Specialty Medications May 22, 2013

Specialty Drug Spending to Jump 67% by 2015

U.S. spending on specialty drugs – to treat chronic, complex diseases such as cancer, MS and RA – is projected to increase 67% by the end of 2015.
Tags
  • Attention Disorders
  • Cancer
  • Diabetes
  • Hepatitis C
  • Inflammatory Conditions
  • Mutiple Sclerosis

U.S. spending on specialty prescription drugs – those used to treat chronic, complex diseases such as cancer, multiple sclerosis and rheumatoid arthritis – is projected to increase 67% by the end of 2015, according to a forecast released today by Express Scripts.

As we see what’s on the horizon, it’s time for employers and health plans to act so they can continue to offer an affordable pharmacy benefit for their members. New specialty treatments are making a real difference in the lives of patients, but the very high cost of these drugs creates difficult decisions for plan sponsors on which medicines to cover.

3 of the 4 Costliest Prescription Therapy Classes Will Be Specialty Conditions

Specialty medicines are prescription drugs that require special handling, distribution and administration. Many specialty medicines are biologics that are delivered via an injection or an infusion and are used to treat chronic, complex diseases.

Prescription drug spending on 8 of the top 10 specialty therapy classes will continue to increase over the next 3 years. This is due to both the robust pipeline of new biologics and physicians delaying treatment of patients until the new drugs are on the market. By the end of 2015, we expect that cancer, multiple sclerosis and inflammatory conditions such as rheumatoid arthritis – all specialty conditions – each will command higher drug spending than any other therapy class except diabetes.

Anticipated Annual Changes in US Spending On Specialty Drugs

Hepatitis C drug spending likely will quadruple over the next three years, the largest percentage increase by far among therapy classes. By the end of 2015, spending on medications for Hepatitis C will exceed that of much more common conditions, including high blood pressure. This increase will be caused by new interferon-free medications expected to gain FDA-approval in 2014, as well as an increase in diagnoses related to new screening guidelines.

Plan sponsors can greatly improve the utilization trend and overall spending that we project over the next 3 years by taking control of the pharmacy benefit today. A recent study demonstrated that payers who implemented Express Scripts’ cost management and patient care programs achieved 50% lower increases in specialty drug spending than payers who didn’t. Importantly, these plan sponsors also saw higher medication adherence rates, which equates to better health outcomes for patients, while saving tens of millions of dollars.

Additionally, hepatitis C patients who received specialized clinical care from Express Scripts’ specialty pharmacy, Accredo, were 60% more likely to achieve optimal adherence levels, and had more concurrent therapy days – which leads to overall medical savings by curing the patient and avoiding further disease progression.

Also mitigating the rising cost of specialty medications would be an improved pathway for biosimilars, which are safe, effective, less-costly alternatives that could become available once the patents expire on currently marketed biologics. Express Scripts recently projected that the country would save $250 billion between 2014 and 2024 if the 11 most likely biosimilar candidates were launched in the U.S.

8 of the Top 10 Traditional Therapy Classes Will See Spending Decreases

According to the forecast, overall spending on traditional prescription drugs – mostly pills used to treat common conditions such as high cholesterol and depression – will decline 4% by the end of 2015, largely because of the availability of generic medications. Only two of the top 10 traditional therapy classes, diabetes and attention disorders, are likely to have spending increases over the next three years, but those increases will be significant.

Anticipated Annual Changes in US Spending On Traditional Drugs

Diabetes became the costliest prescription drug therapy class in 2011, and according to the new projections, it will continue to hold that distinction at least through 2015. Over the next three years, Express Scripts expects spending on diabetes medications to rise an additional 24% because of high prevalence and a robust pipeline of new therapies.

Despite the availability of generic equivalents for many attention disorder therapies, the data projects spending in the category to increase approximately 25% over the next three years, driven by increased utilization among middle-aged adults and wide geographic variation in diagnosis. Express Scripts research shows that prevalence, medication use and associated medical and pharmacy costs for attention disorders is highest in the South. However, the Northeast region of the U.S. experienced rapid growth in attention disorder diagnosis, and that region’s associated costs grew nearly 60% from 2008 to 2010.

In the absence of new therapies, to see such an increase in a traditional drug category suggests there is significant opportunity to better manage attention disorders. Express Scripts helps ensure that patients are using their therapy appropriately, and are deriving the maximum benefit. Our programs and specialist pharmacists close gaps in care, increase adherence and reduce abuse.

Drug Trend Forecast Methodology

The Express Scripts 3-year drug trend forecast outlines expected changes in overall prescription drug spending among the commercially insured population. As part of our analysis, we incorporate historical prescription drug cost and utilization trends from our pharmacy claims data, the pipeline for emerging therapies, anticipated patent expirations, and other clinical and demographic factors.

The complete forecast is available at DrugTrendReport.com.

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