Study: Insurer spending on specialty drugs skyrocketed from 2003-14

Commercial insurance plans dedicated almost four times as much of their prescription drug spending to specialty drugs in 2014 than in 2003, with the number of specialty prescriptions tripling in the same time frame.

The study, authored by Susan Dusetzina, PhD, an assistant professor in the Division of Pharmaceutical Outcomes and Policy at the University of North Carolina, and published in Health Affairs, also found patients’ out-of-pocket spending on specialty drug increased 46 percent between 2003 and 2014, while spending on nonspecialty drugs dropped.

Using the CMS definition of specialty drugs as prescriptions where the majority of fills are reimbursed by $600 or more under Medicare, the study found that spending on these more expensive drugs by commercial insurers increased from 11 percent of all prescription costs in 2003 to 43 percent in 2014. However, these drugs remained a small, if growing, portion of all prescriptions filled, increasing from 0.6 percent in 2003 to 1.8 percent in 2014.

“Although these drugs have historically made up a small part of drug utilization, recent drug approvals have increased both the volume of use of these drugs and total spending on them across all payers,” Dusetzina wrote.

The treatments contributing the most to this spending increase were for rheumatoid arthritis, diabetes, high cholesterol and attention deficit hyperactivity disorder. A hepatitis C drug, Sovaldi, had the highest reimbursement per fill, at $28,083 in 2014.

“Patients who need these products have little choice regarding product selection, and increases in cost sharing or reductions of limits on coverage may result in inadequate adherence or forgoing necessary care,” Dusetzina wrote. “Although specialty medications are leading contributors to health plan spending, previous research suggests that payers are reluctant to aggressively manage spending on them because of their importance to patient health.”

The study concluded by predicting prescription spending will continue to rise without some changes to pharmaceutical policy.

“Potential targets for reducing prescription drug spending include greater use of generic substitutes for brand-name drugs, when available, and consideration of value-based payments for high-priced medications where outcomes vary across patient populations,” Dusetzina wrote.