Every year Express Scripts publishes and analysis spending on prescripotion drugs in the US.
Rx Spending: What Goes Down, May Go Back Up // Pharmalot.
Here are some of the factoids for 2012:
- Spending by private health insurers dropped 1.5%
- Spending on brand name medications rose 12.5%
- Generic drug prices fell a whopping 24%
- Spending on specialty meidcations rose a whopping 18.4%
- Overall this resulted in a 2.7% increase in spending on drugs
The 2.7% figure doesn't sound so bad and in fact is consistent with the previous year - but what is more worrying to 3rd party payers is that specialty drugs that account for only 2% of the populaion accounted for 24.5% of the total spending. This is the highest percentage on record -- and more specialty medicines are on their way.
Here's some more facts just for the specialty meds catagory:
- Spending on RA drugs rose 23%
- Spending on cancer meds increased 25.9%
- Spending on Hep C drugs went up 33.7% -- highest for an therapeutic area
- Spending on Hep C drugs (according to Express Scripts) is expected to increase another 32.3% this year and an incredible 56.3% in 2014)
- Diabetes is the category where te most money is spent and it went up 11% in 2012
What's really troublesome to payers is that more and more specialty medicines are expected to be introduced in the next several years. Last year, 39 new drugs were approved by FDA including 22 specialty drugs, many of which cost more than $10,000 per month to utilize. Since, Big Pharma in concentrating its efforts on producing more of these drugs, the payers are worried how they will pay and control costs.
Personally, I think this will be another economic and political driver to figure out how to make biosimilars a bigger part of the mix in te US to offer price competition in some of this specialty categories -- like RA for example. But in the real short term, we can expect more new drugs in specialty categories and more spending. An alternative would be to adopt models to restrict access to newer drugs pending trial of older cheaper ones first -- but i don't think that will (or should) happen across the board. I do think a biosimilar model that works in the US needs to be developed. See Fierce Biotech too.
Posted by Bruce Lehr Mar 5th 2012.
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