Medical Benefit Pharmacy Trend Saw Biggest Increase in Years

From RADAR on Specialty Pharmacy

In 2016, commercial per-member pre-month (PMPM) medical benefit pharmacy trend underwent the largest jump in five years, according to Magellan Rx Management's Medical Pharmacy Trend Report.

"Commercial PMPM trend was seven percentage points higher — 21%, a 62% difference — than the 13% average annual trend of the last five years," said Casandra Stockman, Pharm.D., vice president of medical pharmacy strategy.

Increases in drug prices were the largest contributing factor driving the rapid growth. Among the top 20 commercial categories, eight more than doubled in spend from 2012 to 2016.

According to Stockman, "94% of commercial medical benefit drug spend is from specialty medications, which is driven by only 10% of patients. For Medicare, 96% of drug spend is from specialty drugs driven by 21% of patients."

Among commercial plans, the top five drugs in terms of spend are Remicade, Neulasta, Herceptin, Rituxan and Avastin, which have switched positions within the top five only twice in eight years. The programmed-cell death (PD)-1 inhibitor Opdivo became the first new drug that entered the top five Medicare drugs listing since the inception of Magellan's report.

Stockman concluded that "medical benefit trend continues to outpace pharmacy benefit trend. Over the last five years, the average annual commercial medical benefit trend was 13% while the pharmacy trend was closer to 5%, reinforcing the need to diligently manage drugs covered by the medical benefit to help temper the accelerated costs."

The report is based on surveys sent to medical, pharmacy and network directors from 46 commercial and Medicare Advantage payers representing more than 128 million covered lives, as well as analyses of commercial and Medicare Advantage health plan paid claims data.

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