cost increases greater than 17% for Enbrel (etanercept) and Humira Pen (adalimumab), which contributed significantly to the 25% spending increase for the inflammatory conditions medication class.

    Related: Will the government take action on drug pricing?

    Among non-specialty therapy classes, diabetes was the most expensive, with an overall increase in spending of 14%, driven equally by increases in utilization and unit cost. Lantus (insulin glargine), the preferred insulin on our NPF, had a 13.7 % decrease in unit cost. “However, high costs for pre-filled insulin pens and newer, expensive therapies continue to drive spend in the category,” Express Scripts said in a statement. 

    The PBM also found that patients in the healthcare exchange are spending more on prescriptions.  “The overall increase in spending between 2014 and 2015 for the exchange population was 14.6%, higher than the trends among commercial, Medicare and Medicaid populations,” according to a statement from the PBM.

    An 8.6% increase in overall prescription utilization was the primary driver for the spending increase, a trend that may be due to patients in exchange fulfilling a prior unmet need, and newly insured beneficiaries fully using their new prescription drug benefit.

    Related: Senate to conduct investigation into Rx drug pricing

    "Many members, previously uninsured or underinsured, were newly diagnosed with chronic conditions, or sought treatment for pre-existing conditions," said Julie Huppert, vice president of Health Care Reform for Express Scripts. "Trends in this market should settle as benefit usage stabilizes, and plans learn more about their patients and implement additional proven pharmacy management programs."

    While hepatitis C treatment was a leading driver of record drug spending in 2014, payers enrolled in Express Scripts' Hepatitis Cure Value Program lowered the cost of curative therapy by 50%, saving $1 billion while providing treatment to nearly 50,000 patients, according to the PBM.

    Payers also effectively mitigated the dramatic increases in spending on compounded medications that occurred in 2014, achieving a 97% drop in total plan costs for this class in 2015 through Express Scripts' compound management solution.

    Express Scripts forecasts total drug spending by its payers to increase between 6% and 8% annually between 2016 and 2018, net of rebates. Specialty spending, led by inflammatory conditions and new discoveries for cancer, is forecast to increase an average of 17% annually over the next three years.

    Read more: Americans want drug pricing reform

    Christine Blank
    Contributing Editor Christine Blank is a freelance writer based in Florida.

    0 Comments

    You must be signed in to leave a comment. Registering is fast and free!

    All comments must follow the ModernMedicine Network community rules and terms of use, and will be moderated. ModernMedicine reserves the right to use the comments we receive, in whole or in part,in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

    • No comments available