Specialty drugs drive Rx spending increase, Blue Cross says
- Spending by Blue Cross Blue Shield insurers increased from 2016 to 2017 primarily through increases in spending on specialty drugs, according to a report released Wednesday by the Blue Cross Blue Shield Association and Blue Health Intelligence.
- Insurers under the Blues' umbrella, dozens of independently run payers, spent about $100 billion on prescription drugs in 2017, roughly 20% of plans overall healthcare spending. The figure is 2% higher than it was in 2016, continuing a trend of consistent increases in drug spending since 2010. While generic drugs accounted for 83% of total prescriptions, branded drugs were 79% of total drug spending at $79.5 billion last year.
- The report also disclosed the 30 drugs BCBS spent the most on in 2017. More than two-thirds of these therapies were specialty drugs, which treat complex health conditions that typically require special handling, administration or monitoring. Specialty drugs saw the most aggressive cost increases compared to generics and other patent-protected branded drugs, up 10% from 2016.
BCBS' report, which points the finger at drugmakers for rising healthcare costs, comes at an opportune time politically, when about 40% of Americans said healthcare was their No. 1 issue going into the midterm elections.
Furthermore, drug pricing is now at the top of healthcare issues that could see potential bipartisan congressional reform, as Rep. Nancy Pelosi, D-Calif., the potential Speaker of the House when Democrats take over, and Senate Majority Leader Mitch McConnell, R-Ky., highlighted drug pricing as a priority for the next legislative session.
"Accountability and transparency are key to developing a better understanding of overall health care costs, particularly the cost of prescription drugs that are essential to maintaining a person's health," Maureen Sullivan, the Blue Cross Blue Shield Association's chief strategy and innovation officer, said in a Nov. 14 statement. "The report findings underscore the underlying cost drivers in the prescription drug market and identify potential surges in overall drug costs in the future."
These surges, the report found, are led by specialty drugs and patent-protected drugs. While Blue Cross plans spent about 5% more on patent-protected brand drugs in 2017 than in 2016, the insurers spent 10% more on specialty drugs between the two years.
The three drugs Blue Cross plans spent the most on last year were all specialty biologics: Humira (adalimumab), Remicade (infliximab) and Enbrel (etanercept). Spending outpaced growth in total prescriptions for all three (with Remicade actually dropping 5% in total prescriptions while still posting a 5% increase in total cost).
Of the top 30 drugs the insurers spent the most on in 2017, 22 were specialty drugs. The category of therapies has risen in cost for BCBS steadily over this decade, from about $10 billion in 2011 to more than $27 billion last year, despite making up 3% of total branded drug prescriptions in 2017.
Others have noticed a similar trend. Earlier this year, Iqvia Holdings released a report concluding that specialty treatments would be the only growth driver of branded drug spending in developed markets in 2018.
To create its report, BCBS extrapolated the company's database of more than 40 million commercially insured members to its insurance population of 88 million people. The report noted its finding do not include the impact of drug rebates, which are decided through negotiated contracts, not through prescription drug claims.