2015 was a record year for FDA approvals for cancer medications, with 19 new therapies approved to come to market. These new therapies have a positive effect on patient care, expanding treatment options and adding months and years of life.
However, the rich pipeline of high-cost cancer therapies, expanded indications, and longer survival rates for patients living with cancer had, and will continue to have, a profound impact on pharmacy spending.
Here’s a look at what drove spending on cancer medications in 2015, and the future for the class.
2015 Spending in Specialty Drug Classes – Commercially Insured
Payers spent nearly $50 per member per year (PMPY) on cancer therapies in 2015, a 23.7% increase from 2014 spending, due to increases in both unit cost and utilization. The average cost per prescription in the oncology therapy class in 2015 was $7,158.53.
Gleevec® (imatinib) and Revlimid® (lenalidomide) were responsible for a bulk of 2015 spending. These medications are the only two cancer therapies listed among the top ten costliest specialty therapies in 2015, and accounted for more than 22% of market share for oncology medications. Utilization trend for Gleevec was relatively flat between 2014 and 2015; however, the price of Gleevec, which began to face generic competition in February 2016, increased 19.3% in 2015.
Several other therapies in the class had substantial increases in utilization during 2015, including Imbruvica® (ibrutinib), capecitabine and Xtandi® (enzalutamide). Imbruvica’s approval for multiple types of cancer, effectiveness for hard-to-treat cancers, oral dosing and relatively mild side effects resulted in a 2015 utilization surge of 78.1%. Capecitabine, a generic to Genentech’s chemotherapy drug Xeloda®, rose 39.3%, following its launch in April 2014.
Increases in cost and utilization equally contributed to increases in PMPY spend among Medicare, Medicaid and Public Health Exchange plans. However, PMPY spend for oncology medications among Medicare plans was significantly higher that other plan types. In addition to other factors driving spend in this category, such as newer, more expensive therapies, the increase is possibly attributable to the status of cancer therapies as a protected drug class (PCD), which may lead manufacturers to keeps costs high and limits plans’ ability to manage utilization.
Medicare plans spent $275.73 PMPY on oncology medications for beneficiaries in 2015 – compared to $49.62 PMPY for commercial plans and $27.50 PMPY for Medicaid plans – a 31.8% increase from 2014. Revlimid and Gleevec were the second and third costliest specialty medications among Medicare plans in 2015.
Among the Medicaid population, PMPY spend increased 29.4% between 2014 and 2015. A 37.4% increase in the use of the generic capecitabine in 2015, along with a 96% decrease in use of the branded product, Xeloda, helped Medicaid managed care plans control spending in the class. Nonetheless, brands still dominate this class, holding eight of the top 10 cancer medications among Medicaid beneficiaries.
For the public health exchange population, PMPY spend for oncology drugs was $47.45, an increase of 37.2% between 2014 and 2015. While oncology is the fourth costliest specialty class in this population, the bulk of specialty spending is for HIV, hepatitis C and inflammatory conditions.
Forecast – Commercially Insured
Over the next three years, we anticipate spending in the oncology class will continue to increase at approximately 20% annually. The factors contributing to this increase include:
- High-cost therapies for targeted cancers.
- Long-term treatment for patients who survive initial cancer treatment and continue on maintenance therapy.
- Expanded indications for approved therapies.
- An increase in therapies available to treat multiple myeloma, a relatively uncommon, but frequently aggressive cancer of the blood-forming cells in bone marrow. Four of the 19 new cancer drugs that were FDA approved in 2015 are for treating multiple myeloma, which has an overall five-year survival rate under 50%.
Greater availability of oral and self-administered drugs will shift coverage from medical benefits to pharmacy benefits, which is good news for payers as it delivers greater transparency into the prescribing of these therapies, and allows them to better manage costs. Generic and biosimilar availability in the class, including the current generic availability for Gleevec, and the anticipated generic of Zytiga® (abiraterone) for prostate cancer in October 2018, will help create some headroom for newer, more expensive therapies.
Keeping Oncology Therapy Within Reach
When a novel medication offers a lifesaving cure, or a life-changing treatment, we want to ensure patients have access to that therapy. This is why Express Scripts is pioneering a value-based approach to cancer care, where our focus is not on price alone, but on the value that a particular therapy brings to patients.
This focus is the core of our Oncology Care Value Program® (OCV). While some oncology medications are indicated to treat multiple types of cancer, the cost of the treatment may not align with its outcomes in each type. Additionally, some patients may not respond to therapy. The OCV Program protects payers from unnecessary spending by ensuring patients are treated with the right drug for their condition, at the right price that reflects the benefit delivered.
We also are pioneering flexible and creative deals with pharmaceutical companies which are willing to share risk. One example is a recent contract we signed with AstraZeneca, in which AstraZeneca agrees to reimburse our clients the costs spent on the lung-cancer drug, Iressa® (gefitinib) if a patient does not respond to treatment and discontinues before a third prescription fill.
Obtaining the most value for a patient and a payer goes beyond innovative reimbursement strategies, though. Enhanced pharmacy care can greatly improve patient outcomes and improve spending increases. When medications are managed through our Accredo specialty pharmacy, our specialized pharmacists and nurses help patients remain adherent to reap the greatest health benefit. They also support physicians by providing clinical best practices, spotting potentially dangerous interactions and closing gaps in care.
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