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February 06, 2017 12:00 AM

Report: Drug price increases were tame in 2016

Adam Rubenfire
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    Per-person prescription drug spending increased 3.8% for health plans covering employees and their families, a tame increase when compared to the prior year, according to a new report from Express Scripts.

    The St. Louis-based pharmacy benefits manager said the increase was 26.9% less than the 5.2% increase observed in 2015. That may in part be due to consumer backlash over drug prices, including widespread outrage over Mylan Pharmaceuticals' pricing of the EpiPen.

    Though high-deductible plans are an emerging trend for American employers, members of commercially insured plans managed by Express Scripts saw their total share of pharmacy costs decrease for the second consecutive year, the PBM maintained. However, that decrease was minimal – members paid 14.6% of the total cost of prescription medication in 2016, compared to 14.8% the year before.

    Utilization of traditional drugs increased modestly in 2016, while specialty drug use increased 7.1%. Specialty drugs used for inflammatory drugs and oncology saw some of the biggest increases in utilization, and continue to account for some of the highest spending amounts across therapy classes, along with diabetes medication.

    One of every five dollars spent on prescription drugs was for a diabetes or specialty inflammatory conditions drug.

    Hepatitis C drugs were the only class on the list that saw a negative trend, as utilization declined by 27.3%. These expensive drugs usually eliminate the virus after a single course of treatment, but the cost can be prohibitive for some patients. The market, led by Gilead Sciences, has become increasingly competitive as additional drugmakers have come out with their own treatments.

    Notably, contraceptives and depression medications now appear on the list for the top 15 drugs with highest per-member-per-year spend, replacing medication used to treat mental/neurological disorders and compounded drugs. The FDA issued guidance last year clarifying providers' ability to compound drugs, and there has been some question as to whether compounded therapies may have excessive costs. The emergence of a generic version of popular mental health drug contributed to a decrease in cost for the mental/neurological category, Express Scripts said.

    Leaders at Cardinal Health, McKesson Corp., and AmerisourceBergen have all lamented the slowing pace of drug price increases. Distributors have taken a hit from weaker-than-expected price increases, because their reimbursement is often a percentage of the value of the drug inventory they handle.

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