20/20 Vision: Researching Healthcare's Future

Apr 19, 2013
Express Scripts researchers look back at the last 20 years of developments within the pharmacy benefit and provide predictions for the next 20.

Despite what your grandmother may tell you, curiosity isn’t always a bad thing. Without it, we wouldn’t have the life-saving medications we do today, or the technology that keeps us informed and entertained.

Or, in our case, the information that fuels the benefit design decisions we make. At Express Scripts, we’re a mighty curious bunch. We knew that with all of the data points associated with one prescription, we had a lot of information that we could use to better understand how patients were using their medications, and how that use was affecting cost and outcomes. We first started analyzing prescription claims data in 1993, and that information, combined with data from the three following years, was included in the company’s first Drug Trend Report in 1997.

That's 20 years of drug trend research.

When we took firm positions on formulary management, generic substitution and retail networks, the message was loud and clear: We would settle for nothing less than higher quality and lower costs. Our clients supported our position because it was firmly planted in years of trend data, and each of those milestones was a breakthrough event in the history of the pharmacy benefit.

The Early Years

In our first Drug Trend Report, the rising cost of prescription medications were a major concern. Generics were becoming more prevalent thanks to the Hatch-Waxman Act, but advances in the understanding of disease mechanisms led to rapid development of new medications. It was a golden era for pharma, with blockbuster medications for gastro-intestinal problems, allergies, depression and cholesterol driving up trend.

In fact, three of those four therapy categories continued to lead traditional trend for several years, when generic competition, and in the case of allergy medications, OTC availability, took them out of the top 3. Diabetes joined the leaders in 2010 – one of the main consequences of our nation’s obesity epidemic – and in 2012 became the leading driver of traditional spend.

The Catalyst for the Changes and Challenges We Have Today

In 2003, overall drug trend peaked and was on the decline. But the new trend emerging was high-cost, high-touch specialty medications. That year also marked the birth of the Medicare Part D program, which would provide us with a whole new group of behaviors and trends to research and manage. Both of these events were the catalyst for a shift in drug spending and healthcare that represent some of our biggest challenges today.

Reforming Care

By 2010, specialty drug spend was at 19.4%, driven primarily by increased costs. The most expensive single drugs – with an average cost per prescription of $3,590.94 – were those used to treat pulmonary hypertension. The increasing proportion of total drug trend attributable to specialty drugs rose dramatically, to 13.6% in 2010, up from 8.1% in 2006.

After heated national debate, the Patient Protection and Affordable Care Act was passed. When fully implemented in 2014, the legislation will dramatically alter the way that healthcare and prescription drugs are delivered and used.

What the Past 20 Years Foreshadows for the Next 20

Looking back in time, we can see clearly the actions we need to take to address our challenges in the years to come. Continuing to apply the traditional management tools we developed over the past 20 years will continue to cut costs and ensure quality care. But we still have some work to do:

  1. Activate Good Intentions. With more people having access to care, patients will have to do their part in order to get the full benefit. Choice architecture and associated strategies hold significant potential for improving outcomes by activating the good intentions in us all without relying on ongoing engagement. As a tenet of Health Decision Science℠, Express Scripts applies the behavioral sciences to healthcare to create and offer solutions that make the healthiest choice the easy choice.

  2. Support Biosimilars and the New Patent Cliff. The Affordable Care Act created a pathway to encourage development of interchangeable generic biological products, which should encourage competition and lower drug costs as it did with many small molecule, synthetic drugs. Critics of biosimilars are raising the same safety concerns that critics of generic synthetic drugs raised before generic availability was prevalent. If the pathway is accelerated, the cycle of high-cost brands going off patent provides opportunities for innovators, clinicians and drug manufacturers to work together to provide lower-cost, clinically effective prescription drug solutions for people facing life-threatening conditions.

  3. Leverage Technology. From a healthcare system standpoint, continuous connectivity with a health provider network or database of information will not only empower individuals, but provide proof to health plans and plan sponsors that their constituents are taking personal responsibility for their own health. Emerging technology is poised to provide individualized opportunities that could speed diagnosis and enable proper treatment sooner. Given the ability to more carefully monitor a patient’s health status, treatment plans and patient support services can be modified in real-time to meet the needs of the patient.

Curiosity: It’s a Good Thing

As someone who has spent her days and nights surrounded by data and statistics, I know how powerful data can be in helping us figure out essentially anything. Data can inform us about our past and help us see things that aren’t always obvious to us in the moment. Often, through data, we learn things about our behavior and our actions that seem to go against conventional wisdom. And it is in these instances that data can help us innovate, forecast and tackle even greater challenges that lie ahead.

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