Specialty Biotech Drug Spending Skyrockets

Newswise — Spending on America's most popular class of biotech drugs " those used to treat inflammatory diseases " increased 33.9 percent in 2005, according to the 2006 Express Scripts Specialty Drug Trend Report. The company is one of the nation's largest managers of pharmacy benefit plans, serving more than 55 million people.

Although the class includes only four drugs -- the injectable biologics Enbrel®, Humira®, Kineret® and Remicade® " it accounts for more than 19 percent of total specialty drug spending within the pharmacy benefit on a per member per year basis. Each prescription costs an average of $1,417. One medication, Enbrel®, accounted for more than 75 percent of this cost and 77 percent of prescriptions.

Earlier and longer treatment for inflammatory diseases such as rheumatoid arthritis increased utilization by 24.5 percent, making greater use the biggest factor in spending growth for the class. Additional uses beyond treatment of rheumatoid arthritis also drove utilization, for example, an Enbrel® indication for treating psoriasis, also drove utilization.

The Express Scripts Specialty Drug Trend Report is based on specialty drug spending administered through the pharmacy benefit. This excludes specialty pharmacy spending in the medical benefit, such as drugs administered in physician offices or other therapies that have traditionally fallen into the medical benefit. To improve accuracy, lives and spend for plans beyond two standard deviations from the mean were also excluded.

Developments involving other popular biotech drug classes include:

"¢ An 11.7 percent increase in per-prescription costs was the key drug trend driver for multiple sclerosis drugs, the second leading specialty therapy class.

"¢ Spending on drugs used to treat blood clotting conditions like hemophilia increased 25 percent, largely due to an increase in dosage units dispensed per prescription. Annual treatment costs about $100,000 per patient.

"¢ For specialty cancer-treating antineoplastics administered outside physician offices, the price per prescription rose by 15.6 percent to nearly $1,600 on average, making inflation the primary driver of a 19.2 percent drug trend for the class.

"¢ Similarly, a price per prescription increase of 6 percent for drugs used to treat anemia, often as an adjunct to chemotherapy, was the primary factor in a drug trend of 10.5 percent.

"¢ A 10 percent utilization increase drove trend for growth hormone replacement products. Contributing to the increase have been advances in screening and test design.

"¢ Two classes " specialty antivirals and infertility drugs " experienced trend declines of 6.7 and 3.9 percent respectively, largely due to decreases in utilization.

"¢ Drug trend for anticoagulants rose 21.4 percent in 2005. However, possible Food and Drug Administration (FDA) development of a regulatory approval process and subsequent approval of a generic alternative to Lovenox® could reduce future costs. Lovenox® is the dominant drug in the class, accounting for a 90 percent market share.

Sponsors of pharmacy benefit plans are finding success in their efforts to contain potentially enormous specialty pharmacy costs that could reach $90 billion or 28 percent of all pharmacy spending by 2009.

The 2006 Express Scripts Specialty Drug Trend Report notes greater use of specialty pharmacy by clients, which increased 77 percent in 2005. This is concurrent with reduced use of traditional home delivery by 30 percent and local pharmacies by 2 percent, measured on a volume basis.

"Enhanced patient-care models and management programs offered by specialty pharmacies encourage therapy adherence, helping to improve outcomes while reducing overall treatment costs," said Steve Miller, MD, chief medical officer of CuraScript, Express Scripts specialty pharmacy subsidiary.

According to the 2006 Express Scripts Specialty Drug Trend Report, patients taking medications for multiple sclerosis and receiving their medications through other specialty, local or home delivery were 34 percent, 43 percent and 40 percent less likely to remain on therapy, respectively, compared to patients receiving their medications exclusively through the CuraScript specialty pharmacy. Similar results were reported for rheumatoid arthritis patients.

Plan sponsors have also found that limiting the size of pharmacy networks used to dispense specialty drugs can significantly reduce costs. Express Scripts observed a 55 percent increase in lives participating in exclusive or limited networks. On average plans that implement an exclusive network save 10 percent. Consolidation of specialty drug spending also enabled better management.

Increasingly, plan sponsors are also developing specialty formularies, which limit the number of covered or preferred drugs. A pharmacy and therapeutics committee, consisting of independent physicians, reviews such formularies to ensure clinical soundness.

Subsequently, because the average number of specialty drugs per specialty class is 4.8, it is possible to choose lower priced drugs for inclusion in the formulary. According to the 2006 Express Scripts Specialty Drug Trend Report, a sampling of clients who use formulary management shows a narrowing of many formulary drugs in 13 of the 17 specialty therapy classes.

Plan sponsors are also finding that utilization management programs support formularies, advising on appropriate therapy use in certain circumstances.

For example, a program that alerted plan sponsors to off-label prescriptions of Raptiva® for rheumatoid arthritis, an indication for which it is not approved, saved plans $220,000 on 150 such prescriptions.

In another example, a program that monitored prescriptions written for higher-than-recommended dosages of the joint lubricant Synvisc® saved plan sponsors $750,000 on 900 prescriptions.

Similarly, a program aimed at avoiding fertility medication waste saved more than 5,000 units of fertility medication for one plan sponsor alone. Such drugs are used in varying doses over short periods because each patient responds differently. Patients often respond before taking a full prescription, leaving a number of unused doses. Plan sponsors can set dosing limits to minimize such waste.

Express Scripts, Inc. (Nasdaq: ESRX) is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to over 55 million patients through facilities in 13 states and Canada. Express Scripts serves thousands of client groups, including managed-care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans. The Company also provides distribution services for specialty pharmaceuticals through its CuraScript specialty pharmacy. More information can be found at http://www.express-scripts.com.