Specialty pharmacy drives drug spend

July 1, 2008

Drug trend for 2007 was 2%, the lowest year-over-year trend since Medco began tracking it in 1999, according to the company. While the drug cost trend is small in terms of overall healthcare dollars spent, it was at one time rising at a rate more than double the rate of inflation, according to Lon Castle, MD, senior director, department of medical and analytical affairs at Medco.

"Drug trend will be affected by the number of new and expensive biologics coming to market, especially in the oncology category," Dr. Castle says. "We believe that drug trend will rise slightly over the next few years due to specialty drugs and the lack of a biogeneric pathway to date."

DIABETES ON THE RISE

"What's even more troubling is the fact that we're seeing type 2 diabetes in children growing at an alarming rate," Dr. Castle says. "This is compounded by the fact that the unit costs of treatment increased sharply at 9.5%, led by use of newer products with faster onsets of action or more consistent blood levels."

Experts believe the biggest drivers will be in specialty pharmacy.

"Biologics and protein-synthesized drugs account for approximately 10% of the current prescriptions, however, [they] are approximately 20% to 23% of the budgets," says Michael Webster, executive vice president and a senior partner of marketer Access Communications.

SPENDING DECLINE

Generics are said to be responsible for the spending decline for lipid-lowering drugs, antidepressants and non-narcotic pain relievers. Generic entrants have replaced previous brand name drugs in these categories in 2007, Webster says.

"We are now seeing a full one-year affect of Pravachol and Zocor going generic," Dr. Castle says. "In 2007, lipid-lowering drugs became the leading trend reducer, despite continued rapid utilization growth-5.9%."

Antidepressant spending declined sharply in 2007 with the generic conversions of two blockbuster drugs, Zoloft and Wellbutrin XL. Spending for non-narcotic pain relievers dropped significantly, again due to the full-year impact of generic Mobic in July 2006.

Webster adds that it's not always about managing cost in a silo, however.

MCOs would be better off with an integrated approach by lowering barriers to care in chronic conditions, via low or no copays, to allow for better compliance and adherence. They should also provide case management for patients who have high-cost conditions, he says.