Express Scripts: Specialty meds driving up US drug spend
- An estimated three out of every 1,000 Americans ring up a bill of more than $50,000 in annual prescription drug costs last year, according to a new analysis of health plan members published Tuesday by Express Scripts, one of the largest pharmacy benefit managers (PBM) in the U.S.
- The number of people who meet this threshold for high pharmaceutical expenditures has risen sharply, by 35%, since the PBM's last report on the trend in 2014. While numerically small, this group of patients accounted for more than 20% of total U.S. spending on prescription drugs in 2016, reports Express Scripts.
- Perhaps unsurprisingly, higher utilization of pricey specialty medicines for cancer, multiple sclerosis and rare diseases was the primary driver of spending among patients with annual pharmacy costs over $50,000. Yet that was a change from 2014, when new hepatitis C drugs and compounded medicines goosed spending.
Express Scripts' report highlights the outsize role specialty pharmaceuticals play in driving healthcare spending.
Nearly 96% of the plan members who cleared the $50,000 in annual spending threshold used specialty medicines, most notably cancer therapeutics. While the average annual cost of oncology drugs was lower than some other specialty categories, a quarter of all spending by this group was on cancer treatments.
Treatments for multiple sclerosis, cystic fibrosis, hepatitis C and hemophilia also factored heavily into spending.
This shift toward spending on specialty drugs, accelerated by the drop in cost for primary care medicines following the so-called patent cliff, is borne out by other data.
QuintilesIMS, a healthcare services giant, estimates that specialty medicines will account for 35% of global pharmaceutical spending by 2021, up from less than 20% a decade ago. Specialty medicines tend to be significantly more expensive than other drugs, meaning a smaller pool of patients is accounting for a larger and larger chunk of the nation's pharmacy bill.
"Over the past five years, 118 specialty treatment have come to market for [complex, chronic diseases], and the medication pipeline is rich, with about 25 new specialty drugs expected to receive approval each year for the next five years," wrote Glen Stettin, head of clinical, research and new solutions at Express Scripts, in the report.
That new crop of medicines could also include experimental gene therapies and other one-time, potentially curative treatments currently in pipelines across the industry. While those types of drugs may reduce lifetime spending for some diseases, they would also have a major impact on healthcare spending for niche patient populations.
Gene therapies approved in Europe were introduced at prices above half a million dollars. Novartis AG's recently approved CAR-T treatment Kyrmiah (tisagenlecleucel), while not considered a gene therapy by some, costs $475,000 for what is meant to be a one-time use.
Express Scripts also used its report as an opportunity to tout its role in managing drug spending. Patients with over $50,000 in annual drug costs were responsible for only 2.4% of their spending, the PBM found — although out-of-pocket spending hit a still-pricey average of $2,156 in 2016.
Express Scripts has rolled out a number of specialty drug programs aimed at boosting adherence rates in return for refunds or steeper discounts from drugmakers.
Growing payer power has had an impact in the broader industry, as well, helping keep a lid on annual net prices increases.
Data for the report was compiled from anonymized prescription drug claims from 26 million Americans covered by commercial insurance, Medicare, Medicaid or health exchanges. Over 134,000 de-indentified patients with high annual pharmacy costs were identified and used for Express Scripts' analysis, which took into account the effect of drugmaker rebates.
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