High-Priced Specialty Drugs On The Rise

Study documents jump in expensive prescriptions covered by health plans, employers.

If you think you’re paying more for high-priced specialty prescription medications, you’re not wrong. And it doesn’t matter if you’re a patient, employee, health plan or employer.

A new study in the journal Health Affairs found that specialty drugs are consuming more of everything from everyone no matter how you measure it and who you are.

The study, conducted by a pharmacy professor at the University of North Carolina at Chapel Hill, looked at health insurance claims for nearly 30 million prescriptions filled from January 2003 through December 2014. The prescription data are from a database of claims data from large employers and health plans maintained by Truven Health Analytics, which is owned by IBM Watson Health.

The study defined specialty drugs as a prescription medication that cost $600 or more for a 30-day supply. Non-specialty drugs were any prescription medication that cost less than that.

According to the study:

  • The percentage of prescription medications covered by commercial health plans that were specialty drugs rose to 11.8 percent in 2014 from 3 percent in 2003.
  • The percentage of prescriptions filled that were specialty drugs rose to 1.8 percent in 2014 from 0.6 percent in 2003.
  • The percentage of total spending on prescription medications attributable to specialty drugs rose to 43.2 percent in 2014 from 11 percent in 2003.
  • The average monthly patient out-of-pocket cost for specialty drugs rose to $77 in 2014 from $41 in 2003.
  • At the same time, the average monthly patient out-of-pocket cost for non-specialty drugs dropped to $11 in 2014 from $19 in 2003.

The researcher said employers and health plans have been “reluctant” to aggressively attack the high cost of specialty medications because of their importance to managing the health status of workers and enrollees, but she suggested that may change if the trends identified in the new study continue.

A recent report from United Benefit Advisors said that’s already starting to happen. The UBA report said an increasing number of employers are adding a fourth tier to their drug benefit plans for specialty drugs that include higher co-payments for employees.

Also, the Health Affairs research points to the value of health insurance claims data as a source of medical spending trends of interest to employers. To learn more on that topic, please read the latest Explanation of Benefits column in Twin Cities Business.