Super spending U.S. trends in high-cost medication use
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1 Super spending U.S. trends in high-cost medication use AN EXPRESS SCRIPTS REPORT OCTOBER 2017 Express Scripts 1
2 A NOTE FROM GLEN STETTIN, MD Senior Vice President, Clinical, Research & New Solutions Express Scripts Caring for the people whose needs are greatest We live in a fortunate time when science has delivered amazing therapies and made it possible for people with complex, chronic diseases to live a little more normal life. Over the past five years, 118 specialty treatments have come to market for these conditions, and the medication pipeline is rich, with about 25 new specialty drugs expected to receive approval each year for the next five years. We re also entering an era where customized gene therapies offer hope for a cure for serious cancers and other rare, fatal diseases. Because these therapies target small patient populations, are administered once and demonstrate premium outcomes, they will command premium prices. There s no limit on innovation in medicine, and that s a good thing for patients, physicians and payers. Yet, there is a limit on the financial resources available to pay for medicine. Our research identifies where the challenges are so we can address them proactively with plan sponsors. Express Scripts Caring for the people whose needs are greatest 2
3 Key findings: In 2015, we published our first report examining medication use among people with extraordinarily high annual prescription drug costs. We used this information to gain an understanding of this population and to help our clients better serve their unique needs. In this second edition, we examined how the vast changes that have occurred in our industry during the past two years have affected this population, and also explored generational differences. A few important takeaways: 1. A small but steadily growing number of Americans account for an increasingly significant amount of the nation s overall prescription drug costs. Almost 3 out of 1,000 people met or exceeded $50,000 in prescription drug costs a 35% increase from 2014 and accounted for more than 20% of total prescription drug costs.. This population was four times as common in Medicare plans than in employer-sponsored, Medicaid or exchange plans, with eight out of every 1,000 Medicare beneficiaries reaching $50,000 in prescription drug costs in Despite the increase in the size of this population, employers and Medicare plans held the increase in overall drug spending to just 3.8% and 4.1%, respectively, in 2016, demonstrating the effectiveness of private-sector solutions to make medicine more accessible and affordable. 3. Plans covered nearly 97.6% of the costs for people with prescription drug costs of $50,000 or more in 2016, paying an average of $89,308 per person. Medicaid covered 99.9%. Payers also kept members total out-of-pocket cost share relatively flat. In 2016, people with $50,000 or more in prescription drug costs had average annual out-of-pocket costs of $2,156 (2.4%), excluding patient assistance from manufacturers or foundations. 4. In 2014, compounded medications and new hepatitis C therapies drove much of the spending among people with $50,000 or more in annual prescription drug costs. In 2016, through our leadership in reducing drug costs, payers spent less on hepatitis C therapies, and spending on compounded medications which have safer and lower-cost OTC alternatives virtually disappeared from this population. Instead treatments for cancer, multiple sclerosis, inflammatory conditions, cystic fibrosis and other complex and rare diseases emerged as top cost drivers. In 2016, more than a quarter of the prescription drug costs for people with $50,000+ in prescription drug costs were for cancer drugs. Express Scripts Caring for the people whose needs are greatest 3
4 Rare yet familiar At a fraction of a percent of all Americans, this population may seem small. Yet every person in America is on a first-name basis with at least one or more people who have annual drug costs that are nearly the same amount as the median U.S. household income. They are our relatives, our friends and our colleagues. For this population, affordable access requires increased competition, more responsible pricing and more common-sense policies that put medicine within reach of patients. Providing for the $50,000+ population While there s more to do to make costly treatments more affordable, we re working with payers to pull all available levers for managing spend in other areas to create headroom for covering patients who need more costly therapies. This includes effectively managing utilization, leveraging competition within formularies, providing greater care and clinical support, and embracing new strategies for reimbursement. Addressing the challenges of this population is the reason we created Express Scripts SafeGuardRx. These unique programs deliver specialized care for patients while reducing risk and increasing savings for plans. Many of the programs also include guaranteed reimbursement for plans if patients discontinue treatment early due to issues with medication efficacy or tolerance, including: Multiple Sclerosis Care Value Program SM (starting Jan. 2018) Addresses high rates of discontinuation in this class and improves adherence with guaranteed early discontinuation reimbursement and best-in-class care. Inflammatory Conditions Care Value Program SM Manages this class at the indication level, enabling price competition among clinically equivalent medications, which helps control costs and ensures access to effective treatment. Oncology Care Value Program Aligns drug costs with health outcomes and guarantees reimbursement for plans if patients discontinue therapy early due to low efficacy of a particular medication for their cancer or intolerable side effects. Hepatitis Cure Value Program Delivers a 96% cure rate nearly every hepatitis C patient who completes therapy sees an optimal outcome at a substantially lower cost, which helps payers avoid rationing access. Express Scripts Caring for the people whose needs are greatest 4
5 These SafeGuardRx programs are anchored by high-touch care from our Accredo specialty pharmacy. Accredo specialist pharmacists provide customized, one-on-one care to patients, and help patients achieve market-leading adherence rates and improved health outcomes. Paying for the treatment of complex and rare conditions is the greatest challenge for organizations who know their plan members rely on them for life-saving therapy. The findings of this report underscore the importance of seizing every opportunity to improve affordability for patients and for plans. As new innovations come to market, it will require resourceful solutions to pay for them. At Express Scripts, we re getting ahead of the new challenges created by medication breakthroughs to ensure plans and patients are ready for the promises of this ever-evolving pipeline. Glen Stettin, M.D. Express Scripts Caring for the people whose needs are greatest 5
6 HOW TO USE THIS REPORT Click on to share insights Click on to see expanded information, including tables Click on to exit expanded information Major cost drivers The percent of plan members with $50,000 or more in prescription drug costs climbed to 0.3%, a 35% increase since we last reported in While only a tiny population, this group accounted for 21.3% of total prescription drug costs in By contrast, 82.6% of all plan members had prescription drug costs of less than $1,000 in 2016, including 31.8% members who had no spending at all. In this report, costs or spend refer to total pharmaceutical costs net of rebates, which is the combination of plan costs and patient out-ofpocket costs for prescription medications, net of rebates. It excludes manufacturer coupons, patient assistance programs or foundational assistance, which are used by many in the population with prescription drug costs of $50,000 or more. Plan population by prescription drug costs PERCENT OF TOTAL MEMBERS AND TOTAL RX COSTS Percent of total members Percent of total s 0.3 $50, $10,000-$49, $5,000-$9, $1,000-$4, Less than $1, No s 0 Express Scripts Major cost drivers 6
7 Percent paid by the plan for people with $50,000+ in s in 2016: Commercial: 97.7% Medicare: 97.1% Medicaid: 99.9% Health exchange: 97.3% Prescription drug costs by plan type The proportion of people with annual prescription drug costs of $50,000 or more varied by plan type. Medicare plans had four times the prevalence, with eight out of every 1,000 members meeting this cost threshold compared to commercial, health exchange and Medicaid plans, with two per 1,000 members. The percent of total prescription drug costs for people with $50,000 or more in prescription drug costs increased in each of the last three years for each plan type. For health exchange plans, this population accounted for a slightly higher proportion of prescription drug costs (22.3%) relative to Medicare (22.0%) and Medicaid (19.1%) plans. For all people with $50,000 or more in 2016 prescription drug costs, the majority of costs were borne by the employer, health plan or government entity. Employers and commercial health plans paid 97.7% of the prescription drug costs, similar to the portion paid by Medicare and exchange plans. Medicaid plans paid 99.9%. Under federal policy, Medicaid and Medicare beneficiaries are not eligible for manufacturer-funded assistance programs. Our data did not include the medication costs that are part of Medicare Part B or billed through the medical benefit. Percent of total prescription drug costs BY RX COSTS AND PLAN TYPE, % Commercial $0-$49,999 $50, Medicare Medicaid Health exchange Express Scripts Major cost drivers 7
8 Patient out-of-pocket costs On average, people with $50,000 or more in prescription drug costs paid $2, annually out of pocket (OOP), compared to $ OOP for those with prescription drug costs of $49,999 and less. For the $50,000+ population, OOP cost as a percent of total prescription drug costs remained relatively flat (from 2.2% to 2.4%), while decreasing slightly from 17.5% to 16.8% for the $0-$49,999 population. This analysis did not include manufacturer coupons or patient assistance programs that further reduce OOP costs. Average paid for people with $50,000+ in s in 2016: $89,308 Paid by plans $2,156 Paid OOP by patients Average annual plan and out-of-pocket costs for prescription drugs BY RX COSTS PER PATIENT, $ 1,400 1,200 1,000 $0-$49, % 17.0% 16.8% $ 90K 80K 70K 60K 50K $50, % 2.2% 2.4% Plan costs Patient OOP costs K 30K 20K 10K For all patients with prescription drug costs over $50,000, 97.6% of costs are paid for by plans. By more effectively managing the pharmacy benefit for people across all cost levels, plans are able to cover people who need high-cost and complex therapies. Express Scripts Major cost drivers 8
9 Geographic variation People with prescription drug costs of $50,000 or more vary by geographic region across the U.S. In 2016, the age- and gender-adjusted population with $50,000 or more in prescription drug costs averaged a high of 33 per 10,000 in the northeast region compared to a low of 24 per 10,000 in the west region. Among individual states, Washington, D.C., New Jersey and Pennsylvania had the highest totals. Hawaii had the lowest. Number of people with $50,000+ in prescription drug costs BY STATE AND REGION, PER 10,000, Number of patients adjusted for age and gender Express Scripts Major cost drivers 9
10 Identifying which conditions contribute most to prescription drug costs helps to pinpoint opportunities for better patient care. Therapy classes For people with $50,000 in prescription drug costs in 2016, more than 25% of costs were for oncology drugs, followed by drugs to treat multiple sclerosis, inflammatory conditions and hepatitis C. On average, this population is treated for twice as many chronic conditions as people below the $50,000 cost threshold. Note that all the top therapy classes are for specialty medications, except for pain/inflammation. Top therapy classes by prescription drug costs FOR PEOPLE WITH $50,000 OR MORE IN RX COSTS, 2016 Hereditary angioedema Pain/ inflammation HIV Inflammatory conditions Multiple sclerosis 18.3% 11.6% 18.3% Oncology 25.6% 23.2% Sleep disorders Cystic fibrosis 2.9% 25.5% Pulmonary hypertension 3.0% Hepatitis C 10.6% 11.4% Express Scripts Therapy classes 10
11 Patient drug costs: $50,000-$99,999 Among people with $50,000-$99,999 in prescription drug costs, 31% of total prescription drug costs was for multiple sclerosis (MS) medications. Other major therapy classes for this group includes inflammatory conditions, oncology and hepatitis C. Top therapy classes by prescription drug costs FOR PEOPLE WITH $50,000-$99,999 IN RX COSTS, 2016 Multiple sclerosis PATIENT PROFILE Inflammatory conditions 18.8% 22.9% Oncology 14.9% 14.8% Hepatitis C 11.3% 11.1% Multiple sclerosis 31.2% 32.6% Pain/ inflammation Pulmonary hypertension HIV 2.5% Diabetes 1.9% Idiopathic pulmonary fibrosis Growth deficiency Express Scripts Therapy classes 11
12 Patient drug costs: $100,000-$199,999 For people with $100,000-$199,999 in prescription drug costs, oncology medications accounted for the majority of prescription drug costs (almost 53%). Costs for hepatitis C, pulmonary hypertension, sleep disorders and inflammatory conditions completed the top five. Top therapy classes by prescription drug costs FOR PEOPLE WITH $100,000-$199,999 IN RX COSTS, 2016 Oncology PATIENT PROFILE Pulmonary hypertension 4.7% Hepatitis C 11.5% 12.6% Oncology 52.7% 54.8% Inflammatory conditions 2.8% Multiple sclerosis 2.3% Pain/ inflammation Sleep disorders 4.5% Cystic fibrosis 1.8% Immune deficiency 1.8% Endocrine disorders Express Scripts Therapy classes 12
13 Patient drug costs: $200,000-$499,999 People with prescription drug costs of $200,000-$499,999 are being treated for a variety of severe conditions including pulmonary hypertension and inherited conditions such as cystic fibrosis (CF), hemophilia and hereditary angioedema (HAE). Treatments for these conditions are not only expensive but also extremely complex. With total prescription drug costs averaging $286,916, this population relies heavily on their employers, health plans and/or government to ensure they have access to the medication therapy they need to survive. Top therapy classes by prescription drug costs FOR PEOPLE WITH $200,000-$499,999 IN RX COSTS, 2016 Cystic fibrosis PATIENT PROFILE Cystic fibrosis 19.6% 20.8% Pulmonary hypertension 8.5 % 9.4% Hereditary angioedema 3.1% Pain/ inflammation 3.4% Oncology 13.9% 17.9% Enzyme deficiencies 4.6% Hemophilia 4.9% Immune deficiency 3.5 % CNS/ autonomic disorders 5.6% Hepatitis C 8.3% 10.0% Express Scripts Therapy classes 13
14 Patient drug costs: $500,000-$999,999 For people with $500,000-$999,999 in prescription drug costs, medications used to treat severe congenital conditions account for more than half of total prescription drug costs. Hemophilia drugs contribute the most to costs at 22.9%, followed by hereditary angioedema and central nervous system disorders. Prescribing hemophilia drugs prophylactically to prevent long-term and often debilitating tissue damage contributes to the high cost of these medications, as patients need higher and more frequent doses as they age. Top therapy classes by prescription drug costs FOR PEOPLE WITH $500,000-$999,999 IN RX COSTS, 2016 Hemophilia PATIENT PROFILE Enzyme deficiencies 10.6% 10.7% GI disorders 3.2% Blood modifying 4.5% Misc. conditions 4.2% Pain/ inflammation 5.3% Endocrine disorders Urinary disorders 4.1% Hereditary angioedema 19.1% 18.8% Hemophilia 22.9% 21.5% CNS/ autonomic disorders 12.6% 13.8% Express Scripts Therapy classes 14
15 There are twice as many people with at least $1 million in s compared to $1 million patients: No longer one in a million The prevalence of patients requiring $1 million in prescription drug costs doubled between 2014 and In 2014, only one person for every million members covered under the pharmacy benefit had prescription drug costs of $1 million or more. In 2016, there were two people with at least $1 million in prescription drug costs per one million members. In 2016, half of the people in this cost category were being treated for hereditary angioedema (HAE) a lifelong and life-threatening condition. Most people with HAE and at least $1 million in costs are using specialty therapies prophylactically to prevent sudden and severe attacks. As new drugs are approved for prophylactic use, plans are anticipating that competition in the category could help lower prices. Other common conditions in this population include various and very rare enzyme deficiencies, such as urea cycle disorders, rare anemias/blood factor deficiencies and hemophilia. Patients often require additional care to help them navigate challenges and manage their treatment. People in this highest category of prescription drug costs exist across multiple generational groups, including the Greatest Generation in People with $1 million in prescription drug costs PERCENT BY GENERATION, % Children (2004 or later) Millennials ( ) Gen Xers ( ) Baby Boomers ( ) Greatest Generation+ (1945 or earlier) Express Scripts $1 Million dollar patients 15
16 Top therapy classes by prescription drug costs FOR PEOPLE WITH $1 MILLION+ IN RX COSTS, 2016 Hereditary angioedema 58.4% 50.8% Hereditary angioedema PATIENT PROFILE Hemophilia 14.7% 15.3% GI disorders Endocrine disorders Blood modifying 1.8% Enzyme deficiencies 22.3% 28.8% Express Scripts $1 Million dollar patients 16
17 Baby Boomers accounted for nearly half of all members with annual prescription drug costs of $50,000+ in Generational differences For people with $50,000 or more in prescription drug costs, there are differences in the top three therapy classes by generation. For the relatively few children and millennials meeting this cost threshold in 2016, the costliest therapies were for congenital conditions diagnosed early in life. Specifically, conditions such as cystic fibrosis (19.8%), hemophilia (14.6%), seizures (14.1%) and growth deficiency (5.9%), accounted for the largest proportion of prescription drug costs in children. For millennials in this $50,000+ population, the largest share of costs was for cystic fibrosis drugs (16.9%). Among Generation X patients in the $50,000+ population, spending for multiple sclerosis medications was highest (29.8%), followed by oncology and hepatitis C. As a percent of total prescription drug costs for people with costs of $50,000 or more, spending on hepatitis C medications is highest among Gen Xers and Baby Boomers, as many individuals were infected between 1970 and 1990, before universal screenings of the blood supply were adopted. Oncology drugs control the most spend among members of the Greatest Generation and older, contributing 57.6% of the costs for people with $50,000+ in prescription drug costs in People with $50,000+ in prescription drug costs BY GENERATION, % Children Millennials Gen Xers Baby Boomers Greatest Generation+ $1 million+ $500,000-$999,999 $200,000-$499,999 $100,000-$199,999 $50,000-$99,999 Express Scripts Generational differences 17
18 Top therapy classes for people with $50,000+ in prescription drug costs BY GENERATION AND PERCENT OF TOTAL DRUG COSTS, 2016 Cystic fibrosis % Children Hemophilia Growth deficiency Seizures Millennials Cystic fibrosis Inflammatory conditions Multiple sclerosis Hemophilia Gen Xers Multiple sclerosis Inflammatory conditions Oncology Hepatitis C Baby Boomers Oncology Multiple sclerosis Hepatitis C Inflammatory conditions Greatest Generation+ Oncology Inflammatory conditions Pulmonary hypertension Multiple sclerosis Note: All of these top therapy classes require specialty medications. Express Scripts Generational differences 18
19 Methodology From a sample size of more than 26 million commercially insured, Medicare, Medicaid and health exchange beneficiaries per year, this research examined 134,008 individuals with extraordinarily high annual medication expenses paid under their pharmacy benefit. Nearly all of this population suffers from rare diseases and other conditions for which treatment options are severely limited. We analyzed prescription drug use data for members of plans with drug coverage managed by Express Scripts. Plans providing the pharmacy benefit paid at least some portion of the cost of medications dispensed to members, known as a funded benefit. The data includes both traditional and specialty drugs. All therapy classes in this report are for specialty medications, except for pain/inflammation. Specialty medications include injectable and noninjectable drugs typically used to treat chronic, complex conditions. They may have one or more of the following qualities: frequent dosing adjustments or clinical monitoring; intensive patient training and compliance assistance; limited distribution; and specialized handling or administration. Nonprescription medications (with the exception of medical supplies billed under the pharmacy benefit) and prescriptions that were dispensed in hospitals, long-term care facilities and other institutional settings or billed under the medical benefit are not included. When noted, some measures are calculated separately for those members with commercial insurance coverage, for Medicaid recipients and for Medicare beneficiaries receiving prescription benefits through Employer Group Waiver Plans (EGWPs), managed Medicare Prescription Drug Plans (PDPs) or Medicare Advantage Prescription Drug Plans (MAPDs). Costs or spend refer to total pharmaceutical costs net of rebates, which is the combination of plan costs and patient out-of-pocket costs for prescription medications, net of rebates. It excludes manufacturer coupons, patient assistance programs or foundational assistance. Generation groups were based on birth year using ranges found in popular culture publications: Children (2004 or later), Millennials ( ), Gen Xers ( ), Baby Boomers ( ) and Greatest Generation+ (1945 or earlier). 13 Although up to nine decimal places were allowed in making all calculations, in most cases the results were rounded down to one or two decimals for easier reading. Therefore, dollar and percentage calculations may be vary slightly due to rounding. Express Scripts Methodology/References 19
20 References 1. Dilokthornsakul P, Valuck RJ, Nair KV, Corboy JR, Allen RR, Campbell JD. Multiple sclerosis prevalence in the United States commercially insured population. Neurology ;86(11): National Multiple Sclerosis Society. Multiple Sclerosis FAQs. nationalmssociety.org/what-is-ms/ms-faq-s. Accessed Sept. 28, Marrie RA, Elliott L, Marriott J, Cossoy M, Blanchard J, Leung S, Yu N. Effect of comorbidity on mortality in multiple sclerosis. Neurology. 2015;85(3): Accessed Sept. 28, Greeke EE, Chua AS, Healy BC, Rintell DJ, Chitnis T, Glanz BI. Depression and fatigue in patients with multiple sclerosis. J Neurol Sci. 2017;380: doi: /j.jns Feinstein A, Pavisian B. Multiple sclerosis and suicide. Mult Scler. 2017;23(7): Accessed Sept. 22, Kalson-Ray S, Edan G, Leray E; SURVIMUS Study Group. An excessive risk of suicide may no longer be a reality for multiple sclerosis patients. Mult Scler. 2017;23(6): doi: / Miller KD, Siegel RL, Lin CC, et al. Cancer treatment and survivorship statistics, CA Cancer J Clin Jul;66(4): National Center for Health Statistics. Leading causes of death. gov/nchs/fastats/leading-causes-of-death.htm. Last updated March 17, Accessed. Sept. 25, Medscape. Cystic Fibrosis Clinical Presentation. com/article/ clinical. Last updated July 31, Accessed Sept. 28, Cystic Fibrosis Foundation Cystic Fibrosis Foundation Patient Registry highlights. Registry/2016-Cystic-Fibrosis-Foundation-Patient-Registry-Highlights.pdf. Accessed Sept. 22, Centers for Disease Control and Prevention. Hemophilia. Data and statistics. Last updated July 11, Accessed Sept. 22, US Hereditary Angioedema Association. HAE disease. Why is diagnosis important? Accessed Sept. 22, Here Is When Each Generation Begins and Ends, According to Facts. The Atlantic. Accessed August 23, Express Scripts Methodology/References 20
21 Express Scripts and E logo are trademarks of Express Scripts Holding Company and/or its subsidiaries. All other trademarks are property of their respective owners Express Scripts Holding Company. All Rights Reserved. 17-EME42490
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