Survey: Prescription drug trends to increase by double-digits

NEW YORK — Health benefit plan cost trend rates for 2016 will increase for most medical plan options and increase substantially for prescription drug coverage to double-digit rates, according to forecasts compiled in the 2016 Segal Health Plan Cost Trend Survey, Segal’s nineteenth annual survey of health plan cost trends. Trend is the forecast of annual gross per capita claims cost increases.



“Whether it is new high-tech surgical or diagnostic procedures replacing lower-cost options, or extremely high-cost specialty biotech drugs growing in popularity, plan sponsors still face significant challenges to manage medical plan cost trends to more sustainable long-term levels,” said Edward Kaplan, National Health Practice Leader at The Segal Group. “Plan sponsors have already put cost-management strategies, such as adding narrower provider networks and using specialty pharmacy management, into place.”



Other prescription drug coverage findings included:

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      Trend rates for prescription drug coverage are expected to be significantly higher in 2016: 11.3% for carve-out coverage for actives and retirees under age 65 years and 10.9% for retirees ages 65 years and over. Both projections are roughly 3 percentage points greater than projections for 2015.


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      The projected specialty drug/biotech drug cost trend rate is expected to remain high at 18.9%, but slightly lower than the projection for 2015.


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      Price inflation for prescription drugs and hospital stays are the overwhelming driver of cost increases, especially for prescription drugs, where trend is approaching double digits (9.8%).

The Segal survey included data from managed care organizations, health insurers, pharmacy benefit managers and third-party administrators. For complete survey results, click here.