Prescription insurance has become an increasingly major cost for employers. New drug approvals by the US Food and Drug Administration (FDA) are expected to escalate this year with multiple innovative drugs already being approved for cancer, multiple sclerosis and other conditions.
As researchers discover more treatments, costs will continue to climb. For this reason, smart management of pharmacy plans will be even more vital for employer health plans.
2017 Drug Pipeline
2016 saw a below average number of drug approvals. 2017 is expected to bounce back with 30+ new specialty drugs.
Specialty medications are high-cost prescription drugs used to treat complex conditions. The blue bar (below) shows specialty medication drug approvals. The green bar represents traditional brand and generic drugs. Technology, innovation and new scientific discoveries have caused specialty medication drug approvals to rapidly increase over the last few years.
Growth of Novel Drugs in Prescription Insurance
In 2016, 22 novel drugs were approved, which was the lowest number since 2010. A novel drug is an innovative product with a unique chemical structure that has never been approved by the FDA before. Typically novel drugs meet an unmet medical need.
But it comes at a cost – literally.
When 1% of prescriptions drive 40-45% of an employer’s pharmacy spend, avoiding wise management is no longer optional. Part of my role as a MedCost Pharmacist is to emphasize the importance of cost-management strategies to our employers and consultants.
I also work closely with our clients to help employers understand the importance of educating their employees about these changes and why they are needed.
- PwC Health Research Institute, “Medical Cost Trend: Behind the Numbers”, 2016.
- Specialty Pharmacy Times: “Specialty Pharmacy Drugs: 2016 Approvals and 2017 Forecasts”, 1/26/17. Accessed: https://www.specialtypharmacytimes.com/news/specialty-pharmacy-drugs-2016-approvals-and-2017-forecasts
- Specialty Pharmacy Times: “Specialty Pipeline Highlights”, 2/8/16. Accessed: https://www.specialtypharmacytimes.com/publications/specialty-pharmacy-times/2016/february-2016/specialty-pipeline-highlights-jan-16
- Diplomat Pharmacy, Inc.: “Diplomat 2016 Pipeline Recap.” Accessed: https://issuu.com/diplomatrx/docs/2016pipelinerecapfinal_ web?e=15248128/42785885
- DRUG TABLE
- OptumRx© RxNews Weekly email blogs
- FDA Approvals 2017: https://www.fda.gov/drugs/developmentapprovalprocess/druginnovation/ ucm537040.htm
- BioPharma, accessed: http://www.biopharmadive.com/news/fda-gives-thumbs-up-to-takedas-lung-cancer-drug/441653/
- Forbes; accessed: https://www.forbes.com/sites/matthewherper/2017/05/05/fda-approves-first-new-drug-to-treat-als-in-22-years/#1399b94d7fb3
- Bloomberg, accessed: https://www.bloomberg.com/news/articles/2017-03-23/pfizer-and-merck-kgaa-s-new-cancer-drug-to-cost-13-000-a-month
- National MS Society, accessed: http://www.nationalmssociety.org/About-the-Society/News/FDA-Approves-Ocrevus
- MarketWatch, accessed: http://www.marketwatch.com/story/tesaro-wont-reveal-price-of-ovarian-cancer-drug-but-itll-likely-be-near-14000-a-month-2017-03-28
- “The cost of Drugs for Rare Diseases is Threatening the US Health Care System” https://hbr.org/2017/04/the-cost-of-drugs-for-rare-diseases-is-threatening-the-u-s-health-care-system
- Pharmacy Times “7 New FDA Approvals to Know from March 2017” 4/13/17. Accessed: http://www.pharmacytimes.com/news/7-new-fda-approvals-to-know-from-march-2017
- Pharmacy Times “7 New FDA Approvals to Know from February 2017” 3/3/17. Accessed: http://www.pharmacytimes.com/news/7-new-fda-approvals-to-know-from-february-2017
- Pharmacy Times “5 New FDA Approvals to Know from January 2017” 2/17/17. Accessed: http://www.pharmacytimes.com/news/5-new-fda-approvals-to-know-from-january-2017