Brand and specialty drugs causing increased drug spending
Thursday, March 31, 2016
Most drugmakers have come to realize specialty drugs are where they can achieve the most money, and they have been seeking ways to take advantage of this in recent years. As a result, the associated costs of drugs in the United States have become a major topic of discussion, particularly as they relate to escalating drug prices that can be felt by consumers or payers.
The amount of money spent on both brand-name drugs and specialty drugs continued to increase from 2011 to 2015, according to the Express Scripts 2015 Drug Trend Report. There was an observed spike in brand-name drugs going up by as much as 16.2 percent, with a third of these drugs increasing by more than 20 percent, and specialty drugs increasing by 37 percent.
Drug companies are stocking up with their brand buyouts and seeking to focus on high-price drugs, which come as a result of the increased presence of generics on the market. Specialty drugs also carry high prices and can generally get to the market place quickly because of their smaller clinical trials.
According to Express Scripts, patients are spending more and more on their prescription drugs, and the increase of 8.6 percent in 2015 was one of the driving forces behind prescription utilization in the U.S. Individuals who were previously not insured or underinsured and are now beneficiaries thanks to the Affordable Care Act are seeking treatment for their medical conditions and thus are using more brand-name or specialty drugs to manage their diagnoses.
Therapeutic drugs for diabetes and hepatitis C contributed to the increase in utilization and drug spending, but this was offset by a drop in the spending on compounded medications. Additionally, the goal of Express Scripts is to drive down specialty drug spending by promoting the use of programs that include prior authorization and step therapy to better assess the appropriateness and potential initiation of a drug.
The forecast for total drug spending for payments is projected to increase as well between 2016 and 2018, and this growth can be pervasive among other drugs for cancer, multiple sclerosis or inflammatory conditions. A good example of a therapy drug class that has experienced a unit cost increase between 2014 and 2015 are the diabetes medications.
The pre-filled insulin pen (Levemir) and newer insulin therapies such as Trulicity (dulaglutide) and Synjardy (empagliflozin/metformin) — which both launched in 2015 — have been part of this observed growth. On the other hand, Lantus (insulin glargine) — a top diabetes drug — has experienced a decrease by 13.7 percent in unit cost due to the rise and availability of the newer and expensive treatments.
Over time, strategies that seek to focus on cost containment and an ongoing assessment of the necessity for a particular brand or specialty can serve as a method for monitoring use and achieving better control over drug prices.
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