Increases in Cost, Utilization Drive Specialty Drug Spending Growth

As scrutiny continues to intensify over the drug pricing practices of many manufacturers, lawmakers and the general public are increasingly calling for increased oversight or legislation to spark a change that leads to lower medication costs.

Express Scripts recently released its 2017 Drug Trend Report, which showed the pharmacy benefit manager (PBM) reduced the rate of growth in per-person prescription drug spending for employers to 1.5%, according to the release.

The report noted that this is the lowest growth rate for Express Scripts since 1993; however, additional work is needed to ensure that all Americans are able to access affordable prescription drugs, according to the release.

"Express Scripts is committed to delivering innovative solutions that help our clients actively manage their pharmacy benefit to drive better outcomes and lower costs," Tim Wentworth, president, CEO, Express Scripts, said in the release. "While others offer vague promises of future savings, programs such as our SafeguardRx solutions delivered greater value for the money our clients and members spent on medications for costly conditions, such as diabetes and cancer. However, rising healthcare costs still burden too many consumers and businesses.

“Express Scripts pledges to continue working with policymakers on both sides of the aisle to advance a prescription drug affordability agenda that enhances our ability to reduce costs while improving access and quality."

The 1.5% increase was less than half of the spending rate increase seen in 2016, and nearly all of Express Scripts’ employer clients saw a reduction in their 2017 drug spending, according to the release.

Additionally, plans that adopted PBM solutions experienced a 1.2% decrease in year over year (YOY) spending.

The report indicated that cost-sharing remained stable in 2017, with members paying 14.3% of the costs for their treatments, which was the same rate as 2016, according to the release. Patients averaged an out-of-pocket cost of $11.24 for a 30-day prescription, a 12% increase from the previous year.

Spending on drugs for common diseases accounted for 59% of total spending and decreased 4% in 2017. This change was due to a unit cost reduction of 4.9%, which Express Scripts said demonstrates its ability to offset manufacturer price increases and steer patients towards effective, lower cost alternatives, according to the release.

Express Scripts also noted that specialty drug spending increased 11% YOY due to an 8% increase in utilization and a 3% increase in unit costs.

However, the PBM recently implemented outcomes-based programs that require payments for specialty drug treatment failures, according to the release.

Medicare and Medicaid plans were also observed to experience a slower YOY spending rate, increasing 2.3% and 3.7%, respectively.

Express Scripts was also able to reduce drug spending among Affordable Care Act plans due to a reduction in unit costs and a small uptick in utilization, according to the release.

"Our people and our solutions delivered record-low increases in spending, but our work is far from done," Wentworth said. "We know many still struggle to afford their medications, and we will continue to innovate — and advocate – for those people who are challenged by their out-of-pocket costs."