Some factors behind rising drug costs
Prices of specialty drugs that treat complex or chronic conditions are one force behind higher and higher costs. Some of those drugs can cost up to $10,000 a month, or more.
It’s not only new-to-market drugs that contribute to the upward cost spiral. A study from the University of Pittsburgh showed that existing brand-name drugs are also pushing up overall costs.3 In many cases, drug manufacturers have patent protection that gives them exclusivity and the leeway to set their prices.
Manufacturers use advertising to help drive demand, even for drugs that treat an end-stage disease. Kaiser Health News reported that since 2012, spending on drug commercials has increased by 62 percent, with over $6 billion spent in 2016 alone.2
A new federal rule attempts to increase transparency in drug pricing and address ballooning costs. The rule requires drug manufacturers include in television commercials the list price of drugs that are covered by Medicare or Medicaid and cost $35 or more per month or for a usual course of treatment
There’s no magic remedy for rising drug costs, but there are ways to keep them in check through management, education, and advocacy.
Key strategies to manage costs
ConnectiCare works with Express Scripts, our pharmacy benefit manager (PBM), to help our members receive clinically effective, safe, and affordable prescription drugs. Here are some of the ways we do that:
Encourage use of generics and lower-cost alternatives.
Preauthorization requirements, step therapy, and quantity limits are some ways that health plans try to see that doctors (and patients) consider any lower-cost therapies first. In addition, pharmacists fill prescriptions with generic drugs when available and if appropriate, unless you or your doctor ask for the brand.
ConnectiCare encourages members to use preferred generic and brand-name drugs with lower cost shares. We also urge (and, if employers choose, can require) members to fill 90-day supplies of maintenance medicines to lower overall costs.
Monitor and manage medication adherence.
Not taking medicine – or “nonadherence” – contributes to higher health care costs through emergency room visits, hospitalizations, and complications. ConnectiCare partners with Express Scripts to work with members who are having problems taking their medicines every day.
If a member forgets to refill, for example, we may suggest using a pill, help a member sign up for 90-day refills, or suggest pharmacy pill packs to package each day’s medicine.
If cost is preventing members from taking their medicines, we may connect them with a benefit specialist who can recommend lower-price alternatives, lower-cost pharmacy options, or payment assistance programs.
Use alternative infusion sites.
Sometimes patients with complex illnesses need to be treated with drugs that are infused through a catheter into a vein. It used to be that infusion therapy was limited to hospitals. Today, it can often happen at home or in a free-standing infusion therapy center. These options are not only more convenient and comfortable for patients — they can also save money.
Give extra care and guidance to members taking specialty drugs.
Specially-trained pharmacists and nurses provide personalized care and guidance for members with chronic or complex conditions through our Specialty Rx management program, operated by Accredo. Conditions include diseases like hemophilia, multiple sclerosis, rheumatoid arthritis, and diabetes. The Accredo team helps see that members are monitored. It can also sometimes help members locate financial assistance programs.
What’s next?
Prescription drug costs will likely continue to rise. It’s predicted that overall prescription drug spending could reach 15-20 percent of total employer-related health plan costs.7 Curious to know if we can help you manage prescription drug costs and keep your members healthy? Let’s talk.
See also: “A three-pronged approach to help control prescription drug costs.”
SOURCES
- Kamal, Rabah; Cox, Cynthia; and McDermott, Daniel. “What are the recent and forecasted trends in prescription drug spending?” February 20, 2019
- Bruce Horovitz. “Prescription drug costs are on the rise; So are the TV ads promoting them” March 20, 2017. (Accessed July 13, 2019)
- University of Pittsburgh. “Rising drug prices linked to older products, no just newer, better medications” January 7, 2019
- Benita Lee. “How much does insulin cost?” September 21, 2018. (Accessed July 14, 2019)
- Joe Graedon. “Are prescription drug ads on TV driving you crazy?” July 3, 2017. (Accessed July 12, 2019)
- Express Scripts 2015 Drug Trends Report. Accessed July 12, 2019
- Express Scripts. “Improving adherence for complex conditions” January 16, 2018 (Accessed June 25, 2019)
About Jamie Reuter, PharmD, MBA, BCPS
Jamie Reuter, PharmD, MBA, BCPS, is vice president, enterprise pharmacy solutions. He is responsible for pharmacy services for members of EmblemHealth and ConnectiCare health plans. His experience spans practice in retail pharmacy, hospital, and critical care settings as well as teaching at the University of Maryland School of Pharmacy. Jamie received his Doctor of Pharmacy degree from the University of Toledo and a Master’s in Business Administration from the Carey School of Business at The Johns Hopkins University.
