U.S. Spending on Hepatitis C Medications to Skyrocket 1,800 Percent by 2016

 U.S. Spending on Hepatitis C Medications to Skyrocket 1,800 Percent by 2016

Express Scripts Report Forecasts Unsustainable Increases in Specialty Drug

PR Newswire

ORLANDO, Fla., April 8, 2014

ORLANDO, Fla., April 8, 2014 /PRNewswire/ -- Expensive treatments for broad
patient populations are driving unprecedented growth in U.S. spending on
specialty drugs to treat complex conditions such as rheumatoid arthritis,
multiple sclerosis and cancer, according to a new report issued today by
Express Scripts (NASDAQ: ESRX).

Express Scripts, St. Louis, Missouri.

As it has for the past two decades, the Express Scripts Drug Trend Report
quantifies annual changes in utilization, unit costs and overall prescription
drug spending, based on the pharmacy claims data from Express Scripts, the
nation's largest pharmacy benefit manager. Released this week at the company's
Outcomes Symposium in Orlando, the full report is available online at

While growth in specialty drug spend in 2013 – 14.1 percent – was at its
lowest point in the past six years, it is poised to go up significantly.
Express Scripts forecasts that the country's specialty-drug spend will
increase an additional 63 percent between 2014 and 2016.

Hepatitis C Treatments Will Become Cost-Prohibitive

The leading driver of the steep spending forecast for specialty medications is
hepatitis C, a disease affecting more than 2.7 million Americans. Due in part
to the introduction of a new therapy that costs $84,000 per a 12-week course
of treatment, Express Scripts forecasts that the U.S. will spend 1,800 percent
more on hepatitis C medications in 2016 than it did in 2013. No major therapy
class has experienced this high of a spending increase in the 21 years Express
Scripts has measured drug trend data.

"Never before has a drug been priced this high to treat a patient population
this large, and the resulting costs will be unsustainable for our country,"
said Steve Miller, M.D., chief, medical officer at Express Scripts. "The
burden will fall upon individual patients, state and federal governments, and
payers who will have to balance access and affordability in a way they never
have had to before.

"The current pricing mentality around innovative products is unprecedented and
unreasonable," said Dr. Miller. "Standing side-by-side with many of the
country's largest plan sponsors, we are going to drive toward a pricing
environment that is fair for patients, payers and manufacturers."

Specialty Medications: Increasing Costs for Small Patient Populations

While comprising less than one percent of all U.S. prescriptions, specialty
medications in 2013 for the first time accounted for more than a quarter (27.7
percent) of the country's total pharmacy spend.

  oThree specialty classes – inflammatory conditions, multiple sclerosis and
    cancer – accounted for 60 percent of total specialty spend in 2013.
  oTreatments for inflammatory conditions, such as rheumatoid arthritis and
    Crohn's disease, continue to rank as the most expensive specialty therapy
    class, driven by brand price inflation of 15 percent in 2013.
  oThe therapy class that saw the largest percentage increase in spending
    during 2013 (39.2 percent) was central nervous system disorders, which
    includes treatments for Huntington's disease, narcolepsy and Parkinson's

Traditional Medications: Diabetes is Costliest Drug Class for Third
Consecutive Year

Spending on traditional prescription drugs – primarily pills taken to treat
more common diseases such as high cholesterol and high blood pressure –
increased 2.4 percent in 2013.

  oWith an increase in spending of 14 percent in 2013, diabetes was the
    costliest drug class for the third consecutive year. Express Scripts
    forecasts spending on diabetes drugs to have double-digit annual rate
    increases over the next three years, driven by a new pipeline of
    medications as well as price inflation for existing brand medications.
  oSpending on compounded drugs more than quadrupled in 2013.
  oLargely due to the coverage mandate within the Affordable Care Act, cost
    shifting led payers to spend 30.7 percent more on contraceptives in 2013
    than in 2012.
  oSpending on anti-infective medication increased 6.2 percent in 2013, due
    in part to drug shortages and resulting price increases for doxycycline
    and tetracycline.
  oWith increased generic competition, spending in seven key therapy classes
    – high blood cholesterol, high blood pressure/heart disease, ulcer
    disease, asthma, depression, mental/neurological disorders and infections
    – is expected to decline in both 2014 and 2015.

Medicare: Spending Flat for Traditional Drugs, Slower Growth for Specialty

For Medicare Part D plans in 2013, spending on traditional drugs remained
flat, as an increase in utilization was offset by a decrease in unit cost.
Spending on specialty drugs increased 14.7 percent in 2013, decelerating from
a 24.1 percent increase in 2012.

  oDiabetes, high blood pressure and high blood cholesterol accounted for
    more than a quarter of total Part D spending. Through its Star Ratings
    system, the Centers for Medicare & Medicaid Services (CMS) is focused
    particularly on the appropriate care for patients with these three
  oThe costliest specialty condition for Part D in 2013 was cancer, followed
    by multiple sclerosis and inflammatory conditions.
  oConsistent with the commercially insured market, Part D spending on
    specialty conditions such as hepatitis C and central nervous system
    disorders is being driven by price inflation for medications that
    currently have little competition.

Medicaid: Most Vulnerable to Increasing Specialty Costs

Even in states not expanding their coverage per the requirements of the
Affordable Care Act, Express Scripts anticipates that the greater awareness of
Medicaid coverage is likely to have a dramatic effect on Medicaid prescription
drug spend in the future.

  oIn 2013, diabetes overtook asthma as the costliest therapy class for
    Medicaid programs.
  oHIV continues to be the costliest specialty therapy class for Medicaid
  oSpend on hepatitis C medications is expected to jump in 2014. Due to the
    greater prevalence of the disease among Medicaid beneficiaries, the high
    cost of the new therapies is expected to have an even more damaging impact
    for Medicaid programs.

About Express Scripts

Express Scripts (NASDAQ: ESRX) manages more than a billion prescriptions each
year for tens of millions of patients. On behalf of our clients — employers,
health plans, unions and government health programs — we make the use of
prescription drugs safer and more affordable. Express Scripts uniquely
combines three capabilities — behavioral sciences, clinical specialization and
actionable data — to create Health Decision Science℠, our innovative approach
to help individuals make the best drug choices, pharmacy choices and health
choices. Better decisions mean healthier outcomes.

Headquartered in St. Louis, Express Scripts provides integrated
pharmacy-benefit management services, including network-pharmacy claims
processing, home delivery, specialty benefit management, benefit-design
consultation, drug-utilization review, formulary management, and medical and
drug data analysis services. The company also distributes a full range of
biopharmaceutical products and provides extensive cost-management and
patient-care services.

For more information, visit Lab.Express-Scripts.com or follow @ExpressScripts
on Twitter.

David Whitrap
Office: 314-684-6514
Mobile: 314-517-3605

David Myers

Logo - http://photos.prnewswire.com/prnh/20080827/EXPRESSSCRIPTSLOGO

SOURCE Express Scripts

Website: http://www.express-scripts.com
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