A new report from the largest pharmacy benefit management firm in the United States revealed that spending on prescription drugs for insured Americans went up about 5.2 percent last year, pushed by both higher prices and greater medication use.
The report is based on 85 million insured patients' prescription drug spending, which is provided by employers, state and local governments, unions, and Affordable Care Act insurance exchanges.
Express Scripts Holding Co. said on Monday that the rise is mainly seen in very expensive drugs called specialty medicines, which includes new treatments for Hepatitis C and older drugs for multiple sclerosis and rheumatoid arthritis. The use of these medications rose to 7 percent, coupled with an 11 percent increase in unit cost.
The annual spending report included the impact of rebates for the first time, shaving 2.7 percent points off spending growth. The 2014 report did not include rebates, but revealed a 13 percent increase in spending.
The new report also found that the average price of brand-name drugs on the market grew by 16.2 percent in 2015 and has jumped 98.2 percent since 2011. One-third of the brand-name drugs experienced price increases surpassing 20 percent last year.
Rising drug prices, which are part of an overall rise in healthcare spending, has become a national issue as consumers push back on higher bills. In fact, the 2015 price hikes came despite intense criticism from politicians and patients.
Additionally, Express Scripts expects drug spending to increase by 6.8 percent this 2016, 7.3 percent in 2017 and 8.4 percent in 2018. This drug trend, however, does not bode well for government health programs and insurers who are trying to hold down medication costs.
The company's chief innovation officer, Dr. Glen Stettin, said clients have been dealing with "significant challenges to affordable care" last year, including the emergence of newly approved and high-cost therapies. In fact, the Food and Drug Administration (FDA) granted approval to 33 specialty drugs in 2015, most of them for cancer.
Still, the boost in drug spending was moderated by patients switching to generic drugs, the report said. What's more, an increase in spending that is more than the inflation rate counts as good news, especially since headlines in 2015 were about the escalating prices of drugs, said Stettin.
Photo : Tax Rebate | Flickr