Prime Therapeutics reports one of the industry's lowest drug trends in its annual Drug Trend Insights report

"Appropriately managing our drug trend each year is very important to us because it shows that we're doing our job – helping clients provide affordable medications to customers," said Eric Elliott, Prime president and CEO. "Changes in the marketplace will make it increasingly important to keep costs down while actively engaging customers in their benefits and their care. These are priorities Prime has long pursued, and we continue to work diligently to balance these two essential aspects of a well managed integrated benefit."

According to the report, traditional medication (non-specialty) spending dropped 1.5 percent. This happened in a year marked by the largest generic drug launch in history when cholesterol-lowering drug Lipitor went off patent. Though use of traditional drugs increased by 2.1 percent, greater availability of generics helped push Prime's commercial generic fill rate to an all-time record of 74.7 percent by the end of 2011, and 80.1 percent across the Medicare Part D population. The increase in generic use helped drive down Prime's net ingredient cost per prescription (a measure that includes all network discounts, manufacturer rebates and administrative fees) in 2011 by 1.6 percent.

Among traditional drugs, the report found:

• Use of ADHD drugs increased 12.7 percent, resulting in the highest spending increase among all traditional drugs.
• Blood thinners, ADHD drugs and drugs used to treat psychosis saw the greatest cost increases last year, while allergy and gastrointestinal medications had the lowest trend as more over-the-counter (OTC) options entered the market.
• Drugs to treat high blood pressure were the most-used drug class, accounting for 17.1 percent of all prescriptions filled in 2011.
• Diabetes drugs accounted for the greatest percentage of drug spend last year, at 8.3 percent. Increases in use and a lack of new generics to offset high-cost injectable insulin helped drive the increase in 2011.

Generic use is expected to continue to grow in 2012 and 2013, as generics for blockbuster drugs like Plavix®, Singulair® and Cymbalta® enter the market. According to Prime, by 2015 the savings from generics may be offset as spending shifts to high-cost specialty drugs. In addition, PBM industry consolidation, the launch of state-run health insurance exchanges and a growing movement to limit pharmacy networks will all impact pharmacy spending over the next year.

"The health care industry, and in particular, the pharmacy benefit space, is changing rapidly. In spite of the ever-shifting environment, we have continued to keep costs low and that is something we are very proud of," said Peter Wickersham, senior vice president of cost of care at Prime. "As the market evolves, our main focus will continue to be on the individual consumer and our unique ability to provide superior quality programs."

Specialty drug spending takes significant jump
Spending on high-cost specialty medications used to treat complex and chronic conditions increased 20.1 percent in 2011. Prime's analysis predicts total spending on specialty drugs will reach 30 percent of all pharmacy expenditures by 2016, as the cost of these drugs grows rapidly and an increasing number of people use specialty medications.

Specialty drugs represented just 0.4 percent of prescriptions, but accounted for more than 15 percent of all spending last year. Price increases were a key factor in the growth in spending, especially among drugs used to treat multiple sclerosis, which saw a 14.7 percent price increase in 2011, followed by oral oncology drugs which saw prices for existing treatments increase 8.6 percent.

Overall oral oncology spending increased 18.6 percent last year, as several new treatments costing $10,000 or more per month were approved. Significantly, 3.3 percent of total specialty spending (both pharmacy and medical benefits) covered injectable cancer treatments, which are managed under the medical benefit.

According to the report, about one-half to two-thirds of all specialty medications are managed by the pharmacy benefit, while the remaining specialty drugs are managed under the medical benefit. As an integrated pharmacy benefit manager (PBM) partnered with 13 Blue Cross and Blue Shield (BCBS) plans, Prime is uniquely positioned to view the complete specialty landscape. It found that many conditions treated by specialty drugs managed through the pharmacy benefit also have significant expenses on the medical benefit. For example, 18 percent of the total costs paid for autoimmune treatments in 2011 were covered by the medical benefit.

"Specialty drugs cost up to 50 times more than the average traditional medication, and because manufacturers of these drugs often have exclusivity in the market, they can charge astronomically high prices and then raise them repeatedly," Elliott said. "How well plan sponsors handle these costs in the future significantly depends on how they prepare today."

Prime's recently launched oncology management program is helping plan sponsors manage these treatments across benefit boundaries while helping the most vulnerable individuals access vital support. For example, by flagging new prescriptions for cancer-related nausea medications, Prime is able to alert BCBS plan case managers of people newly diagnosed with cancer. Faster identification allows the plan to provide timely support to help coordinate care and help these customers take their cancer medications safely and as directed.

Additionally, Prime's "split fill" program helps prevent waste of high-cost oral oncology medications, which are more convenient than intravenous cancer treatments but can still cause unpleasant side effects. Through the initiative, the first prescription for certain specialty drugs is split in two. If the individual cannot continue the treatment, little to no medication is wasted. The program is able to help save $2,000-$4,000 per prescription.

Prime's 2012 Drug Trend Insights analysis is based on approximately 110 million commercial claims processed between January 1 and December 31, 2011, compared to the same period in 2010. Drug spend is defined as the total amount paid per member per month. A full copy of the report is available online at www.primetherapeutics.com.

Prime Therapeutics is a pharmacy benefit management company dedicated to providing innovative, clinically-based, cost-effective pharmacy solutions for clients and customers. Providing pharmacy benefit services nationwide to nearly 20 million lives, its client base includes Blue Cross and Blue Shield Plans, employer and union groups, and third-party administrators. Headquartered in St. Paul, Minn., Prime Therapeutics is collectively owned by 13 Blue Cross and Blue Shield Plans, subsidiaries or affiliates of those Plans. Learn more at www.primetherapeutics.com. Follow Prime on Twitter @Prime_PBM.

SOURCE Prime Therapeutics