Traditional Prescription Drug Spending Drops

In 2012, U.S. spending on traditional prescription drugs fell for the first time in more than 20 years, according to data by Express Scripts. Traditional prescription drug spending fell 1.5% in 2012 among the country’s commercially insured population. However, this decline was offset by an 18.4% increase in spending on specialty medications to treat more complex diseases, such as rheumatoid arthritis, cancer, and hepatitis C.

Glen Stettin, MD of Express Scripts said that the drop in traditional drug spending is due to the success of utilization management programs and a growing interest in generic medications, home delivery pharmacies, and more focused retail pharmacy networks. Stettin added, “Effective management solutions and increased drug competition are necessary…to rein in specialty drug costs…and increased drug competition, in the form of biosimilars, is necessary to offer more affordable medication.” Last year’s patent cliff ushered in lower-cost generic alternatives for many blockbuster medications and utilization increased for eight of the top 10 traditional therapy classes, while unit costs decreased in seven.

For the second consecutive year, the country spent more on prescription drugs for diabetes than for any other therapy class. Diabetes drug spending increased 11% in 2012, driven, in part, by unit cost increases for popular insulins. Spending on medications to treat attention disorders increased 14.2% in 2012. Utilization increased 8.8%, due largely to an increased number of adult patients. Unit costs increased 5.4% as a result of a 2012 shortage of active ingredients contained in many of the medications in this class.

While affecting fewer than 2% of the general population, specialty conditions in 2012 accounted for 24.5% of pharmacy benefit drug spending  — the highest percentage on record. Specialty medications often require specialized handling, frequent dosing adjustments, and intensive clinical monitoring and patient assistance. The costliest specialty category was for inflammatory conditions such as rheumatoid arthritis; drug spending increased 23%. This increase was driven by a 9% increase in utilization and a 14% increase in unit costs.

There was a 33.7% increase in hepatitis C spending, which is a bigger increase than any other major traditional or specialty therapy class. The increase is due almost entirely to two new drugs being introduced in May 2011. Express Scripts expects total spending on hepatitis C medications to increase 32.3% in 2013 and another 56.3% in 2014.

For cancer medications, utilization increased 3.4% and costs increased 22.3%. Driving much of the cost increases are new drugs that treat unique genetic profiles — a trend that increased in recent years.

In 2012, the Food and Drug Administration approved 22 new specialty drugs, many of which will cost more than $10,000 per month of treatment.

Doctors who are more likely to prescribe generic medications to Medicare patients are younger, see a large number of Medicare patients, and practice in Midwestern states such as Ohio, Illinois, and Michigan.

As more Americans seek treatment for drug and alcohol abuse, chemical dependence is now among the top 10 traditional therapy classes when it comes to Medicaid drug spending. At 24.3% in 2012, chemical dependence drugs account for the largest percentage increase in Medicaid drug spending.

Utilization of cancer medications increased 11.8% for Medicare patients in 2012, contributing to a 32.8% spending increase for this population. Medicare patients increased utilization of hepatitis C medications by 63.5% in 2012. Infection rates for the virus are more prevalent among patients born 1945 to 1965.

Medicaid spends more on asthma medication than on any other single condition. Total asthma spending increased 6.2%, driven largely by increased utilization.

Prices for the most highly utilized brand-name medications increased 12.5% in 2012, far outpacing the general inflation rate of 1.7%. During the same period, generic medication prices declined 24%. This 36.5 percentage point net inflationary effect is the largest single-year widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008. The full report is available atwww.DrugTrendReport.com.

Last Updated 8/2/2017

Arch Apple Financial Services | Individual & Family Health Plans, Affordable Care California, Group Medical Insurance, California Health Insurance Exchange Marketplace, Medicare Supplements, HMO & PPO Health Care Plans, Long Term Care & Disability Insurance, Life Insurance, Dental Insurance, Vision Insurance, Employee Benefits, Affordable Care Act Assistance, Health Benefits Exchange, Buy Health Insurance, Health Care Reform Plans, Insurance Agency, Westminster, Costa Mesa, Huntington Beach, Fountain Valley, Irvine, Santa Ana, Tustin, Aliso Viejo, Laguna Hills, Laguna Beach, Laguna Woods, Long Beach, Orange, Tustin Foothills, Seal Beach, Anaheim, Newport Beach, Yorba Linda, Placentia, Brea, La Habra, Orange County CA

12312 Pentagon Street - Garden Grove, CA 92841-3327 - Tel: 714.638.0853 - 800.731.2590
Email:
Jay@ArchApple.com
Copyright @ 2015 - Website Design and Search Engine Optimization by Blitz Mogul