2012 Drug Trend Report

Mar 5, 2013
The Express Scripts 2012 Drug Trend Report shows that, for the first time in more than 20 years, U.S. spending on traditional prescription drugs declined.

Released today, the Express Scripts 2012 Drug Trend Report quantifies annual changes in utilization, unit costs and overall prescription-drug spending, based on Express Scripts claims data for 100 million Americans.

U.S. Spending on Traditional Prescription Drugs Fell in 2012 for First Time on Record

For the first time in more than 20 years, there was a decrease in 2012 U.S. spending on traditional prescription drugs – primarily pills people take to treat more common diseases such as high cholesterol and high blood pressure.

Among the country’s commercially insured population, total spending on traditional prescription drugs fell 1.5% in 2012. 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. Combined, total drug trend for the year was +2.7%.

The first-ever decrease in traditional drug spending demonstrates the success of Express Scripts’ utilization management programs and an increased interest in generic medications, home delivery pharmacy and more focused retail pharmacy networks.

Last year’s “patent cliff" ushered in lower-cost generic alternatives for many blockbuster medications. That led to an increase in utilization for eight of the top 10 traditional therapy classes, while unit costs decreased in seven of those classes.

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.

The Increasing Challenge of Specialty Prescription-Drug Spending

Specialty medications often require specialized handling or administration, frequent dosing adjustments, and intensive clinical monitoring and patient assistance. While affecting less than 2% of the general population, specialty conditions in 2012 accounted for 24.5% of the country’s total drug spend within the pharmacy benefit, the highest percentage on record.

Four of the country’s 15 costliest diseases in drug spend – inflammatory conditions, multiple sclerosis, cancer and HIV – are treated with specialty medications.

Inflammatory conditions such as rheumatoid arthritis, the costliest specialty category, saw spending increase an additional 23%. This increase was driven by both a 9% increase in utilization and a 14% increase in unit cost. At 33.7%, hepatitis C experienced a larger 2012 increase in drug spend than any other major therapy class – traditional or specialty. The increase is due almost entirely to two new drugs introduced in May 2011.

Utilization and costs for cancer medications increased by 3.4% and 22.3%, respectively. Much of the increase in costs is driven by new drugs developed to 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.

Widening Price Gap in Brand-Name and Generic Medications

According to the Express Scripts Prescription Price Index, prices on a market basket of the most highly utilized brand-name medications increased 12.5% in 2012, far outpacing the Consumer Price Index’s 2012 inflation of 1.7%. During the same time frame, prices of generic medications 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.

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