Tight management squeezes out high drug prices, Express Scripts claims

Prescription drug spending in the United States rose 5.2 percent in 2015, which is half of the increases noted in years prior. This includes the impact of rebates, driven by an 18 percent increase in specialty drugs, according to a report by Express Scripts, which is a pharmacy benefit manager of drug plans for approximately 85 million Americans. Since 2011, the average price of brand-name drugs rose 98.2 percent, and 16.2 percent in 2015 alone. Also in 2015, prices for one-third of all brand-name medicines increased more than 20 percent. By tightly managing pharmacy benefits, Express Scripts believes it was able to keep its costs down.

Specialty medicines

Traditional drugs contribute minimally to the increase in drug prices due to competition and lack of new entries to the field. The use of specialty medicines, however, including the new, more costly treatments for Hepatitis C, rose 7 percent last year and was coupled with an 11 percent rise in unit cost. Prices are higher for these groups because they require more education and patient monitoring.

Express Scripts provided the Hepatitis C medication for almost 50,000 patients in 2015. The company was able to secure a 50 percent discount on the cost of the Hepatitis C therapy, passing on a savings of more than $1 billion in 2015 to customers.

Rebates

Express Scripts for the first time included rebates in its annual drug spending report, which they claimed took 2.7 percentage points off spending growth. The drug spending report from the previous year revealed an increase of 13 percent, but did not include the impact of rebates.

ACA

Express Scripts also claimed in its report that spending on prescription drugs for members with the individual health plans created by the Patient Protection and Affordable Care Act (P.L. 111-148) (ACA) increased in 2015 by 14.6 percent. This group covered by the ACA also experienced an increase in the use of prescription drugs of 8.6 percent while costs rose 6 percent. The new members used more traditional medicines, Express Scripts noted, as the rate of utilization increased 8.7 percent and costs went up 0.7 percent. The use of specialty medicines increased by 4.7 percent, while prices for these medicines increased by 15.8 percent, according to the report.