Super Spending: Caring for People Whose Needs are Greatest

Oct 3, 2017
In the most recent edition of our report, Super Spending: U.S. Trends in High-Cost Medication Use, we learned that nearly 0.3% of members in our analysis had annual medication costs at or greater than $50,000 in 2016, a 35% increase from 2014 when we last looked at this population in depth.

Statistically speaking, we’re all on a first-name basis with at least one person who relied on $50,000 or more worth of prescription medications last year. These are our relatives, our friends and our colleagues with complicated illnesses and special treatment needs. The population of people with extraordinarily high medications costs is becoming less rare at a very fast pace.

Despite this trend, our clients experienced low year-over-year increases in overall drug spending in 2016, demonstrating the effectiveness of our solutions to put medicine within reach. Effectively managing utilization and leveraging competition, we create the headroom necessary to afford more costly therapies.

A New Normal?

In the most recent edition of our report, Super Spending: U.S. Trends in High-Cost Medication Use, we learned that nearly 0.3% of members in our analysis had annual medication costs at or greater than $50,000 in 2016, a 35% increase from 2014 when we last looked at this population in depth.

At a fraction of a percent of all Americans, this population may seem small, but they accounted for 21.3% of total pharmacy costs. Extrapolating these data to the U.S. population, an estimated 870,000 Americans accounted for $80 billion of 2016 U.S. pharmacy spend.

Super Spending chart

This updated research also reveals a significant shift in what is driving spending among the population of people with high annual pharmacy costs. In 2014, compounded medications and new hepatitis C therapies drove much of the spending among people with $50,000 or more in annual pharmacy costs. In 2016, through our leadership, the cost of hepatitis C therapies declined and spending on compounded medications – which have safer and lower-cost alternatives – virtually disappeared from this population, and treatments for cancer, multiple sclerosis, inflammatory cystic fibrosis and other complex and rare diseases emerged as the more prominent conditions in this population.

In 2016, more than a quarter of the medication costs for patients reaching or exceeding the $50,000 threshold were for cancer treatments.

Bubble chart

Cost Sharing

People with annual pharmacy costs exceeding $50,000 were four times as common in Medicare than in an employer-sponsored, Medicaid or Exchange plan, with eight out of every 1,000 Medicare beneficiaries reaching that threshold in 2016. Plans covered nearly 98% of the costs for people whose prescription drug bills exceeded $50,000 in 2016, paying an average of $89,308 per person. For this population covered by Medicaid, 99.9% of the costs were covered in 2016.

Payers shouldered the majority of the cost burden, and kept members’ total out-of-pocket cost share relatively flat. People with $50,000 or more in drug costs were responsible for 2.4% of their total 2016 pharmacy costs. The average annual out-of-pocket cost for this population was $2,156 in 2016, which may not account for manufacturer or foundational payment assistance.

Keeping Medicine Within Reach

Part of the value we deliver at Express Scripts is identifying the challenges payers will face next so we can prepare to address them. This research tells us we need to get the most value out of every dollar spent, because the conditions that are most prevalent in this population – cancer, MS, inflammatory conditions, cystic fibrosis – are rare, complex and have limited therapy options.

We need to keep tightly managing pharmacy spend to make room for more expensive therapies. We also need responsible pricing for medications, more competition in classes with limited therapeutic options, and smarter policies so payers continue to care for all patients, and so patients can continue to afford the treatments they need.

Addressing the challenges of this population is the reason why we created Express Scripts SafeGuardRx®. Through these programs, we improve affordability and access to budget-busting medications through enhanced clinical care that improves outcomes, utilization management strategies that ensure appropriate use, and through strategic reimbursement strategies and pharmacy network arrangements.

For example:

  • Multiple Sclerosis Care Value ProgramSM (starting Jan. 2018) – Addresses high rates of discontinuation in this class and improves adherence with guaranteed early discontinuation reimbursement and best-in-class care.
  • Inflammatory Conditions Care Value ProgramSM – Manages this class at the indication level, enabling price competition among clinically equivalent medications, which helps control costs and ensures access to effective treatment.
  • Oncology Care Value Program® – Aligns drug costs with health outcomes and guarantees reimbursement for plans if patients discontinue therapy early due to low efficacy of a particular medication for their cancer or intolerable side effects.
  • Hepatitis Cure Value Program® – Delivers a 96% cure rate – nearly every hepatitis C patient who completes therapy sees an optimal outcome – at a substantially lower cost, which helps payers avoid rationing access.

We’re also exploring new reimbursement models to put super high-priced medications, like new gene-therapy treatments for cancer, within reach of those who need it.

Paying for the treatment of complex and rare conditions is the greatest challenge for organizations who know their plan members rely on them for life-saving therapy. The findings of this report underscore the importance of seizing every opportunity to improve affordability – for patients and for plans.

As new innovations come to market, it will require resourceful solutions to pay for them. At Express Scripts, we’re getting ahead of the new challenges created by medication breakthroughs to ensure plans and patients are ready for the promises of this ever-evolving pipeline.

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