A new report by Express Scripts has found that medication spending by commercial health plans grew by 13.1% last year, primarily due to the release of high cost Hepatitis C meds. Spending also increased significantly for compounded drugs. In the prior decade, total spending ranged between three and six percent.
Keep in mind that the headline statistic of 13.1% applies to how much was spent on drugs; it actually doesn’t tell us anything about the prices of the drugs. If drug utilization, which refers to the amount of drugs taken, increases while prices stay the same, then there’s more spending. As it turns out, utilization decreased by a marginal 0.1 % and d prices increased by 13.2%, demonstrating that drug costs were the primary cause of increased drug spending. In fact, a vice president at Express Scripts referred to the drug price increases as “unprecedented and unsustainable.”
Specialty drugs, which often require careful handling, administration, or monitoring, saw a dramatic 30.9% increase in spending. As mentioned earlier, spending on hepatitis C treatments was the primary driver in overall spending, skyrocketing by 742.6%. Other notable (though nowhere near even 100%) increases include 20% for oncology drugs, 24% for treatments for inflammatory conditions, and 17% for hemophilia drugs. It’s not uncommon for these medications to cost many thousands, even tens of thousands of dollars per month. Sovaldi, a hep C drug, costs $1,000 per pill. We covered the Sovaldi saga in depth.
The story for traditional medications, such as those commonly used to treat asthma, depression, diabetes, GERD, high cholesterol, and pain is much more mixed. Despite drug prices rising by 6.4% overall, prices dropped for five out of ten therapy classes. Depression medication prices, for example, plummeted by 18%. Interestingly, the report noted compound drugsas a therapy class, even though they treat a variety of conditions. These drugs had an unusually large price increase of 128%! Excluding compound drugs, drug prices for traditional meds were up only 2.3%. (more…)
Tagged with: AbbVie, Express Scripts, Gilead Sciences, Harvoni, Hepatitis C, Sovaldi
Specialty drugs have been in the news for their exorbitant prices lately. Gilead Sciences’ Hepatitis C cure Sovaldi has received media exposure for costing $84,000 and in 2012, when Memorial Sloan-Kettering Cancer Center refused to use the colon cancer medication Zaltrap because of its $11,000 a month price, the manufacturer responded by offering discounts of 50%. Will these high prices come way down once the medications go generic?
A new study from the National Bureau of Economic Research, examined costs and utilization of specialty drugs (specifically cancer meds) as generic versions are introduced. Generally, prices for generic drugs drop as more manufacturers produce them due to price competition. This should presumably happen for specialty drugs, but there’s a catch. Many specialty drugs have a small user base and some of them are formulated as solutions or injection, which may require more specialized and expensive manufacturing processes compared to traditional oral drugs (i.e pills, liquids). For those reason, the drugs price discrepancy between brands and generics is not as great among specialty medications compared to regular medications.
The study didn’t analyze the best way to actually pay for these medications. But a recent analysis by HealthPocket took a look at Obamacare plans and specialty meds. Check that out here. We are still researching paying for specialty drugs and will have our own analysis and tips for saving at some point in the future.
Keep in mind that over time specialty drugs, such as Sovaldi, will go generic in the U.S. and be prices considerably lower than the brand. But unlike many pills for high blood pressure, depression, or cholesterol, you won’t find $4 Zaltrap at your local Rite-Aid anytime soon.
I wish I had a more concrete answer and analysis on the prices and access to specialty meds. It’s something that we here at PharmacyChecker.com are keeping an eye on, and we will certainly have updates in the future.
Tagged with: Gilead Sciences, National Bureau of Economic Research, Obamacare, Sloan-Kettering, Sovaldi, specialty drugs, Zaltrap
Ever since the FDA approved Sovaldi (sofosbuvir), and its price was announced – $1,000 per pill – healthcare advocates, health insurance companies, pharmacy benefit managers, consumer groups, and politicians have been up in arms. Its cost, for the usual prescription of 84 pills, is about $31,000 more than the median annual household income in the United States, which is about $53,000. How could a 12-week drug treatment plan cost $84,000?! Well, the manufacturer of Sovaldi, Gilead Sciences, can charge whatever it wants since there is no equivalent brand drug or generic on the market and the U.S. government, by law, cannot legally negotiate drug prices for Medicare.
The costs to treat Hep C don’t stop with Sovaldi by the way. Depending on the genotype of a person’s Hep C, Sovaldi is prescribed as part of a medication cocktail that also includes either ribavirin or ribavirin and an Interferon treatment. Total prices for treatment can reach $160,000 but we’ll just focus on Sovaldi so as not to bite off more than we can chew.
This Twilight Zone approach to pricing Sovaldi and other specialty medications pumps up the rage volume to a frightening anti-pharma crescendo, but now a moment of silence: Thank you scientists, medical researchers, and dedicated people at Gilead for developing this truly awesome medication and bringing it to market. Sovaldi actually cures Hepatitis C, a disease that afflicts about 3.2 million Americans! Rock on Gilead! Gilead and its shareholders should and shall be rewarded handsomely.
Despite this, Gilead and the Big Pharma Gang should not be allowed to threaten the American healthcare system with obscene prices, even for their wonder drugs. Is Gilead really expecting to be paid $84,000 to treat 3.2 million people: a cost of $268 billion? That is more money than the gross national products of 150 countries! Finland’s annual economic output in 2013 was $257 billion. On to the dirty dollar details… (more…)
Tagged with: Gilead Sciences, Sovaldi, specialty drugs, Specialty Medications