Specialty Pharmacy

Specialty Pharmacy Spending Still Increasing, As New Drugs Make Big Splash

Reprinted from the July 2007 issue of SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, PBMs, providers and employers manage costs more aggressively and deliver biotechs and injectables more effectively.

Pharmacy benefit managers (PBMs) Express Scripts, Inc. and Medco Health Solutions, Inc. recently released drug trend reports for 2006, and specialty pharmacy continues to be a growing concern. According to an Express Scripts analysis of IMS Health data, 2006 U.S. specialty drug spend was $54 billion, or 20% of the overall prescription drug spend. The PBM also estimates that by 2010, specialty drug spend will represent 26% of the overall prescription drug spend - $99 billion.

In the Express Scripts 2006 Drug Trend Report, specialty drugs' per-member, per-year costs rose 21% from the 2005 level, as opposed to a 6% increase for non specialty drugs' PMPY costs. "I don't think anyone was surprised by how much the [specialty pharmacy] field is growing," says Steve Miller, M.D., chief medical officer for Express Scripts and vice president of that company's specialty pharmacy, CuraScript. However, he says, the study showed a few interesting findings.

First was the influence of new drugs on the drug trend. "Traditional oral solids have had a small impact, about .2%," on overall nonspecialty costs, he says. But new drugs' impact was responsible for more than 17% of the increase in specialty costs, according to the study.

Another finding Miller points to is "many of the new specialty drugs really are disease-altering therapies." Of note, he says, are Nexavar (sorafenib), for advanced renal cell carcinoma (RCC); Sutent (sunitinib malate), for advanced RCC and gastrointestinal stromal tumor (GIST); and Revlimid (lenalidomide), for myelodysplastic syndromes and multiple myeloma. Each had "very robust first-year sales, and each deserves it. They are great therapies," he contends.

In Medco's 2007 Drug Trend Report, specialty drugs accounted for 10.4% of plan spending on the pharmacy side, as opposed to the medical benefit, up from 9.7% in 2005. In 2006, utilization of specialty drugs increased 7.3%, and specialty spending grew 16.1%, from the 2005 levels.

Steve Russek, vice president of clinical product development for Accredo Specialty Services, a Medco company, expects the cancer category to grow in terms of utilization and cost. He points to the above-mentioned drugs, as well as Tykerb (lapatinib), for advanced breast cancer; Gleevec (imatinib mesylate), for chronic myeloid leukemia (CML) and GIST; and Sprycel (dasatinib), for CML and acute lymphoblastic leukemia, as "phenomenal products.…Many of these drugs are literally keeping people alive that would have few options" before, he says. Since all of these are oral drugs, "patients can maintain themselves," says Russek, and the drugs' ability to target tumors means patients can forgo many of the side effects caused by past therapies.

Miller says another point of interest is the growing "amount of growth hormones used by people over the age of 20." That class of drugs' No. 1 indication is growth retardation, he says, but the PBM saw "25% of the growth hormone prescriptions written last year were for people over the age of 20." The off-label use could be for malnutrition associated with AIDS wasting, as well as for weight loss and anti-aging efforts. The PBM is putting in place prior authorization so that it's not prescribed in areas where the data do not support its use, he says.

Also important, says Miller, is the "impact programs can have to hold down costs of specialty drugs." In numerous categories with competing products, steps such as a narrowed formulary and limited courtesy fills can bring cost savings. "Plan design can really make a difference," maintains Miller, who says the PBM works with plans that still have only two-tier copayment systems.

Miller also says the study showed a "remarkable intake of anti-inflammatories" for conditions like rheumatoid arthritis (RA), Crohn's disease, psoriasis, ankylosing spondylitis and lupus. A "tremendous amount of products coming down the pike for anti-inflammatories" should keep costs up in this category.

Medco's study also showed rapid RA spending growth, but Russek pointed out that the "still significant" 15.7% increase in drug trend (which correlates to plan cost) for 2006 is certainly down from the 47.7% drug trend in the PBM's 2005 numbers. "RA drugs are still a challenge for payers, who need to make sure they have utilization-management rules in place," he says.

Both studies showed a large decline in spending on hepatitis C treatments, which was due in large part to the availability of a generic, say Russek and Miller. "The impact of generics on specialty drugs is just as profound as it is on oral solids," contends Miller. Express Scripts' study showed an 8.3% decline in per-member, per-month cost from 2005 to 2006.

In the Medco study, Hepatitis C therapy showed a 10.8% decline in trend (plan cost) from 2005 to 2006, which was the result, it said, of a 9.5% decrease in utilization (days per eligible) and a 1.4% decline in unit cost (cost per day). Russek says the reduction in utilization may indicate patients who tried the therapy but found it unsuccessful, either due to side effects or lack of viral response.

Both Miller and Russek pointed to lupus as an area that payers should keep a close eye on. Russek said that "another group of drugs under payers' radar" is therapies for rare conditions. The recently released Soliris (eculizumab), which treats paroxysmal nocturnal hemoglobinuria, a condition affecting about 10,000 patients in North America and Europe, is one such drug — and it comes with a nearly $400,000 annual price tag. While statistically the odds are against a plan having one of these patients, says Russek, if you do, the impact can be tremendous. "Plans need to have utilization management programs in place to make sure these therapies are used for the right patient in the right amount," he says.

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