Express Scripts Predicts Lower Drug Spending, but Says Biosimilar Savings Won't Contribute Until 2020

Express Scripts said this week it expects US drug spending to rise about 2% over the next 3 years, lower than projected inflation rates.

However, a lack of competition will affect 2 of the costliest categories of pharmaceuticals—inflammatory conditions and diabetes—between 2019 and 2021, Express Scripts said in its annual drug trend report. Biosimilar savings for rheumatoid arthritis and other inflammatory conditions will not begin to show up in earnest until 2020, the company said, so cost increases for brand-name drugs will continue.

In diabetes, competition for sitagliptin (Januvia) generics will not become available until 2023. The aging population as well as the increase in obesity will continue to drive usage of diabetes medications, the report said.

In another category, multiple sclerosis, pharmaceutical spending declined in 2018 but may reverse in the next 3 years, Express Scripts said, due to a market shift as patients switched from an older medication, dimethyl fumarate, to a biologic: ocerelizumab.

The pharmacy benefits manager (PBM), which recently merged with Cigna, also touted the fact that its commercial clients saw a spending increase of just 0.4%, which the company said was a 25-year low. Half of the plans decreased drug spending in 2018, up from 44% the year before.

Spending on specialty drugs rose 9.4%, mostly due to better access to therapies, the company said. Spending on traditional, non-specialty medications fell 5.8%.

The company cited its value-based care program for helping to achieve lower increases, and said plans enrolled in the program performed better than traditional plans. As one example, it said plans using its diabetes care management program spent 4.3% less in 2018 even as utilization went up; plans not enrolled spent 7.5% more.

Despite list price inflation of 7.3% for the most commonly used traditional brand medications in 2018, drug costs for traditional drugs fell by 6.5% for employer-sponsored plans, 5.5% for Medicare plans, and 5.6% for exchange plans.

Inflammatory drugs comprised the costliest therapy class for the third year in a row, costing employers $174.45 per member per year, up 14%. Diabetes came in second at $114.85 per member per year, an increase of 4.1%. Spending on insulin, which accounts for 15.3% of diabetes prescriptions, increased just 0.3% in 2018, with a 1.5% decline in unit costs and a 1.8% rise in utilization. In 2018, patients paid 16.9% of total insulin costs, an average of $43.19 per prescription, up $3.33 from 2017.

The Express Scripts report was released the day after President Trump’s State of the Union address, in which he promised once again to lower drug prices, and the same week that HHS Secretary Alex Azar made the rounds at various health policy conferences vowing to bring an end to rebates in an effort to create a more transparent pricing system. Last week, HHS released a rule that, if enacted, would block rebates and discounts given to PBMs, Part D plans, and Medicaid managed care organizations