Express Scripts plans see lower gains in prescription drug spending
Prescription drug prices may still be high, but Express Scripts says the commercial insurance plans it works with saw the lowest increase in drug spending last year in nearly a quarter of a century.
For private employer and individual health plans, total drug spending rose 1.5 percent last year, according to the latest Express Scripts annual Drug Trend Report. That was the smallest increase since the pharmacy benefits company first began tracking spending in 1993.
Nearly half of all private insurance plans spent less per person year over year, including plans on the Obamacare exchange market, which saw drug spending fall more 3 percent. Overall drug spending for Medicare rose 2.3 percent, while the Medicaid safety net program saw a 3.7 percent spending increase last year.
Among the biggest drivers of the lower trend, a near 31 percent drop in the unit cost of cholesterol drugs, and a 13 percent decrease in pain and inflammation drug costs due to more patients being steered to new lower-cost generics.
“Our clinical programs assure patients get the right drug, and then make sure they get it at the right price,” said Express Scripts CEO Tim Wentworth, on a call with reporters. “Our commitment is to continue with value brands … (but) there is no one thing that is a magic bullet.”
In aggregate, costs for traditional nonbiologic drugs fell 4.9 percent. Spending on specialty drugs rose 11.3 percent, which according to Express Scripts is the lowest increase it has seen. A 40 percent decrease in the utilization of costly hepatitis C drugs, was among one of the factors.
While health plans saw lower spending on drugs, plan members did not necessarily share in those savings. Consumer out-of-pocket costs held steady in 2017. The average plan member on a high-deductible plan spent $268 out of pocket last year, while those in standard commercial plans paid $200.
“Our system is not entirely solved for high out-of-pocket costs. We are working on it,” said Wentworth, adding that his firm has been talking to legislators and the Trump administration about regulatory reforms that will help consumers. “One of the bright spots of bipartisanship (is) around prescription drug affordability. Everyone agrees on that.”
Yet regulatory reform and market forces may not just pressure drug manufacturers. Express Scripts and other pharmacy benefit management firms have been under pressure for their role in negotiating drug prices with pharmaceutical companies and shaping drug benefit plan copays for health insurance companies. Critics have charged that the middlemen have contributed to the high prices consumers pay out of pocket for prescriptions.
Shares of Express Scripts were higher at midday, but seesawed between gains and losses.
Originally posted on cnbc.com