ST. PAUL, Minn., June 17, 2014 /PRNewswire/ -- To help make medicine more affordable for the 25 million members it serves, Prime Therapeutics LLC (Prime) starts with delivering an industry-low net cost per prescription*. In 2013, Prime's average net ingredient cost per prescription was $58.99, according to its 2014 Report on prescription drug costs. Prime's effective utilization management, benefit designs, high generic dispensing rates and negotiated discounts with pharmacies and manufacturers all contribute to keeping net ingredient costs low.
"Net ingredient cost is the truest measure of how successful pharmacy benefit managers are at managing drug costs," said Peter Wickersham, senior vice president of integrated care and specialty at Prime. "Prime's industry-low net ingredient costs demonstrates how committed we are to keeping the cost of medicine more affordable for our members and clients."
Specialty medicines have a powerful effect on net ingredient cost and overall pharmacy spend increases. Inflation in drug prices is the main factor followed by increased use of more expensive specialty treatments. Traditional drug costs decreased overall as a result of the continued shift toward generics and other less expensive traditional drugs. Opportunities for generic savings are becoming fewer and less significant as expensive specialty drug use expands, pushing spend upward.
Prime's 2013 commercial pharmacy spend highlights:
- Prime's generic use rate grew to 80.6 percent and is predicted to top at 84.5 percent by 2016, making it more difficult to offset the impact of costly specialty medicines.
- The use of specialty medicines grew by 4.0 percent, eight times faster than the rate for traditional medicines. Hemophilia saw the most intense increase among specialty medicines. Within the traditional drug classes, diabetes, attention deficit hyperactivity disorder and seizure medicines had utilization increases and, when paired with inflation, produced higher drug spending.
- Price hikes for existing drugs increased Prime's total pharmacy costs by 6.1 percent. Eight of the top ten inflation drug categories were specialty, with biologic anti-inflammatory, multiple sclerosis and cancer (pills) leading the charge.
- Spending on specialty drugs paid under the pharmacy benefit increased by 19.5 percent and accounted for more than 20 percent of Prime's commercial pharmacy-benefit spend. Prime's health plan clients' medical-side specialty costs increased 6.6 percent in 2013.**
- Spending on traditional drugs decreased 0.1 percent, small but still impactful, given traditional drugs account for 80 percent of Prime's commercial pharmacy spend. Several key generic drugs, such as Aciphex® and Cymbalta®, offset the rising cost and small increase in use of traditional drugs.
- Overall, Prime's change in total cost per member per prescription (drug trend) was 3.3 percent.
"As pharmacy costs accelerate, appropriate and aggressive management of specialty drugs is the key to staying ahead," Wickersham said. "We strive for low ingredient costs and work hard to keep those costs low."
Looking ahead, Prime predicts that
- by 2016, overall pharmacy costs will be growing at a rate of 10 to 12 percent per year – more than twice as quickly as today.
- by 2017, drug expenses will account for more than 25 percent of plan sponsors' total annual health care costs.
- by 2018, specialty expenses will comprise 60 percent of all drug spend, three times more than 2014.
Prime's 2014 Report on prescription drug cost analysis is based on approximately 145 million commercial claims processed between January 1 and December 31, 2013, compared to the same period in 2012. In addition to a full copy of the report online, Prime's Specialty today and tomorrow report is also available.
*In 2013, Prime's study compared ingredient costs of leading pharmacy benefit managers for the first quarter of the last three years. Prime beat the competitor average by more than $6 per prescription. Analysis showed that Prime's net ingredient costs were consistently the lowest over the last three years. Prime defines net cost per prescription as the total amount paid for drugs, including manufacturer rebates and administrative fees but not dispensing fees and taxes.
**Due to the unique connection with its health plan clients, Prime is able to monitor and assist clients in managing all drug spending, including specialty costs hidden in medical benefits.
About Prime Therapeutics
Prime Therapeutics LLC (Prime) helps people get the medicine they need to feel better and live well. Prime manages pharmacy benefits for health plans, employers, and government programs including Medicare and Medicaid. The company processes claims and delivers medicine to members, offering clinical services for people with complex medical conditions. Headquartered in St. Paul, Minn., Prime serves more than 25 million people. It is collectively owned by 13 Blue Cross and Blue Shield Plans, subsidiaries or affiliates of those plans. Prime has been recognized as one of the fastest-growing private companies in the nation.
For more information, visit www.primetherapeutics.com or follow @Prime_PBM on Twitter.
SOURCE Prime Therapeutics