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Express Scripts Report Shows Spending on Traditional Medicines Fell in 2012

Express Scripts Report Shows Spending on Traditional Medicines Fell in 2012 [St. Louis Post-Dispatch]

From St. Louis Post-Dispatch (MO) (March 5, 2013)

March 05--For the first time in more than 20 years, there was a decrease last year in U.S. spending on traditional prescription drugs.

According to new data released by Express Scripts Holding Co., the country’s largest pharmacy benefit manager, total spending on traditional prescription drugs -- mainly pills taken to treat common diseases such as high blood pressure or bad cholesterol -- declined 1.5 percent in 2012.

In 2010 and 2011, U.S. spending on such medicines remained nearly flat in the nation’s commercially insured population -- with an increase of less than 1 percent.

Express Scripts’ annual drug report is based on an analysis of its 100 million members. The north St. Louis County-based company processed about 1.4 billion prescriptions in 2012.

"Average spending on a per member per year basis actually went down in 2012," said Sharon Frazee, the pharmacy benefit manager’s vice president of research and analytics. "It largely has to do with the management programs put in place by PBMs (pharmacy benefit managers) ...

"We encourage people to choose generic medications when available and to choose the least expensive clinically appropriate medication -- and only step up to a more expensive medication if it’s necessary," she said.

Frazee said the "patent cliff" was another factor in last year’s decrease of U.S. spending on conventional drugs. In late 2011 and 2012, the patents expired on a number of blockbuster drugs such as Lipitor, a cholesterol drug, and several drugs for mental illness -- opening a pathway for generic drug makers.

"We typically will see cost decreases after a drug goes generic in the 70 or 80 percent range," she said.

Frazee acknowledged that the economy also has influenced the decreased spending on traditional drugs. "We have seen that primarily with utilization, with many people not going to the doctor," she said.

But the decline in spending on conventional drugs was offset by an 18.4 percent increase in spending last year on specialty medicines. These drugs -- organic compounds that are often injected -- are used to treat complex diseases such as rheumatoid arthritis, cancer and hepatitis C.

"Very few of the specialty drugs have generics available, so there is very little price competition for these drugs," Frazee said. "These are good drugs. They are effective, they improve lives, they save lives. But there is very little competition on price because of the lack of a pathway for biosimilars (generic alternatives), which makes them very expensive."


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Posted: March 2013