2016 Express Scripts Drug Trend Report

By February 27, 2017Commentary

Drug spending, while still the fastest rising medical expense category, has slowed to a more moderate pace.  A new report from Express Scripts looks at utilization and costs in 2016.   (Express Scripts Report)   At a high level, for Express Scripts’ customers, per capita spending on prescription drugs rose 3.8% in 2016, compared to 5.2% in 2015.  One-third of the firm’s customers actually experienced a per person spending decline.  But within that overall number, there is a sharp divergence between traditional medications and specialty compounds.  For traditional drugs, utilization rose 1.3% while unit cost actually fell 2.3%, leaving a 1% decline in spending per person.  On the other hand, specialty drug utilization rose 7.1% and unit prices rose 6.2% so specialty drugs contributed a 13.3% rise in trend, although this was down from 2015.  Specialty compounds now account for a third of all drug spending.

The average copay for a 30 day prescription was $11.34, up 9 cents from the prior year, and patients covered 14.6% of total drug spending, compared to 14.8% in 2015.  Express Scripts arranged about $437 million in copay assistance for patients using specialty drugs.  According to the authors, average list price for brand-name drugs rose 10.7% in 2016 but Express Scripts was able to keep this growth to 2.5% for its clients.  The highest spend categories were inflammatory conditions, at $118.21 per member per year, with 26.4% year-over-year growth, driven by a mix of utilization and unit price rises; diabetes at $108.80 per member per year, a 19.4% increase driven largely by unit price growth; and oncology at $60.70 per member per year, 21.5% growth also driven by a mix of use and price.

Over the next three years, Express Scripts expects drug trend to increase 10.3% in 2017, 11.6% in 2018 and 12.7% in 2019.  Major culprits in this spending increase include inflammatory medications with 30% trend, diabetes with 20% and oncology with 20% growth.  The company continues to see opportunities for greater generic use, which is important since generic drugs overall continue to show price declines will brand-name drug prices are growing rapidly.  Kind of the same-old same-old for drug spending; manufacturers continue to price new brands at a very high price and to increase prices rapidly every year on existing brand medications; and cost managers continue to try to limit the impact of those prices, which is generally a losing battle.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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