Top 3 Things You’ll Learn
- Top market drivers causing the rise in the prescription drug spending
- High-impact prescription drug cost categories to watch
- How the new laws apply to you
It’s no secret that pharmacy is one of the fastest growing and most volatile components of healthcare spend – and it shows no signs of slowing down soon. This ever-changing market can be puzzling to navigate, and we want to help you and your self-funded employer clients stay ahead. As we close out the year, we are reviewing the top trends in pharmacy benefits that we were watching in 2019:
The Relentless Rise of Specialty Spend
Did you know that ten years ago, specialty medications were a mere blip on the pharmacy spend radar? It’s hard to imagine that with 0.3% utilization in 2008, specialty drugs accounted for only 13% of overall drug spend. Compare that to 2018, when specialty utilization increased to 1.1% of overall utilization but accounted for 40.2% of drug spend. The result—a whopping 209% increase over the past ten years.
This historic shift can be attributed to the greater number of prescription medications coming to market for rare conditions, high-cost therapies, and drug manufacturer price increases. The surge also forced self-funded employers to manage their pharmacy benefit budgets more effectively. A foundational clinical management strategy driven by detailed data analytics is critical to help your clients create a more sustainable prescription drug benefit – one that ensures clinically appropriate utilization and that they aren’t overpaying for prescription drugs.
It’s a fact that #specialtyRx now accounts for less than 2% of overall utilization and more than 40% of drug spend for most pharmacy benefit plans — a 209% increase over the past 10 years. #drugcosts
Prescription Drug Pipeline
In 2008, the average cost of a brand drug was $176.01, with most drugs being used by large patient populations (i.e. statins to treat cholesterol). You probably wouldn’t have guessed then that the average brand drug would cost $4,166 in 2018, with most high-cost drugs used by small populations (i.e. Luxturna to treat an inherited form of vision loss). With 57 new drug applications approved by the FDA in 2018, and 71 drug patents expiring by the end of 2021, we expect to see costs for both brand-name drugs and specialty medications continue to grow at an unprecedented pace.
Our question now is whether these new prescription drug therapies are worth the high costs we’re seeing. Here are some of the high-impact drug categories you will see in 2019:
- A new gene therapy, Luxturna®, now treats children and adults with an inherited form of vision loss that may result in blindness. Luxturna costs $850,000 to treat both eyes.
- CAR T-cell therapy is a form of immunotherapy used in certain cancer treatments. CAR T-cell therapy approved drugs can range anywhere from $475,000 per infusion treatment to $1.5 million per patient. Despite the dozens of new cancer treatments that have been introduced over the past few years, costs remain high.
- New specialty drugs for autoimmune conditions (i.e. rheumatoid arthritis, multiple sclerosis, Crohn’s disease) remain on the pipeline horizon, each costing thousands of dollars per month.
- New therapies for common conditions such as migraines, asthma, and peanut allergy will contribute to increased spending as well.
The Bottom Line…
How will these pharmacy market forces affect your business and your self-funded employer clients? Are you and your clients prepared for the changes ahead? If you aren’t sure how to answer these questions or don’t know where to begin, check out our Definitive Guide to Optimizing Pharmacy Benefits for contract and clinical management best practices to help achieve maximum value for your clients’ pharmacy plans.