Express Scripts Drug Trend Report

Express Scripts, which recently completed its acquisition of Medco to become the largest PBM, has released its annual drug trend report.  These reports are useful not only for what they show about drug utilization and spending, but because they also give insight into broader health care trends, what diseases and treatments are becoming more or less common.  All of the PBMs have begun to highlight some particular approach that makes them distinctive.  ESI’s is application of behavioral economics to drug use and the report highlights the firm’s research in this area.  (ESI Report)  At a high level, overall drug spend per member per year grew only 2.7%, with traditional drug growth at .1% and specialty (pharmacy benefit only) at 17.1%.  Unit cost increases account for almost all of the growth.  Diabetes medications were the top category, followed by cholesterol medications.

ESI says it is focussed on getting waste out of the pharmacy benefit; waste is says costs the US $408 billion, due to failure to take medications as prescribed, failure of consumers to use the lowest-cost, clinically effective drug and failure of consumers to use the safest, most cost-effective delivery channel (i.e., mail, where ESI makes most of its profit!).  The number is undoubtedly greatly exaggerated, but there clearly is room to save a lot of money and the approach of using behavioral economics to motivate patients to be better consumers is very solid.  ESI also discusses use of pharmacogenomics tests, which while they can lead to smarter drug prescribing, also have a significant cost and often dubious research support.  There is much useful data on the sources and causes of patient nonadherence and potential remedies for that problem.