Drug utilization declined slightly in 2009, while prices for brand drugs jumped eight percent. And specialty drugs, although a tiny portion of the total number of scripts, drove sixty percent of the overall growth in drug costs.
The net? Medco’s overall drug spend grew 3.3 percent in 2008. Removing specialty drugs from the calculation results in a 1.3% trend rate.
The decline in utilization appears to be driven in large part by two factors – drugs that were only available by prescription (think Claritin, Zyrtec, Prilosec et al) are now over the counter, and some folks are avoiding other prescription drugs over concerns about safety,
These results are contained in PBM giant Medco’s 2009 Drug Trend Report, released this morning. The company has sixty million members, so the data does provide insight into broader, national trends.
Over the next two years, Medco is projecting annual spending growth of 4% – 7%, with specialty drugs’ inflationary influence overcoming significant patent terminations for brand drugs. That said, illnesses such as diabetes, hypertension, hyperlipidemia, and the resulting heart disease are having a major impact on drug spend, as well as overall medical inflation.
These are all heavily influenced by obesity, a problem that continues to get worse – and worse.
Notably, Medco’s analysts don’t believe the weak economy had as much of an impact as these other factors, although there was a bit of an uptick in generic utilization (now at 64.1% of all scripts). As noted above, the big driver was specialty drugs, which rose at an annual rate of 15.8%. Their influence is going to increase, as about a third of all medicines in the pipeline are specialty drugs. Their share of total spend, driven by price increases more than utilization, is now at 12.8%; one-eighth of all drug costs are for these highly-specialized medications.
Of interest to those in the work comp space, narcotics and anti-seizure meds each accounted for about 2.7% of total spend, a marked contrast to their overwhelming presence in the comp space.
Nationally, drug costs were projected to increase 3.5% in 2008; in contrast physician expenses were up 6.2% and hospital costs jumped the most – 7.2%.
May
13
You mention drugs such as Prilosec and Claritin. true, some patients avoid the RX route and buy them O-T-C, there is another factor here. Many physicians still write scripts for very expensive “me-too” drugs. For example, instead of informing a patient that they can pick up Prilosec, a generic O-T-C for less than $20 for a month supply, they will give them a prescription for the “me-too” version of either Nexium or Zegerid, drugs which cost over $150.00 for a month’s supply. Many times the co-payment alone is over $20.00, and lets not forget, someone is picking up the rest of the cost on the back end. Same thing for Zyrtec ( a Claritin type of drug). You can pick up a 3 month supply of generic Zyrtec, over-the -counter for about $ 10.00, yet physicians are writing for “me-too” drugs such as Xyzal, which costs over $ 100.00 for a 1 month supply. What is the diffirence between these two drugs besides the price, Zyrtec’s chemical name is Cetrizine, while Xyzal, which has been “tweaked” has a chemical name of levoCertizine. The Obama administration can save health care millions upon millions by just clamping down on the FDA and not allowing the approval of “me-too” drugs and “evergreening”.
Then you will see Drug costs drop quicker than ever before!
Lets not forget the “perks” that the doctors are getting from the manufacturers, by writing a prescription on a brand name.
Lets not forget the “perks” that the doctors are getting from the manufacturers, by writing a prescription on a brand name.
The $1.1 billion Obama has earmarked for ‘comparative efficacy’ guidelines will ostensibly decrease the number of ‘me-toos’ being approved. Pharma will have to prove their new meds are not only safe and effective, but more cost-effective than existing therapies.
Unfortunately, the comparative efficacy plan as conceived relies on existing published studies, and will probably lead to a lot of cherry-picking of data, clinical endpoints, etc.