2016 Express Scripts Drug Trend Report

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.