Drug Spending Largely Driven by HCV Drugs, Compounded Medications

Just 2 therapy classes are responsible for more than half of the increase in overall prescription drug spending in the United States, reported Express Scripts.

In 2014, hepatitis C therapies and compounded medications drove a 13.1% increase in drug spending. Without those 2 therapy classes, the year over year increase in per capita drug spending was just 6.4% last year.

While annual drug spending increases have remained low compared to the annual rate of overall healthcare inflation, large increases in medication prices are about to change that.

"Now, more than ever, plans need to tightly manage the pharmacy benefit, implement smarter formularies, control compounded medication use and offer the right clinical support to ensure all patients are able to achieve the best possible health outcomes at a price our country can afford,” Glen Stettin, MD, senior vice president of clinical, research, and new solutions at Express Scripts, said in a statement.

Specialty medications accounted for more than 31% of total drug spending with hepatitis C medications nearly half of the specialty spend. However, new competition in the hepatitis C market at the end of 2014 and exclusivity contracts with health plans and pharmacy benefit managers is expected to save the country $4 billion in 2015.

Coming innovations are expected to be just as pricey. New PCSK9 inhibitors for high blood cholesterol are projected to cost as much as $10,000 per patient with a patient population up to 10 million Americans, according to Express Scripts.

Despite the large increase in drug spending in 2014, Express Scripts found that payers with tightly managed pharmacy plans fared much better than the rest of the country. Payers that implemented 4 or more cost-management programs had nearly no drug trend and spent nearly 30% less per member on medications for chronic conditions, such as diabetes.