Spending on prescription drugs that are covered under the
medical benefit increased by 65% between 2014 and 2018 for commercial insurers
and 40% for Medicare, according to Magellan Rx Management’s annual Medical
Pharmacy Trend Report.
"The increase in medical pharmacy spend seems to largely be
driven by inflation," says Kristen Reimers, Magellan's senior vice
president of specialty clinical solutions. "This can be a combination of
two things, increasing costs of existing drugs and providers utilizing newer more
expensive drugs. The pipeline was extremely robust and new therapies to market
are contributing to inflation, driving the trend."
According to the report, new oncology therapies are both
emblematic and a primary driver of growth in drug prices. A new generation of
highly effective, biologic oncology drugs have emerged in the last decade.
However, these pioneering drugs are expensive. According to the report,
oncology drugs and the drugs needed to support them accounted for 43% of
per-patient per-month medical pharmacy spending for commercial carriers.
Like other biologic drugs, most biologic oncology drugs have yet
to see significant biosimilar competition due to barriers in the biosimilar
market and development pipeline.
"The most exciting biosimilars are those currently in the
oncology space. Herceptin, Avastin and Rituxan have been the top five drugs in
terms of spend for the last 10 years," says Reimers.
"Rituxan and Avastin now have two biosimilars on the
market, and Herceptin has five marketed products. There will be competition,
which will help to flatten the trend for these products, although there is
still expected to be growth."
Emerging competition could bolster the already-improving price
outlook for more established biologic drugs. However, growth in oncology
spending is not likely to stop any time soon. In some ways, this is good news
for patients: according to Reimers and the Magellan report, promising new,
targeted therapies for hard-to-treat cancers will account for much of the
increased spending in coming years.
"The pipeline for oncology is extremely robust, with over
700 drugs being studied for a variety of different cancer types," Reimers
says.
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