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U.S. prescription drug spending increased 13.1 percent

Staff writer |
New hepatitis C therapies with high price tags and the exploitation of loopholes for compounded medications drove a 13.1 percent increase in U.S. drug spending in 2014, a rate not seen in more than a decade, according to the 2014 Express Scripts Drug Trend Report.

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Hepatitis C and compounded medications are responsible for more than half of the increase in overall spending. Excluding those two therapy classes, 2014 drug trend (the year-over-year increase in per capita drug spending) was 6.4 percent.

Specialty medications – biologic and other high cost treatments for complex conditions, such as multiple sclerosis and cancer – accounted for more than 31 percent of total drug spending in 2014. As Express Scripts forecasted last year, specialty drug trend more than doubled in 2014, to 30.9 percent.

Hepatitis C medications accounted for 45 percent of the total increase in specialty spend despite having the second lowest prescription volume among the top 10 specialty conditions. Medicare plans – required to follow Medicare Part D formulary guidelines – were the hardest hit, as their annual specialty drug spend increased 45.9 percent.

"For the past several years, annual drug spending increases have been below the annual rate of overall healthcare inflation in the U.S., but that paradigm is shifting dramatically as prices for medications increase at an unprecedented and unsustainable rate," said Glen Stettin, M.D., Senior vice president, clinical, research and new solutions at Express Scripts.

"Now, more than ever, plans need to tightly manage the pharmacy benefit, implement smarter formularies, control compounded medication use and offer the right clinical support to ensure all patients are able to achieve the best possible health outcomes at a price our country can afford."

The U.S. spent nearly 743 percent more on hepatitis C meds in 2014 than it did in 2013. Express Scripts' hepatitis C solution, which makes Viekira Pak (ombitasvir-paritaprevir-ritonavir packaged with dasabuvir) available to all hepatitis C patients and guarantees successful completion of therapy through Accredo, is expected to save our clients $1 billion in 2015.

New treatments for hepatitis C are just one example of non-orphan drugs with orphan-drug price tags. Future pharmaceutical innovations, such as new cancer drugs and PCSK9 inhibitors for high blood cholesterol, will continue to challenge payers.

Projected to command an annual cost as high as $10,000 per patient, and potentially reaching a patient population eventually as large as 10 million Americans, PCSK9 inhibitors alone could one day cost the U.S. healthcare system an estimated $100 billion per year.

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