Top 3 Things You’ll Learn
- What’s causing the rise in the healthcare spend
- High-impact drug categories to watch
- How the new laws apply to you
It’s no secret that pharmacy is one of the fastest growing and most volatile components of healthcare spend – and it shows no signs of slowing down soon. This everchanging market can be puzzling to navigate, and we want to help you stay ahead. As we close out the year, we are reviewing the top industry trends that we were watching in 2019:
The Relentless Rise of Specialty Spend
Did you know that ten years ago, specialty medications were a mere blip on the pharmacy spend radar? It’s hard to imagine that with 0.3% utilization in 2008, specialty drugs accounted for only 13% of overall drug spend. Compare that to 2018, when specialty utilization increased to 1.1% of overall utilization but accounted for 40.2% of drug spend. The result—a whopping 209% increase over the past ten years.
This surge can be attributed to the greater number of medications coming to market for specific patient populations, high therapy costs, and drug manufacturer price increases. The shift has also forced employers to manage their pharmacy spend more proactively. A foundational clinical strategy is critical to help create a sustainable benefit, guarantee that utilization is appropriate, and ensure that you aren’t paying too much for prescription drugs.
In 2018 #specialtyRx accounted for 1.1% of overall utilization and 40.2% of drug spend — a 209% increase over the past 10 years. #drugcosts
In 2008, the average cost of a brand drug was $176.01, with drugs being used by large patient populations (i.e. statins to treat cholesterol). You probably wouldn’t have guessed then that the average brand drug would cost $4,166 in 2018, with most high-cost drugs used by small populations (i.e. Luxturna to treat an inherited form of vision loss). With 57 new drug applications approved by the FDA in 2018, and 71 drug patents expiring by the end of 2021, we expect to see both brand and specialty drugs continue to grow at an unprecedented pace.
Our question now is whether these new prescription treatments are worth the high costs we’re seeing. Here are some of the high-impact drug categories you will see in 2019:
- A new gene therapy, Luxturna, now treats children and adults with an inherited form of vision loss that may result in blindness. Luxturna costs $850,000 to treat both eyes.
- CAR T-cell therapy is a form of immunotherapy used in certain cancer treatments. CAR T-cell therapy approved drugs can range anywhere from $475,000 per infusion treatment to $1.5 million per patient. Despite the dozens of new cancer treatments that have been introduced over the past few years, costs remain high.
- New specialty drugs for autoimmune conditions (i.e. rheumatoid arthritis, multiple sclerosis, Crohn’s disease) remain on the pipeline horizon, each costing thousands of dollars per month.
- New therapies for common conditions such as migraines, asthma, and peanut allergy will contribute to increased spending as well.
How will these market forces affect your business and clients? Are you and your clients prepared for the changes ahead? If you aren’t sure how to answer these questions or don’t know where to begin, you could use the help of an industry expert who can offer transparent advice and sustainable solutions for pharmacy benefit management. An independent partner provides a personalized, high-level of service that can help you achieve maximum value.