A new report by IMS Institute for Healthcare Information announces U.S drug spending during 2014 at a record $374 billion. The record spend represented a 13% increase over 2013. This should come as no surprise to prescription drug plan sponsors trying to control and reduce prescription drug costs. They’ve watched as the predictions regarding specialty drugs and skyrocketing generic prices have blown holes in the prescription drug budget estimates.
The lion’s share of the cost increase is attributed to the new Hepatitis C drugs, according to the report. Solvaldi and Harvoni from Gilead Sciences led the charge with a 12-week treatment regimen of Solvaldi costing upwards of $85,000 per patient. As more patients became aware of this breakthrough treatment (assisted by aggressive direct-to-consumer advertising) the race was on to charge what they could for as long as they could. Fortunately, AbbVie’s Viekira Pak provided another breakthrough alternative, an enabled PBM’s like Express Scripts to negotiate preferred pricing for exclusive positioning on their national preferred formulary.
Other leading cost contributor’s came from the anti-psychotic medication Ambilify, and another stellar product from AbbVie, Humira, for treatment of rheumatoid arthritis. Drug spending for treatment of multiple sclerosis is also blowing up, with this therapy class growing by 24.4%.
The Hep C battle for costly drug therapies is far from over, and we expect to see more patients, who were either undiagnosed or being put on hold until these improved therapies became available and acceptable by their physicians, begin treatment. Additionally, more good news/bad news: the specialty pipeline continues to bring new drugs to market. This year’s impact specialty drug is expected to be a new class of cholesterol-lowering medication, known as PCSK9 inhibitors. These treatments are used to reduce LDL cholesterol (the bad one) and is designed for patients who have proven resistant to, or otherwise unable to be treated with more conventional approaches using diet and/or statins. (For attentive readers, you will recall that WBC predicted 4 years ago a wave of new specialty medications that would reach beyond the rare disease conditions and would be addressing common-place illnesses, such as heart disease and diabetes)
Unlike Hep C treatments, which typically is prescribed for a 12-week course, PCSK9 therapy could be used for the lifetime of the patient. Annual costs are expected to be around $10,000 per patient. A plan sponsor needs to work closely with their PBM or consultant to address these and other specialty treatment alternatives that will continue to enter the marketplace. Stay tuned. There will be much more to come!