Express Scripts held U.S. drug spending increase to 3.8% in 2016.
In a year where the issue of high drug prices was No. 1 on the list of payer and policy maker concerns, the data show that our solutions protected our clients and patients. By practicing pharmacy smarter, we uniquely make medicine more affordable and accessible for patients. We do this by driving down drug prices and ensuring appropriate use of clinically-proven medicine, while helping employers remain competitive.
Between 2015 and 2016, nearly half of employers whose pharmacy benefits were managed by Express Scripts saw a year-over-year increase in per-person spending of less than 3.7%, and one-third of employers had a decrease in pharmacy spending.
Our programs ensure patient access, minimize waste and maximize savings. On average, employers who managed their pharmacy benefits more tightly with these programs held their 2016 increase in drug spending to 2.6% – significantly lower than less tightly managed pharmacy plans. If all pharmacy plans across the country tightly managed their benefit, the U.S. could have saved an additional $5.8 billion on prescription drugs last year, while maintaining a clinically sound and affordable pharmacy benefit for American patients.
For the second consecutive year, patients of pharmacy plans managed by Express Scripts saw their total share of pharmacy costs decrease, despite using more prescriptions. Patients paid 14.6% of the total cost of prescription medication in 2016, compared to 14.8% in 2015, as plan management programs enabled many employers to hold the line on copayments and deductibles. The average patient copay for a 30-day prescription was $11.34 in 2016, roughly a dime more than in 2015.
Effectively Combatting Price Inflation
Commercial plans managed by Express Scripts experienced only a 2.5% increase in unit costs across all prescription medications – nearly 22% lower than 2015, and more than 60% lower than the increase in prices, net of rebates, recently reported by major drug makers.
Rebates do not raise drug prices, drug makers do. As demonstrated by lower overall and unit cost trend in 2016, Express Scripts is effective in protecting employers from the effects of inflation by using our focused size and scale to secure significant rebates, which are returned to employers to reduce the overall cost of their pharmacy benefit.
Express Scripts’ Prescription Price Index shows continued inflation in the price of medications, with the average list price of the most commonly used brand drugs increasing nearly 11% in 2016. From the base price of $100.00 set in January 2008, in December 2016 prices for the most commonly used brand medications increased to $307.86 (in 2008 dollars), a nearly 208% increase. In contrast, price inflation for the most commonly used household goods is just 14% between 2008 and 2016. Prices for the most commonly used generic medications declined 8.7% in 2016.
Bending the Curve on Specialty Drug Spending
Specialty drug spending increased 13.3% in 2016 – the lowest trend reported since we first included specialty medications in our annual analysis in 2003 – and significantly less than the 17.8% trend in 2015. Specialty drugs accounted for more than a third of total spending in 2016.
Medications that treat inflammatory conditions and diabetes remain the costliest therapy classes. One of every five dollars spent on prescription drugs was for medication to treat an inflammatory condition or diabetes.
Employers paid, on average, $3587.83 per prescription for a medication to treat an inflammatory condition, such as rheumatoid arthritis. Humira® (adalimumab) and Enbrel® (etanercept) were major trend drivers for the class, with unit cost increases between 10 and 18%. Despite having more than 15 available therapies in the class, these two medications accounted for approximately 70% of the market share in 2016. Biosimilar competition in this class could significantly ease spending for employers; however delays in biosimilar availability have limited payers’ ability to achieve much relief.
Spending on diabetes medications increased 19.4% in 2016, driven by a 14.1% increase in unit cost. Total spending on insulins – which account for 40% of all diabetes spending – increased nearly 10% between 2015 and 2016. The average patient copay for insulin was $36.69 per prescription (adjusted for difference in days’ supply), just $1.63 more than 2015.
In 2016, spending on oncology medications increased nearly 22%, making it the third-costliest class at $60.70 per member per year. Despite savings from generics, including imatinib, the generic for Gleevec®, unit costs for oral oncology medications increased 9.6% in 2016. List prices for oral oncology medications, which are not rebated or discounted to any significant extent, have doubled between 2011 and 2016, from $20 per unit to $40 per unit.
The trends observed in these three leading therapy classes demonstrate the need for our industry leading SafeGuardRxSM solutions. Recent enhancements to our Oncology Care Value® program, and the launches of our Inflammatory Conditions and Diabetes Care Value programs, will help employers better manage spending in these areas through novel, indication-based reimbursement approaches, inflation protection and distinctive clinical care that has proven success with improving patient outcomes.
Other noteworthy trends:
- Compound Medications: Plans that implemented Express Scripts’ safeguards against unnecessary and potentially unsafe use of compounded medications in 2015 and 2016 saved $2 billion and eliminated 95% of spending for the class.
- Pain Medications: One in five people filled a prescription for a pain medication in 2016. Despite a 95% generic fill rate for this class of drugs, spending was driven by just two brand-name medications: Lyrica® (pregabalin) and OxyContin® (oxycodone). Pain medications are the fifth costliest class of drugs.
- In 2016, contraceptives and medications for depression entered the top 15 classes of drugs driving spending. Increased utilization for both classes contributed most to the increased spending.
Savings and Access
In 2016, the Express Scripts National Preferred Formulary® preserved patient access to medication while saving plans $1.3 billion from drug manufacturers who understand that in the absence of competitive pricing, their drugs may be excluded from coverage under clients’ plans. Of approximately 4,000 available drugs, the NPF excluded just 80 drugs in 2016, meaning that 99.5% of patients in plans using the Express Scripts National Preferred Formulary had no change in their covered medication. The Express Scripts National Preferred Formulary is projected to deliver an additional $1.8 billion in savings in 2017, for a cumulative savings of $4.9 billion since 2014.
Delivering Value Beyond
In 2016, spending for hepatitis C medications decreased 34% due to decreased unit costs and use. Viekira Pak™ (ombitasvir/paritaprevir/ritonavir with dasabuvir) and Harvoni® (ledipasvir/sofosbuvir) remained the two most-utilized therapies, capturing 43% of the market share. However, additional competition resulted in a unit cost decline of 6.7% in the class.
Spending for the hepatitis C therapy class is forecast to decline an average 28.8% annually between 2017 and 2019.
This year, our Hepatitis Cure Value Program® includes both Viekira Pak/XR and Harvoni as preferred products, leveraging the success of the program to negotiate better pricing for Harvoni and expand treatment options for patients and physicians in 2017.
Since this program began in 2015, we’ve helped more than 50,000 patients gain access to curative therapy across the Express Scripts customer base, while continuing to lower the cost of treatment by nearly 50% and delivering a cure rate greater than 95%.
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