There may be a “new normal” for the segment of Americans shouldering astronomical prescription drug costs, a study by Express Scripts reveals.
Between 2014 and 2016, the number of people with annual medication costs of $50,000 or more jumped 35%, and in 2016 about three out of every 1,000 people accounted for over 20% of total pharmacy spending, according to the Express Scripts report “Super Spending: U.S. Trends in High-Cost Medication Use.”
Extending that data to the U.S. population, an estimated 870,000 Americans constituted $80 billion of the 2016 U.S. pharmacy spend, reckoned the report, which gauged trends for people with commercial, Medicare, Medicaid and Health Insurance Exchange coverage who had annual medication costs at or topping $50,000 last year.
From 2014 to 2016, the percentage increase in the population with yearly prescriptions costs of $50,000 to $99,999 surged 40%, compared with gains of 36% for $100,000 to $199,999 in costs, 56% for $200,000-$499,999 in costs, 85% for $500,000-$999,999 in costs and 100% for $1 million or more in costs.
Conversely, about 83% of people in the analysis — which examined the prescription drug claims for more than 26 million Americans with pharmacy coverage — generated less than $1,000 in annual drug costs in 2016, including 32% with no drug costs.
“At a fraction of a percent of all Americans, this population may seem small. However, every person in America is on a first-name basis with at least one other person — a relative, friend, or colleague — who has annual drug costs that are nearly the same amount as the median U.S. household income,” reported Glen Stettin, senior VP of clinical, research and new solutions at Express Scripts.
In 2014, compounded medications and new hepatitis C therapies drove much of the spending among people with $50,000 or more in annual pharmacy costs. However, treatments for cancer, multiple sclerosis, inflammatory cystic fibrosis and other complex and rare diseases have emerged as the more prominent conditions in this population.
Last year, more than a quarter of the medication costs for patients reaching or exceeding the $50,000 threshold were for cancer treatments, Express Scripts noted.
“The good news is much of the spending at these levels is focused on treatments for rare and serious complex conditions with limited treatment options,” Stettin noted. “As we help payers effectively manage utilization and leverage competition, we create the headroom necessary to afford more costly therapies, as we saw with our commercial and Medicare plans that held year-over-year drug spending to just 3.8% and 4.1%, respectively, in 2016.”
Baby Boomers — those ages 53 to 71 — accounted for roughly half of all Americans with annual pharmacy costs at or above $50,000 in 2016, followed by Generation X (ages 34 to 52), who represented a quarter of that population, according to the study. Cancer, multiple sclerosis, inflammatory conditions and hepatitis C treatments were the leading spend drivers for both generations.
“Employers, insurers and government payers, who absorb 98% or more of the costs, still need relief when it comes affording to care for this [high-cost] population,” Stettin added. “Lowering costs will require new entrants in categories with limited competition, more responsible pricing for these rare and complex therapies, and potentially different reimbursement strategies.”