Drug Trend Report Predicts Continued Rise of Specialty Medications

The cost of specialty drugs is driving increases in overall unit cost, according to an annual Catamaran Corporation report.

Spending on specialty medications saw a large increase in 2013, a trend that is predicted to continue in 2014 and well into the future, according to an analysis by the Catamaran Corporation in its annual Informed Trends report.

Catamaran, which provides pharmacy benefit management services and technology, noted in its 2013 Healthcare HD - The Power of High Definition report that specialty medications accounted for 23.5% of total drug spending in 2013 while only 2.1% of members took specialty medications. The average cost of a specialty prescription in 2013 was nearly $2900, a 17% increase compared with 2012, and specialty drug spending shows no signs of slowing down in 2014, according to Sumit Dutta, MD, MBA, senior vice president and chief medical officer at Catamaran.

“I actually see [specialty spending] going up, and one factor for that is we saw a lot of patients warehoused while waiting for new hepatitis C drugs to come out,” Dr. Dutta said in an interview with Specialty Pharmacy Times. “We’ve seen brisk prescribing of [new hepatitis C medication sofosbuvir] in the first quarter. We’ll see competition for that come out in 2014, and the trend will keep going up.”

The hepatitis C class saw a 42.5% drop in utilization in 2013; utilization of telaprevir (Incivek) and boceprevir (Victrelis) dropped by 56% and 24% last year, respectively. The report notes that the current annual cost of treating hepatitis C is approximately $6.5 billion, which is projected to increase to $9.1 billion by 2024.

The projected sales total for sofosbuvir (Sovaldi) for the first quarter of 2014 is $1.3 billion, with an annual projected sales figure of $5 billion.

“The thing about [sofosbuvir] is that it has better effectiveness and less side effects,” Dr. Dutta said. “We will work with our clients to ensure that it’s appropriately used in places where it can add value. It’s important to measure whether the price point the manufacturer has come out with for the product is justifiable relative to improved outcomes over time.”

While US consumers await the availability of cheaper biosimilar versions of some specialty medications, Dr. Dutta, who said he is a proponent of biosimilars, cautioned that the obstacles to cost relief from the drugs are still significant.

“If they were interchangeable products that could be interchanged without any prescription communication with the physician, as generics are, then we would see a tremendous rate of transition from branded products to the generic equivalent within a 6-month timeframe,” he said. “With biosimilars, on the other hand, doctors have to prescribe the biosimilar agent, and that hurdle alone will lead to a significantly smaller rate of conversion to biosimilars.”

The high price tag for specialty medications is predicted to continue driving overall drug spending this year, according to Catamaran. Last year, there was an overall drug unit cost increase of 4.5%, primarily due to specialty medications, which were responsible for 48% of the overall unit cost increase.

As with 2013, the Catamaran trend forecast predicts that specialty medications will continue to power overall drug spending in the future.

“We’re looking at a small number of members that drive a large percentage of the cost, which is driven by the high cost of specialty medications,” Dr. Dutta said. “We will continue to see the pricing of traditional medications go down as generics continue to rise. At some point we will see generic dispensing rates rise above 90%, with only 10% of brands on the traditional side. Then we will see a vast number of patients in the US on prescription therapy, and that vast number of people will be driving half of the drug costs, with the small number of people on specialty medications driving the other half.”