Diabetes Meds Now Drive Rx Spending: Report
6 CommentsBy Ed Silverman // May 15th, 2008 // 6:59 am
Diabetes meds are now the leading driver of prescription drug spending growth, displacing cholesterol pills which, thanks to generics, fell precipitously after a decade of reigning in the top position, according to a report by Medco Health Solutions, the pharmacy benefit manager.
The report shows that despite continued growth in the use of cholesterol drugs, spending fell 8.5 percent in 2007 as usage of lower-cost generic Pravachol and Zocor increased. Meanwhile, spending on diabetes drugs increased 12 percent due to shifts toward higher-cost meds, brand-name drug price inflation and moderate growth in the number of patients receiving treatment. Here’s the link to the chart to the left.
Other findings: Drug spending rose 12.3 percent in 2007, with specialty drugs accounting for 11.4 percent of all pharmacy plan spending, up 10.4 percent, thanks to autoimmune conditions, cancer, multiple sclerosis and respiratory conditions. Spending on cancer drugs is expected to increase 46 to 53 percent through 2010 on a compounded basis, driven by treatments with monthly costs that can exceed $10,000, according to Medco.
Saftey concerns had a “significant bearing” on spending and utilization on antidepressants, hormone replacement therapy, and specialty anemia treatments, Medco reports. Safety warnings on Procrit, Epogen and Aranesp, which are used to treat anemia in patients with cancer or kidney disease, led to a 15.1 percent drop in spending on this class of drugs.
A drop in spending on antidepressants of 8.4 percent reflects a decline in unit costs with generic versions of Zoloft and Wellbutrin XL entering the market. Meanwhile, the use of antidepressants increased slowly during 2007, reflecting concerns about warnings in 2005 associated with possible risk of suicidality in children and young adults, according to Medco.
And the use of hormone replacement therapy has been on the decline over the past six years over health risk concerns that emerged when the Women’s Health Initiative first reported an increased risk of heart attack and stroke in 2002. Last year, usage fell an additional 9.2 percent.
Scott
The bigger question is where all this free-market analysis which supposedly makes the U.S. more efficient than all those single-payer systems in Europe? Of course, that would be an incorrect assumption. The use of diabetes drugs increased only 2.3% last year, but spending rose 12%. The big driver was the introduction of new, expensive medicines that replace or are added to older, cheaper ones. Notably, more expensive insulin analogs such as Novolog was cited, and yet this has not led to improved glycemic control … where is the free-market analysis of this trend, one has to wonder?
Melody
And this is just for diabetes meds. If analysts looked at diabetes treatment tools (strips, monitors, foods, etc) and co-prescribing (statins, hypertension meds, and mood drugs) SOMEONE–ANYONE–might be astonished at how significantly treating this disease impacts escalating healthcare costs.
Obviously free-market and free-choice no longer exists for U.S. diabetics. Those who need/require natural (animal) sourced insulins must acquire product from outside the U.S.–assuming they have the money to do so. One of the specious arguments used to promote/market the first rDNA insulins was that costs would be lowered. NOT!
mel
Does anyone have a copy of the above table or an http location - I would like to see the other categories, but the table is nearly illegible, and the thumbnail doesn’t have a link.
Thanks in advance!
Ed Silverman
Hi Mel,
I’ve included a link to the chart pictured above. Just go to ‘Here’s the link to the chart to the left’ in the second graph. Sorry for the ineligible chart. Looks like we can’t click on the chart to enlargen it and I didn’t realize that.
Regards
ed
Greg
According to IMS Health (a market research firm) sales grew 6.4 % (to 712 bln)in 2007 compared with a 7% growth in 2K6. These numbers really hit the theme of this articles home. The shift to using more expensive drugs is probably going to continue based on the projected oncology market.
Atlex
IMS data, which is based on retail sales, tends to overstate sales since it doesn’t account for rebates to PBMs and health plans. Overall, rebates have been increasing in key drug classes (eg, statins), thus the growth rate is likely overstated.