Featured Health Business Daily Story, May 31, 2016

As Costs and Use Rise, Diabetes Drugs Are Growing Driver of Pharmacy Benefit Spend (with Table: Mean Cost of Diabetes Drugs for Six Months per Utilizing Member)

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
May 20, 2016Volume 17Issue 10

Diabetes medications have experienced tremendous price hikes and increases in utilization over the past five years. With multiple new entrants to this class of therapies, payers will need to make sure they have all the available data, as well as the proper context to view those data, when making coverage determinations. And although some newer medications may help reduce the incidence of a potentially fatal condition, that distinction may not make as much of a difference in formulary decisions, according to the second of a pair of recently released studies from Prime Therapeutics LLC.

The studies included 3.9 million members with both Type 1 and Type 2 diabetes. Among members with a claim for any diabetes drug, 6% were Type 1, and 94% were Type 2. Among people with an insulin claim, 24% were Type 1, and 76% were Type 2.

In the first study, researchers found that in the first half of 2011, all diabetes pharmacy claims cost $106 million, but by the first half of 2015, those costs had risen 168% to $285 million. In 2011, those costs represented 6.7% of all pharmacy benefit claims, but that climbed to 10.7% over the four years studied. During that time period, the mean cost of insulin claims per utilizing member rose 104.5%, from $1,239 to $2,537 (see table, p. 3). Overall, costs for insulin prescriptions in particular rose 200%, from $48 million to $144 million. Taken as a percentage of overall pharmacy claims, insulin costs increased from 3.0% to 5.4%.

“In the first six months of 2015, $1 of every $10 for all drugs was spent on diabetes drugs,” says Pat Gleason, Pharm.D., director of health outcomes at Prime and one of the authors of the studies.

Drug Benefit News

The pharmacy benefit cost increase is due to a combination of two things, Gleason says: a rise in prices combined with an uptick in utilization. “In particular, we’ve seen utilization in our commercial book of business increase by 50%,” he tells DBN. “This coincides with an increase in diabetes across the U.S.”

Specialty drugs, such as those to treat hepatitis C and autoimmune conditions like rheumatoid arthritis, generally receive all the attention as rapidly growing drivers of pharmacy trend. According to Gleason, for Prime’s commercial book of business, the specialty drug autoimmune class “has had an average 31 percent annual growth rate over the past three years, while the diabetes class has had an average 26 percent annual growth rate over the same period.”

As many payers secure rebates from manufacturers in exchange for preferred formulary status, “Prime does its best and we work very hard to obtain rebates where they’re available across all drug classes, including diabetes,” says Gleason. Most of the diabetes drugs on Prime’s preferred formulary have rebates available.

However, “As prices go up for diabetes drugs,…the price increases are not offset by rebates,” so those costs are passed on to members in the form of higher premiums, he explains.

Another factor in prices is the use of coupons for these products. Previously, concerns existed over whether members could afford their cost share for diabetes drugs. But now, with the availability of manufacturer coupons for insulins and branded diabetes products, “the concern of cost shares resulting in people not taking their medication may be going away,” Gleason says.

Prime tries to incentivize members to use its preferred products by giving them a lower cost share than that of the nonpreferred therapies. But if members use a coupon to purchase a nonpreferred product and “don’t use a preferred insulin, there is no rebate,” and “premiums are likely to go up at a faster rate.” This situation, he explains, “helps explain why formulary exclusions are going forward.…There’s a direct correlation between the amount of couponing and the increasing number of drugs on formulary exclusion” lists.

Multiple diabetes drugs are either new to the U.S. market or expected to launch this year, including:

  • Sanofi’s Toujeo, a higher-concentration form of Sanofi’s Lantus (insulin glargine) — which is the most commonly used long-acting insulin — launched in April 2015.

  • The Novo Nordisk drugs Tresiba (insulin degludec), a long-acting insulin, and Ryzodeg (insulin degludec/insulin aspart), which is a mixture of Tresiba and a rapid-acting human insulin, received FDA approval in September.

  • Basaglar, a follow-on version of insulin glargine, received FDA approval this past December. Following the resolution of patent litigation, the Eli Lilly and Co. drug is expected to launch in the U.S. in the fourth quarter of 2016.

  • Two insulin/glucagon-like peptide 1 (GLP-1) receptor agonist combinations could be approved in July or August: Sanofi’s LixiLan (lixisenatide/insulin glargine) and Novo Nordisk’s Xultophy, a combination of Tresiba and liraglutide, which is known as the diabetes drug Victoza.

However, it’s unclear whether the newer drugs will offer any kind of price decrease. The manufacturers are saying that the treatments have a lower risk of hypoglycemia — and the “data seems to indicate they have less events,” Gleason adds. But that statement is “not FDA-approved,” he points out, although that indication is approved in Europe.

ER Visits For Hypoglycemia Were Law

Even if the newer drugs do have fewer hypoglycemic events, however, that factor may not be enough to set them apart. That’s because another Prime study showed that the overall rate of emergency room visits for hypoglycemia was fairly low. “One of the main reasons we did the work we did is to understand the rate of hypoglycemic events” and what they cost, says Gleason.

Hypoglycemia has different severity levels, with the most severe potentially resulting in injury or death. Researchers found that emergency room visits for the condition among insulin-treated members occurred at a rate of about 15 per 1,000 patient years.

“Low blood sugar doesn’t necessarily result in a trip to the ER…and the consuming of medical resource dollars,” points out Gleason. “It’s very rare in our commercially insured business.”

A better understanding of that incidence rate will help in assessing the newer drugs, he says. “If they do come in at a higher price,” Prime’s pharmacy and therapeutics (P&T) committee can have insight on “what is the value of cost avoidance in the medical benefit” for these treatments, which is probably low based on the research, he says, adding that he doesn’t “want to discredit the potential value of a drug.” Prime is “integrating pharmacy and medical data…to allow our P&T committee” to have a complete picture of the therapies in order to inform its coverage decisions.

Mean Cost of Diabetes Drugs for Six Months per Utilizing Member

Members’ claims for diabetes drugs incurred in six month interval

Type 1 Diabetes Mellitus (T1DM) or Type 2 Diabetes Mellitus (T2DM)

T1DM

T2DM using any insulin

T2DM only using
non-insulins

2011 Q1&2

2015 Q1&2

2011 Q1&2

2015 Q1&2

2011 Q1&2

2015 Q1&2

2011 Q1&2

2011 Q1&2

Any antihyperglycemic agents

$735

$1,386

$1,386

$2,673

$1,596

$3,338

$449

$705

Any insulin

$1,239

$2,537

$1,368

$2,657

$1,239

$2,537

Basal insulins

$755

$1,705

$603

$1,328

$802

$1,777

Rapid-acting insulins

$1,027

$1,932

$1,091

$2,056

$940

$1,822

Pre-mixed insulins

$1,023

$2,153

$983

$1,966

$1,028

$2,173

Regular insulin

$490

$2,026

$463

$1,631

$500

$2,126

NIDA

$473

$780

$346

$337

$629

$1,150

$449

$705

Number of NIDAs in regimen:

0 NIDAs

1 NIDA

$149

$206

$344

$337

$250

$436

$133

$166

2 different NIDAs

$558

$929

$667

$1,219

$538

$858

3 different NIDAs

$1,307

$2,037

$1,379

$2,317

$1,292

$1,962

≥ 4 different NIDAs

$2,174

$3,341

$2,158

$3,589

$2,177

$3,280

Use of NIDA class:

Biguanides

$40

$78

$47

$84

$46

$100

$39

$74

SU

$53

$52

$63

$62

$52

$50

TZD

$990

$190

$1,005

$160

$987

$197

DPP-4

$850

$1,486

$851

$1,508

$850

$1,481

GLP-1

$1,177

$2,173

$1,201

$2,229

$1,170

$2,145

SGLT2

$1,422

$1,434

$1,418

Meglitinides

$656

$396

$725

$398

$627

$395

AGI

$207

$201

$236

$208

$198

$199

Amylin agonists

$1,528

$3,157

$1,377

$2,718

$1,583

$3,636

$1,787

$2,768

NOTES: NIDA = Non-insulin Diabetes Agent; SU = sulfonylurea; TZD = thiazolidinedione; DPP-4 = DPP-4 inhibitor; GLP-1 = GLP-1 receptor agonist; SGLT2 = SGLT2 inhibitor; AGI = alpha-glucosidase inhibitors; T1DM and T2DM = classified by claims-based algorithm as type I or type II diabetes mellitus, respectively;  Q1&2 = Jan. 1 to June 30 of specified year; Utilizing Member = member with pharmacy claims during the six month interval that meet row criteria. Mean Cost for Six Months per Utilizing Member = sum of assigned cost for class divided by total number of members with a claims for any agent in the drug class. All costs for diabetes drugs only and are actual pharmacy insurance paid amounts to the pharmacy, including the member share and plan paid.

Data from 3,947,165 continuously enrolled commercially insured lives from Jan. 1, 2011, through June 30, 2015, of which 15,011 (0.38%) were categorized as T1DM and 226,639 (5.74%) were categorized as T2DM.

SOURCE: Bowen K, Gleason P. Diabetes Mellitus Prevalence, Incidence, Drug Regimens, and Insulin Therapy Cost by Type Among 4 Million Commercially Insured Members Continuously Enrolled 4.5 Years. Academy of Managed Care Pharmacy: San Francisco, CA, Apr 2016. Journal of Managed Care Pharmacy 2016;22(4-a):S45-S46.

© 2016 by Atlantic Information Services, Inc. All Rights Reserved.


At The AIS Marketplace — Specialty Pharmacy Trends and Strategies covers the most relevant topics in the specialty pharmacy arena, with details on the latest trends in: hepatitis C management; management of PCSK9 inhibitors; cost-control tactics such as formulary exclusions and placement; oncology management; biosimilars; specialty benefit design for commercial health plans; value-based specialty pharmacy initiatives; personalized medicine; the specialty pharmacy pipeline and other new products; and more. Click here for more information and to order the all-new 2016-2017 edition today!

It's quick and easy to sign up for FREE access to AISHealth.com!

Why do I need to register?