Drug Costs Slowing Down, but Still High for Specialty Drugs

Alicia Ault

March 06, 2018

Two pharmacy benefit management (PBM) companies are reporting that prescription drug costs increased at historically low levels in 2017 ― after accounting for discounts and rebates negotiated with drug companies ― but that both cost and utilization of specialty drugs continued to rise.

Per-person spending in Express Scripts' commercial plans rose 1.5% in 2017, less than half the growth in 2016 and the lowest that the St. Louis–based PBM has measured since 1993, according to the company's 2017 Drug Trend Report.

Drug costs for the Medicare and Medicaid plans enrolled in Express Scripts' programs rose by 2.3% and 3.7%, respectively. Spending declined by a little more than 3% among the Affordable Care Act (ACA) health exchange plans managed by Express Scripts.

Another PBM, Prime Therapeutics LLC, said in a news release that spending didn't just slow, it was in negative territory: -0.2% for commercial plans, -0.8% for Medicare Part D, and -5.4% for Medicaid.

Express Scripts said in its report that traditional drugs made up the bulk of 2017 spending — accounting for 60% of prescription therapies. Spending on those drugs declined by a little more than 4%, mostly because of a drop in unit costs.

But spending on specialty drugs ―which made up 41% of total spending ― increased 11% in 2017. Although utilization of those products increased by 8%, unit costs rose by a relatively small 3%, in part because of special programs designed by Express Scripts to target those high-cost therapies. Unit costs were also kept in check by the availability of generic versions of imatinib mesylate (Gleevec, Novartis) and glatiramer acetate injection (Copaxone, Teva), said the company.

Similarly, Prime, which is based in Eagan, Minnesota, said that specialty spending increased 13% for commercial clients and about 4% for Medicare Part D clients. A key contributor to this was an increase in spending for drugs used to treat autoimmune conditions, such as rheumatoid arthritis and multiple sclerosis. Spending rose 16% to 25% for those products.

Similarities to 2016

Just as in 2016, specialty drugs to treat inflammatory conditions, diabetes therapies, and oncology drugs were the cost leaders in both the Express Scripts report and the Prime Therapeutics report.

Prime said the rheumatoid arthritis drugs adalimumab (Humira Pen, AbbVie) and etanercept (Enbrel Sureclick, Amgen) were the cost leaders for its commercial plans. Humira was also the top drug for its Medicaid plans, followed by the diabetes therapy insulin glargine injection (Basaglar, Eli Lilly).

Express Scripts estimated the per member, per year (PMPY) cost for anti-inflammatory specialty drugs at $157 for commercial plans, driven mostly by an 11% unit cost increase. In those plans, the the spending for diabetes drugs was $116, but for Medicare plans, diabetes drugs were the most expensive element, at $422 PMPY.

Oncology drugs came in at $70 PMPY for commercial plans, but $398 PMPY for Medicare plans. For Medicaid plans, HIV drugs were the drug spending leaders, at $218, followed by diabetes therapies, at $152. HIV drugs were the third most expensive drug category in ACA exchange plans.

Express Scripts said that drugs for cancer, inflammatory conditions, and HIV were big contributors to spending increases across all plans, mainly owing to higher unit costs. Cancer and HIV drugs are also protected from strict price management by the Centers for Medicare & Medicaid Services.

The company expects prices — and spending — to continue rising for oncology, HIV, and inflammatory drugs over the next few years. Biosimilar anti-inflammatories are still 2 years off, and new cancer drugs are commanding ever-higher prices. In addition, HIV patients are being switched to newer, more costly therapies.

Hepatitis C therapies — which have been primary drivers in rising drug costs over the past few years — dropped far down the list. Utilization fell by 40% in commercial plans and 26% in Medicaid, as patients using newer therapies completed treatment, said Express Scripts. Prime Therapeutics also said that lower utilization of hepatitis C drugs helped push its specialty spending for Medicaid to -1.8%.

Spending increases were highest for anticoagulants, which saw a 20% rise in unit cost and a 5% increase in utilization. That was driven by a move to newer, more expensive oral anticoagulants, said Express Scripts. Anticoagulants were the sixth-most-expensive products for Medicare beneficiaries managed by that PBM. Prices for that category are also expected to keep rising over the next two years, Express Scripts said.

Prime Therapeutics reported that the most expensive drug for its Medicare clients was apixaban (Eliquis, Bristol-Myers Squibb), an anticoagulant.

Driving Down Opioid Scripts

Both Express Scripts and Prime Therapeutics reported that the companies' opioid reduction programs had been successful.

At Express Scripts, individuals enrolled in the oversight program received an average of 7 days of medication, down from 18 days before the program began in September 2017. Opioid use was reduced by 10% in the commercial plans, 5% in Medicare, and 16% in Medicaid. Utilization dropped by about 17% in the health exchange plans.

Use of drugs to treat opioid dependence rose by almost 9% in the commercial plans, 23% in Medicare plans, and 18% in Medicaid plans. But there was a decline in utilization of almost 11% in the exchange plans. Express Scripts did not explain that discrepancy in utilization.

Prime Therapeutics also reported a decrease in the use of controlled substances, with a reduction of 15% for commercial plans, 12% for Medicare, and 10% for Medicaid.

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