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Home » Report: U.S. prescription drug spending increased 13.1% in 2014

Report: U.S. prescription drug spending increased 13.1% in 2014

March 12, 2015
CenterWatch Staff

New hepatitis C therapies with high price tags and the exploitation of loopholes for compounded medications drove a 13.1% increase in U.S. drug spending in 2014—a rate not seen in more than a decade—according to new data released in the 2014 Express Scripts Drug Trend Report. Headquartered in St. Louis, Mo., Express Scripts provides integrated pharmacy-benefit management services.

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%.

Specialty medications—biologic and other high-cost treatments for complex conditions such as multiple sclerosis and cancer—accounted for more than 31% of total drug spending in 2014. As Express Scripts forecast last year, specialty drug trend more than doubled in 2014, to 30.9%. Hepatitis C medications accounted for 45% of the total increase in specialty spend, despite having the second lowest prescription volume among the top 10 specialty conditions. Medicare plans were the hardest hit, as their annual specialty drug spend increased 45.9%.

"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.

The U.S. spent nearly 743% more on hepatitis C medicines in 2014 than it did in 2013. 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.

Drugmaker consolidation and drug shortages also led to the increase in traditional drug trend. Diabetes remains the leading traditional therapy class for a fourth straight year based on total costs; Express Scripts expects double-digit increases in spend in this class over the next three years due to once-weekly oral and injectable drugs in the pipeline. Cost for medications to treat pain increased 15.7% in 2014, due in part to new tamper-resistant formulations for opiates. Inflammatory conditions, which include treatments for rheumatoid arthritis and psoriasis, maintained their position as the costliest specialty drug class due to expanded indications and increased prevalence of treatment.

The Express Scripts Drug Trend Report examines annual changes in utilization, unit costs and overall prescription drug spending, based on the pharmacy claims data from Express Scripts.

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