eyeforpharma Philadelphia 2014

Apr 15, 2014 - Apr 16, 2014, Philadelphia

Make customer centricity work: smart pharma mindsets, models and technology that will seal commercial success

Basic Medicine Sales Drop For the First Time, Specialist Treatment Costs Soar

US spending on traditional prescription drugs decreased in 2012 for the first time in more than two decades but were offset by an 18.4% increase in spending on specialty prescription drugs.



According to a report by pharmacy benefit manager (PBM) Express Scripts, there was a 1.5% decrease in the costs for patients with conditions such as high cholesterol and high blood pressure who receive their prescription benefits through commercial insurers. The annual Drug Trend Report, based on spending by the US commercially-insured population, attributed the drop in sales to the loss of patent exclusivity in 2012 for blockbuster drugs. However, the increase in spending on specialty drugs to treat more complex diseases such as rheumatoid arthritis, cancer and hepatitis C led to a 2.7% increase in net spending on drugs in 2012. The BPM said that this is “consistent with the rate of growth in 2011.”

Patent expirations have encouraged the use of generic drugs, and for BPMs like Express Scripts, profit margins on generic drugs are larger than those on more expensive branded medicines.  Firms who provide health insurance are naturally concerned with effectively managing their healthcare costs and will therefore also encourage the use of generic drugs among their employees.  Furthermore, the Patient Protection and Affordable Care Act (PPACA), or Obamacare, is aimed primarily at decreasing the number of uninsured Americans and reducing the overall costs of health care.  It rewards companies and individuals for the use of generic drugs through subsidies and tax credits as a way to decrease healthcare spending (about 17% of GDP).

Another first noted in the report was the record set for the country’s spending on specialty conditions. Although fewer than 2% of the population are affected by these ailments, they accounted for 24.5% of total spending on drugs in 2012 as both usage and cost of treatment has increased. Last year the US Food and Drug Administration (FDA) approved 22 new (mostly expensive) specialty drugs and new drugs across a number of classes are being developed to treat unique generic profiles, driving prices even higher.  For the second consecutive year, diabetes accounted for the biggest chunk of spending (a hike of 11% on the previous year’s figures) on prescription drugs in the US.  Treatment costs for attention disorders, inflammatory conditions such as rheumatoid arthritis, hepatitis C and cancer have also steadily increased.

But as companies are taking action to try to curb spending, patients that require specialty drugs often need upfront approval. The rising costs of these treatments may also embolden healthcare insurers/payers to ask the patient to seek other (cheaper) treatments first. Despite the substantial spending in specialist drugs last year, has the pharmaceutical industry seen the beginning of an overall decline in sales? How is your company managing the trend?



eyeforpharma Philadelphia 2014

Apr 15, 2014 - Apr 16, 2014, Philadelphia

Make customer centricity work: smart pharma mindsets, models and technology that will seal commercial success