Rx trends 2015: Specialty drug costs

NEW YORK — With specialty and biotech drugs claiming an ever-greater share of the pharmaceutical market and spawning a backlash from payers and patients over their high price tags, pharmacy operators are smack in the middle of a growing tug of war between the drug industry, the public and private health plans struggling to keep up with the new drug-cost paradigm.

 

Few question the effectiveness and life-saving potential of breakthrough bio-engineered drugs like Gilead’s $1,000-a-pill Sovaldi, which not only treats but also can cure hepatitis C. But with “pharmaceutical prices going up tremendously, … the sustainability of specialty drugs is really in question,” said Dr. Steven Miller, SVP and chief medical officer at Express Scripts. 

 

Health plans are feeling the pinch. “By 2019 or 2020, specialty drugs are expected to represent 50% of plan sponsors’ overall drug spend,” Express Scripts reported. Doug Long, VP industry relations for IMS Health, called the effort to control specialty drug costs “the biggest challenge for managed care between now and the end of the decade.”

 

Matt Salo, EVP for the National Association of Medicaid Directors, recently expressed alarm over biotech cost spiral. “Medicaid as a payer is not equipped to be paying the types of prices we’re seeing,” he said. “We can’t do it. Something is going to have to change.”

 

Specialty medicines to treat oncology already account for the single-most expensive therapeutic class of pharmaceuticals in the United States, according to IMS Health, with 2013 sales for the category rising 9.2% to $27.9 billion. Specialty and biotech drugs to treat autoimmune diseases jumped 18% in 2013 to nearly $18 billion in U.S. sales, with total sales for the top 10 specialty treatment classes reaching $84.4 billion.

 

Pharmacy benefit managers are using different strategies to cope. CVS Health Corp., for instance, said in January it would give exclusive formulary status to Solvaldi for hepatitis C patients covered by its Caremark PBM, while Express Scripts announced it would give preferred status to AbbVie’s Viekira Pak over Solvaldi for hep-C patients covered under its plans.