Featured Health Business Daily Story, Feb. 23, 2017

Inflammatory Conditions, Diabetes Continue to Drive 2016 PMPY Spend

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans, PBMs, pharma companies and employers. Sign up for an $86 two-month trial subscription today.

By Angela Maas, Managing Editor
February 17, 2017Volume 18Issue 4

Although prescription drug costs for both traditional and specialty medications continued to increase last year, Express Scripts Holding Co. said it limited the increase of per-person overall spending to 3.8% in 2016. According to its recently released 2016 Drug Trend Report, that’s down from the 5.2% increase in spending that the PBM’s clients experienced in 2015. The company claims that even though utilization rose for both traditional and specialty drugs among its commercial plan clients, those that “leveraged the new and different approaches we created to address the new and different challenges to affordable medicine” experienced the most savings.

Traditional drugs rose 1.3% in use but declined 2.3% in unit cost, for an overall 1% decrease in spending. Utilization of specialty drugs grew 7.1%, and their overall unit cost increased 6.2%, contributing a total 13.3% to the overall 2016 trend. That 13.3% rise in specialty drug spending was the lowest reported since 2003, the year the company first included specialty drugs in the annual analysis.

Drug Benefit News

Among the top 15 therapy classes ranked by per-member per-year spend, inflammatory conditions topped the list, at $118.21 PMPY spend, followed by diabetes at $108.80. Entering the list were depression and contraceptives, which replaced mental/neurological disorders and compounded drugs.

In 2013, Express Scripts saw a huge rise in compound expenditures due in large part to an industry shift to ingredient-based billing. The following year, compounded medications ranked as the third most expensive traditional therapy class, with a PMPY spend of $46.04 (DBN 3/20/15, p. 3). In response, in July 2014 the PBM launched an aggressive compound management program that involved blocking more than 1,000 ingredients that it said had no proven clinical value when compounded (DBN 7/11/14, p. 1). In the 2015 Drug Trend Report, costs for the class had dropped 97%, and the current report says the class experienced an additional 76.4% decline in PMPY spend last year.

Hepatitis C Class Had Decline in Trend

Other therapy classes experiencing a decline in overall trend were high blood cholesterol, down 7.4%; high blood pressure/heart disease, down 9.1%; hepatitis C, which had a 34.0% drop; and heartburn/ulcer disease, with a 24.0% decrease.

Among the top 10 traditional drugs, four were diabetes medications, including the top three: Lantus (insulin glargine), at No. 1, followed by Humalog (insulin lispro injection) and then metformin. Total trend for the class was 19.4%. A follow-on insulin to Lantus, Basaglar, launched at the end of last year at a price 15% less than Lantus’ (DBN 12/23/16, p. 7).

Among the top 10 specialty drugs, four products were for inflammatory conditions, including the top two: Humira Pen (adalimumab) and Enbrel (etanercept). Total trend for this class was 26.4%. For the inflammatory drug class, employers paid an average of $3,587.83 per prescription. The FDA approved biosimilars for both Humira and Enbrel last year (DBN 9/23/16, p. 5), but their launches have been delayed by patent litigation.

Express Scripts forecasts that annual drug spending over the next three years will increase 10% to 13%, net of rebates. It expects trend for the diabetes class to be near 20% during that time, as drug prices and use of these medications continue to rise. Similarly, trend for the inflammatory conditions class will continue to hover around 30%.

The PBM has put programs in place through its SafeGuardRx offering for both classes. The anti-inflammatory program launched Jan. 1 (DBN 9/23/16, p. 5), and the diabetes program launched last April (DBN 5/20/16, p. 5).

View the report at http://lab.express-scripts.com/lab/drug-trend-report.

AIS’s Rx Benefit Data is an online subscription database with detailed data and insight on the medical and prescription drug benefit designs of commercial health plans. Learn more and check out a free interactive demo of the database!

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