Express Scripts (ESI) reports that drug spending increased at the slowest pace in 25 years. Or, as the headline from the PBM’s press office touts: “Express Scripts Reduces Employers' Annual Prescription Drug Spending Growth Rate to Historic Low in 2017”
That may or may not be a good thing for patients. A closer look at how the PBM achieved this suggests that it is almost entirely due to a significant reduction in the number of new patients with HIV, Hepatitis C and treatment-resistant high cholesterol for the year before. From 2016-17 generic drug use in those categories declined as a percent of drugs dispensed while the use of new meds increased. If the ratio is tilting towards brand drugs it means the total number of peoples being treated for these conditions declined.
It could be a yearly anomaly due to fewer people needing treatment. Or it could be the result of increased patient cost sharing, the use of drug exclusions, step therapy, etc. Indeed, Express Scripts credits its SafeguardRx program which uses all these tools for the reduction in the rate of drug cost.
Moreover, the low rate of growth does NOT translate into lower costs for patients. Indeed, as noted, the increase in cost sharing through separate drug deductibles, higher copays, co-insurance means that the decline is a result of an increased burden on consumers. The fact that specialty utilization declined in Medicaid and ACA plans, while Medicare specialty spend increased more slowly than in commercial plans suggests that higher cost sharing and restrictive access played a key role in reducing the rate of increase.
Further, it appears that Express Scripts is not counting the rebate dollars shared by plans in the estimates. Yet member cost is what is paid at retail. ESI backs out rebates from the unit and total costs but includes cost sharing of patients. Drug mix is another element calculated in coming up with unit cost. As noted, the mix of generic and specialty spend – as well as the mix of traditional and specialty is moving towards specialty drugs. That means most of the increase in unit cost apart from certain drug categories where utilization dropped, is the result of increased member cost since cost is net of rebates. And as for ESI’s claim they are more than happy to pass rebates to patients instead of plans, it ain’t happening as Drug Channels points out.
Bottom line: Fewer people with chronic or complex conditions are getting access to new medicines while others are paying a bigger sharing of the increase in drug costs.
Does this translate into better health and lower health care costs overall? And what or who is SafeguardRx protecting? My guess is it’s ESI’s failing business model, not patients.