Today we dig deeper into the Express Scripts Drug Trend Report (link in yesterday’s post) to examine trends in non-commercial lines of business. In regard to Medicare, which marks the tenth year of the drug benefit, 94% of members are satisfied with their drug benefit. Drug use and adherence are important parts of Stars measures, and overall Medicare plans have 77-80% adherence. For 2015, overall Medicare drug trend was 10.9% or $2914 per member per year. Utilization grew 2.2% and unit cost 8.7%. Traditional medication spend rose 4.8%, with utilization being 2.2% and unit cost 2.6%, while specialty trend was 27.9%, driven by a 10.7% rise in utilization and a 17.2% price rise. Medicare Advantage drug plans experienced a much lower trend, 3.5%, than did stand-alone PDPs, 17.5%, likely a tribute to better management by the health plans. The generic fill rate in Medicare was 87% and generics experienced a lower unit cost while brand prices rose significantly. The highest Medicare traditional drug categories were diabetes, mental health, cholesterol-lowering, blood pressure and asthma, while the fastest growing categories were anti-coagulants, heartburn drugs and diabetes. High blood pressure drugs saw less spending. The largest specialty categories were oncology, hepatitis C, multiple sclerosis and inflammation; while the fastest growing ones were hepatitis C, oncology inflammation and osteoporosis. All of these categories show the prevalence of chronic diseases in this population. Medicare trend for 2016 is forecast at 12.4%, for 2017 at 13.3% and for 2018 at 14.3%. Those are hefty numbers and beneficiaries should expect to see comparable premium increases.
For Medicaid, the 2015 drug trend was 5.7%, a combination of a 2% utilization increase and a 3.7% unit cost rise, with the total being $970 per member per year. More so, than other populations, a smaller proportion of Medicaid members account for much of the drug spending. In traditional categories, trend was 3.3%, with utilization rising 2.1% and unit price 1.3%, while for specialty trend was 10.1%, with 2.2% being utilization growth and 12.3% price increases. Among traditional medications, diabetes, mental health, asthma and attention disorders accounted for the most spending, while diabetes and attention disorders showed the most rapid growth. Spending for depression and mental health drugs declined. In specialty Medicaid drugs, which account for 37% of all Medicaid drug spending, HIV, hepatitis C and inflammation were the largest categories, while hemophilia, inflammation and oncology were the fastest growing. Express Scripts projects Medicaid drug trend at 7.5% in 2016, 8.8% in 2017 and 9.9% in 2018.
For health insurance exchange business, per member per year drug spend was $777, up 14.6% from 2014. (now you know one reason why premiums are rising so rapidly) Utilization rose 8.6% and unit prices 6%. Traditional drugs saw a 9.4% increase, with 8.7% coming from greater utilization and only .7% from higher prices. In the specialty category, trend was 14.6%, with 8.6% attributable to more utilization and 6% to higher costs. Trend steadily rose by age cohort, with the oldest exchange enrollees experiencing nearly a 20% rise. Silver level plans also had by far the highest trend, 20%, and these are the most popular plans. Diabetes, pain, HIV, hepatitis C, inflammatory conditions and oncology were large drug categories.
Overall the report paints a grim picture, with rapidly rising drug prices only partly offset by slower-growing utilization, and a forecast for double-digit spending growth well into the future.