Post by stcks on Apr 23, 2017 19:59:56 GMT
Drug Spending Slows for Major Pharmacy Benefit Managers
New reports from four PBMs reveal minimal changes in drug trend percentages.
April 17, 2017
By Jill Sederstrom
Drug spending is leveling off, but the gap between list and net drug prices continues to grow. Despite recent scrutiny about drug spending, new reports from four of the largest pharmacy benefit managers (PBMs) reveal minimal changes in drug trend percentages.
Express Scripts, the largest PBM in the United States, reported a change in commercial payer drug spending of 3.8% in 2016. CVS Health (Caremark) saw a change of 3.2%, and Prime Therapeutics reported a change of just  2.5%. Medimpact reported the largest change in commercial drug spending of the four PBMs, at 4.4%.
“The U.S. doesn’t have a drug spending problem,” Adam Fein, PhD, CEO of the Drug Channels Institute, wrote on his Drug Channels blog about the four reports. “It’s fake news.”
Fein told Drug Topics that although the public debate seems to focus only on drug list prices, that can be a very misleading indicator.
“Growth in spending comprises both prescription utilization and the net post-rebate price of drugs,” he said.
When pharmacists successfully improve adherence, utilization will go up. “This is a positive trend, because it is well established that pharmaceutical spending reduces medical spending,” Fein said.
The gap between list and net drug prices continues to grow, he said, resulting in the very slow growth in the net price of drugs.
According to the report from CVS, the 3.2% year-over-year trend was the lowest the company had seen in four years. The 3.8% commercial drug spending change Express Scripts saw in 2016 had also slowed from 2015. During 2015, the company reported that commercial plans saw an increase of 5.2% for per person spending on prescription drugs.
Glen Stettin, MD, Senior Vice President of Clinical Research and New Solutions at Express Scripts, attributed the slower growth trend to new management strategies and tools offered by the company.
“Express Scripts introduced new solutions for 2016, including formulary enhancements and new SafeguardRx modules for better managing brand inflation, hepatitis, cholesterol, and cancer that were widely adopted by our commercial clients,” he said. “As a result, one-third of Express Scripts commercial clients actually decreased their pharmacy spending per person in 2016 versus 2015.”
This spending trend was also seen in other PBMs as well. Fein reported that on average, about one-third of clients who worked with the four PBMs saw year-over-year declines in drug spending. For instance, CVS reported that 38% of its commercial clients saw a negative trend in 2016.
According to Express Script’s drug trend report, the average list prices for commonly-used brand name drugs increased nearly 11% in 2016, down from 16% in 2015. Â
“Notably, plans managed by Express Scripts experienced only a 2.5% increase in unit costs across all prescription medications – nearly 22% lower than 2015, and more than 60% lower than the increase in prices, net of rebates, recently reported by major drug makers,” Stettin said.
He believes these figures suggest that rebates are not the driving price behind price inflation.
Fein noted in his blog, however, that all four PBMs used different sampling approaches to determine their drug spending figures.
The findings from the reports come on the heels of recent scrutiny into drug spending. During meetings with pharmaceutical executives, President Trump has asked companies to cut prices and produce more of their drugs in the United States.
However, Stettin says, when payers are able to manage their benefits they can reduce overall spending on medications and maintain patient out-of-pocket costs.
“The public is concerned about high drug prices, and rightfully so. In 2016, we saw several examples of egregious price increases, and those increases were a significant burden for many families and for payers,” Stettin said. “However, when you look at our data you can see that effective management of a pharmacy benefit does make medication more affordable and accessible for all.”
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New reports from four PBMs reveal minimal changes in drug trend percentages.
April 17, 2017
By Jill Sederstrom
Drug spending is leveling off, but the gap between list and net drug prices continues to grow. Despite recent scrutiny about drug spending, new reports from four of the largest pharmacy benefit managers (PBMs) reveal minimal changes in drug trend percentages.
Express Scripts, the largest PBM in the United States, reported a change in commercial payer drug spending of 3.8% in 2016. CVS Health (Caremark) saw a change of 3.2%, and Prime Therapeutics reported a change of just  2.5%. Medimpact reported the largest change in commercial drug spending of the four PBMs, at 4.4%.
“The U.S. doesn’t have a drug spending problem,” Adam Fein, PhD, CEO of the Drug Channels Institute, wrote on his Drug Channels blog about the four reports. “It’s fake news.”
Fein told Drug Topics that although the public debate seems to focus only on drug list prices, that can be a very misleading indicator.
“Growth in spending comprises both prescription utilization and the net post-rebate price of drugs,” he said.
When pharmacists successfully improve adherence, utilization will go up. “This is a positive trend, because it is well established that pharmaceutical spending reduces medical spending,” Fein said.
The gap between list and net drug prices continues to grow, he said, resulting in the very slow growth in the net price of drugs.
According to the report from CVS, the 3.2% year-over-year trend was the lowest the company had seen in four years. The 3.8% commercial drug spending change Express Scripts saw in 2016 had also slowed from 2015. During 2015, the company reported that commercial plans saw an increase of 5.2% for per person spending on prescription drugs.
Glen Stettin, MD, Senior Vice President of Clinical Research and New Solutions at Express Scripts, attributed the slower growth trend to new management strategies and tools offered by the company.
“Express Scripts introduced new solutions for 2016, including formulary enhancements and new SafeguardRx modules for better managing brand inflation, hepatitis, cholesterol, and cancer that were widely adopted by our commercial clients,” he said. “As a result, one-third of Express Scripts commercial clients actually decreased their pharmacy spending per person in 2016 versus 2015.”
This spending trend was also seen in other PBMs as well. Fein reported that on average, about one-third of clients who worked with the four PBMs saw year-over-year declines in drug spending. For instance, CVS reported that 38% of its commercial clients saw a negative trend in 2016.
According to Express Script’s drug trend report, the average list prices for commonly-used brand name drugs increased nearly 11% in 2016, down from 16% in 2015. Â
“Notably, plans managed by Express Scripts experienced only a 2.5% increase in unit costs across all prescription medications – nearly 22% lower than 2015, and more than 60% lower than the increase in prices, net of rebates, recently reported by major drug makers,” Stettin said.
He believes these figures suggest that rebates are not the driving price behind price inflation.
Fein noted in his blog, however, that all four PBMs used different sampling approaches to determine their drug spending figures.
The findings from the reports come on the heels of recent scrutiny into drug spending. During meetings with pharmaceutical executives, President Trump has asked companies to cut prices and produce more of their drugs in the United States.
However, Stettin says, when payers are able to manage their benefits they can reduce overall spending on medications and maintain patient out-of-pocket costs.
“The public is concerned about high drug prices, and rightfully so. In 2016, we saw several examples of egregious price increases, and those increases were a significant burden for many families and for payers,” Stettin said. “However, when you look at our data you can see that effective management of a pharmacy benefit does make medication more affordable and accessible for all.”
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