Specialty Pharmacy Costs Continue to Rise
The specialty pharmacy industry has seen a significant increase in drug spending in recent years according to a new study from the Blue Cross Blue Shield Association (BCBSA). Will the dramatic increases impact you?
According to BCBSA’s report, “The Growth in Specialty Drug Spending from 2013 to 2014,” specialty pharmacy spending increased by $87 per member, or 26%. The primary reason for the increased spending is the rising cost of specialty drug treatments. In 2013, spending totaled approximately $14.6 billion for the top 15 drug categories. In 2014, that increased to $18.4 billion. The largest spending increase was in hepatitis, which was up 612% and accounted for $29 of the $87 annual per-member increase.
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Drugs covered under pharmacy benefits increased at a higher rate compared to those covered under medical benefits, but this is primarily because more drugs, such as the many new oral and self-injectable medications, are being covered under pharmacy benefits. In addition, health plans are moving “medications billed through medical benefit to pharmacy benefit in order to improve management of these medications,” according to the report. Apparently, when drugs are billed through pharmacy benefits, comparing treatment options and controlling costs is easier and more effective.
For patients with individual market health insurance plans, annual spending was 17% higher than for those with employer health insurance in 2014. The treatment costs for both patients actually was similar, but the difference in spending came from utilization rates, which was higher for individual members for cancer, HIV, and hepatitis. On the other hand, utilization was higher for multiple sclerosis and inflammatory conditions among patients with employer coverage.
Dr. Trent Haywood, chief medical officer for BCBSA, noted in a press release that these price increases affect everyone, from patients and physicians to healthcare companies, employers, and taxpayers. And it’s not likely to improve anytime soon because, according to the report, the $87 billion spent in 2012 is estimated to reach approximately $350 billion by 2020. However, Dr. Haywood added, competition and expanded choices could help “… bring costs down for everyone …. There also should be transparency regarding the pricing of prescription medicines with information about price and a drug’s effectiveness made widely available to the public.”
The Growth in Specialty Drug Spending from 2013 to 2014; http://www.bcbs.com/healthofamerica/Specialty-Rx-HoA-Report.pdf
Blue Cross Blue Shield Association Examines the Growing Costs of Specialty Pharmacy; http://www.bcbs.com/healthcare-news/bcbsa/bcbsa-examines-the-growing-costs-of-specialty-pharmacy.html