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Report: Reduction seen in managed care organization drug trend


Managed care organizations (MCOs) experienced a 1.7% drug overall trend, a 10.5% reduction from 2012 to 2013, according to Catamaran’s 2013 Drug Trend data. In 2012, MCO trend was 1.9%.

Dr Dutta

Managed care organizations (MCOs) experienced a 1.7% overall drug trend, a 10.5% reduction from 2012 to 2013, according to Catamaran’s 2013 Drug Trend data. In 2012, MCO trend was 1.9%.

Contributors to this overall trend were -0.2% utilization trend and favorable drug mix of -3.2%, which helped offset a unit cost increase of 4.4%. Top drugs by cost such as Singulair, Actos, Plavix, Crestor, Diovan HCT, Tricor, and Lipitor all experienced decline in trend as a result of utilization decreases, according to the report.

“Most of these drugs experienced close to 100% utilization decrease as a result of generic alternatives that have come to market in the last year and a half,” said Sumit Dutta, MD, senior vice president and chief medical officer at Catamaran.

The -3.2% drug mix is what really helped keep MCO overall trend low this year, demonstrating the importance of generic drug utilization, according to Dr Dutta.

“It’s imperative for managed care decision-makers to optimize their plan design to motivate patients to engage in their health, be adherent to their medications, and use the most cost-effective drugs,” he says. “Use of more cost-effective drugs drives a negative value for drug mix, either increased use of generics or lower-cost brands. Negative trend is a good thing, the more negative the drug trend, the greater the proportion of lower cost drugs and generics being used.”

The generic market continued to expand when some of the world’s best-selling drugs such as Lidoderm and Niaspan lost patent protections in 2013.

Market competition from generic drugs is saving public and private healthcare payers more than $1 billion every other day, according to the IMS Institute.


“Managed care executives need to leverage this to their benefit as much as possible-ensure benefit designs are created which promote generic utilization, that prescription are appropriate, and that utilization management programs are in place. Following the generic launch pipeline and implementing formulary management strategies that drives generic use will further drive rapid adoption of new generics to the market,” Dr Dutta says.  

Furthermore, in order to maintain a competitive advantage, MCOs need to leverage the power of medication therapy to manage chronic diseases and help minimize premiums, according to Dr. Dutta.

“MCOs need partners with inherent flexibility and the agility to scale and respond quickly, as client needs change and program requirements increase in complexity,” he says. “As a result of the [Affordable Care Act], more individuals will have access to healthcare through exchanges and marketing efforts will become more consumer-centric. Consumers will choose plans that offer the best value, giving MCOs an opportunity to differentiate with leading-edge tools and technology to engage members in managing their health. 

“Better healthcare outcomes are achieved by coordinating care through clinical pharmacy programs. These programs help ensure that MCOs are realizing the full benefit of the drugs they cover, Dr. Dutta says.

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