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Drugs can be managed through the medical benefit or the pharmacy benefit
Specialty drug spending hits all-time high in 2012
National Reports-Specialty prescription drugs accounted for almost one-quarter of total U.S. drug costs within the pharmacy benefit last year, according to data released by Express Scripts in March. Costs hit an all-time high, even though fewer than 2% of the population is affected by diseases that require these medications.
In the Express Scripts 2012 Drug Trend Report, the costliest diseases in terms of prescription drug spend included inflammatory conditions such as rheumatoid arthritis, multiple sclerosis, cancer, and HIV. Hepatitis C accounted for a 33.7% increase in drug spend, making it the largest rise in drug spend than another other major therapy class-whether it be specialty or traditional.
Traditional prescription drug spending declined for the first time in more than 20 years, with a fall of 1.5% in 2012. This trend was attributed to increased utilization of lower cost generics for the blockbuster medications that came off patent last year. Research showed that physicians were more likely to prescribe generic drugs if physicians were younger, if they treat a large number of Medicare patients, or if they have practices located in the Midwest.
“The first-ever decrease in traditional drug spending is the latest chapter of an ongoing success story for our utilization management programs and for an increased interest in generic medications, home-delivery pharmacy, and more focused retail pharmacy networks,” says Glen Stettin, MD, Express Scripts senior vice president of clinical, research and new solutions.
Controlling specialty drug costs
To control specialty drug costs, Express Scripts conducted a study to analyze the costs of these expensive medications among 60 employer clients, representing more than 5 million Americans with pharmacy benefits. Employers were placed into three groups based on the type of cost-containment programs that they employed.
The first group was the unmanaged category in which the health plan allowed employees to go to any pharmacy for their specialty medications and no specialty utilization management program was used. The second or somewhat managed group included a health plan using a specialty pharmacy exclusively and one specialty utilization management program. The third or tightly managed group included a health plan that used a specialty pharmacy exclusively and multiple specialty utilization management programs.
Express Scripts found that tightly managed employer health plans had half the annual increase in specialty drug spending per member per year (13.6%) than the unmanaged group and almost one-third the increase of the average annual projected specialty drug costs.
Mary Dorholt, vice president and clinical practice lead of specialty for Express Scripts, says there is a need to manage specialty drugs that come under the medical benefit as these drugs make up 47% of the total specialty drug spend. Some of these drugs can be migrated to the pharmacy benefit for dispensing where traditional pharmacy benefit management techniques can be employed.
Express Scripts merged with Medco Health Solutions last year, making it the largest PBM, covering 100 million lives or 40% of the market.