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Drug Week–Reports Part IV

By July 14, 2011Commentary

The last of the big three PBMs is Express Scripts, which has titled its voluminous 2010 Drug Trend Report “Complex Challenges, New Solutions.”  Express Scripts differentiator du jour is behavioral psychology applied to pharmacy management.  ESI highlights three aspects of consumer behavior that affect trend:  where the consumer gets the prescription filled; what drugs (i.e., generic vs. brand) the consumer chooses; and the consumer’s adherence to the prescription.  ESI claims that $400 billion in spending could have been saved in 2010 if all behaviors had been optimized but well over half of this is the phony adherence number from a poorly done study that claimed non-adherence cost $258 billion a year.  The ESI report, however, does do a good job of presenting research on how to move consumer behavior to both lower cost and get better health outcomes.  ESI also has honed in on specialty management, with a supposed integrated approach to medical and pharmacy benefit components.  ESI believes specialty could account for 40% of US drug spend by 2014.  In terms of drug trend, ESI experienced an overall 3.6% increase, but specialty was an a 20% uptick from 2009.  Generic drugs had a 10% unit cost decrease, but brands were up almost 10%.  Unit cost was almost all of the overall trend increase.  Spending on diabetes and high blood cholesterol medications represented the largest categories and with Lipitor going off patent, diabetes meds will be the biggest category over the next few years.  ESI specialty numbers don’t include drugs covered under the medical benefit but a separate analysis it offered suggests that these are over half of total pharmacy spending and spending on them may be growing even faster than that on pharmacy benefit specialty products.  This report also includes a very good review by therapeutic class.  ESI expects specialty trend to be over 26% in 2011, 2012 and 2013, while traditional trend is below 4% in each of those years.  The report also has a section breaking out a Medicare and Medicaid trend review.   (ESI Report)

ESI has a division, PMSI, which focuses on workers’ compensation drug management.  The trend in this subsector was actually negative in 2010 with spending declining by 2.3% per injured worker.  Most of this was due to a decrease in unit cost.  Greater use of generics and mail order helped this trend downward.  Pain drugs and anti-inflammatory medications are the largest categories in workers’ compensation.  Pain meds are particularly susceptible to abuse and need careful management.  Physician dispensing can be a real problem in containing cost for workers’ comp payers.  In addition, state regulations are often impediments to good management techniques.   (PMSI Report)

The Pharmacy Benefit Management Institute’s report is based on a survey of 378 employers representing 5.8 million covered lives.  This data has been gathered since 1995 and provides a good longitudinal look at the design of pharmacy benefits.  The big picture trends are that more formulary tiers are being used; consumer cost-share percent for generics has declined, while that on brands is increasing; the overall percent paid by the consumer has remained flat for about five years; the copay differential between mail and retail pharmacy has narrowed; reimbursement to pharmacies is declining and utilization management is expanding, particularly on specialty drugs.  Surprisingly, only about 5% of employers cover genetic testing to aid in drug prescribing.  About half of employers are using elements of value-based benefit design for drug coverage.  Almost 20% require long-term maintenance meds to be obtained through mail order.  For the first time PBMI collected data on specialty drugs separately, finding, along with everyone else, that they are an increasingly urgent challenge for employers.  An excellent report for understanding how employers are looking at drug coverage.   (PBMI Report)

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