By Zafeira Sarrimanolis, PharmD, MedCost Clinical Consultant
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.
As of May 5th, 20 novel drugs have already been approved this year. It’s an exciting time for healthcare as we treat more complex conditions and improve member health and quality of life.
But it comes at a cost – literally.
When1% 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.
It’s all about making sure each employee gets the right drug for the right medical condition at the right time. That’s how we control pharmacy costs.
PwC Health Research Institute, “Medical Cost Trend: Behind the Numbers”, 2016.