Keeping you updated on the latest Medicare and Part D news

IMS Institute Study Finds Increased Spending On Specialty Drugs

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The IMS Institute for Healthcare Informatics found that specialty drugs drove a 3.2 percent increase in total prescription drug spending in 2013, to $329.2 billion. As blockbuster drugs face generic competition, drug companies have shifted their focus to specialty drugs, which treat more complex diseases such as cancer, inflammatory conditions, and multiple sclerosis. These drugs are used by smaller patient populations, which tends to make them more expensive (Gilead’s recently released $84,000 hepatitis C treatment is a strong example). 

According to the report,

“More than half of prescriptions cost patients, on average, less than $5 in out-of-pocket costs in 2013, and 86 percent of them were filled with generic medicines. Nearly a quarter of all prescriptions — 23 percent — required no out-of-pocket cost at all, an increase that the report’s authors attributed mainly to a requirement in the new health care law that contraceptive drugs be covered free.

On the other hand, those who need the costlier drugs paid disproportionately more. Only 2.3 percent of prescriptions accounted for 30 percent of all out-of-pocket costs.”

Similarly, Express Scripts reported that specialty drugs account for 27.7 percent of total drug spending, but make up less than 1 percent of all prescriptions. It also predicted that spending on specialty drugs will increase an additional 63 percent between 2014 and 2016. Faced with covering these expenses, health plans are placing specialty drugs into tiers for which beneficiaries’ are responsible for paying a percentage of the drug cost as opposed to a set co-payment.



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