Drug spending in the US is… down?

Well, for some cohorts, yes, drug spending in 2017 was down. Holy schneikies. What’s more is that, according to the Express Scripts 2017 Drug Trend Report, drug spending increased by only 1.5% for their commercial plan sponsors and it declined for nearly half of commercial payers. For a really good synopsis of the report, go here. In what we can only assume will be a politically unpopular analysis, Drug Channels points out that specialty drug costs are not the problem because “Specialty unit costs grew by 3.2% for commercial payers, while utilization grew by 8.1%. In other words, spending increased because more people were treated, and more prescriptions were dispensed. That’s not a drug price problem.” Son of a … But it’s not all sunshine and roses, as 6.3% of people spent more than $1,000 out-of-pocket for prescription drugs in 2017. Sorry for the buzzkill.

Civil War: healthcare edition

The formula for rising healthcare costs in the US is filled with a bunch of pointed fingers lately. One finger is being pointed at drug maker Kaléo (no, not that Kaleo) by pharmacy benefit manager Express Scripts. They’re suing Kaléo over its price hikes on a heroin/painkiller overdose treatment. According to Express Scripts, these hikes triggered price protection rebates owed to Express Scripts, which total around $14 million—most of the lawsuit. The PBM has successfully sued larger drug companies like Horizon, so Kaléo may be at a bit of a disadvantage here. Especially since Express Scripts could use the extra cash to deal with the fingers pointed at it, including one $15B lawsuit by its (soon-to-be former) largest customer, the insurance provider Anthem.

2. The war on drug stores heats up

Recent power plays in the prescription drug industry make J.R. Ewing’s actions seem like child’s play. If you don’t track the specialty pharmacy market, you should. This is a $100B industry that is growing rapidly. Think high-priced drugs used to treat Hep C and Cystic Fibrosis. According to the New York Times, large PBMs might be trying to force out independent specialty pharmacies. In Alabama, BCBS recently told patients that they cannot have their prescriptions filled at CVS. This is a big deal. It means patients have to sever long-standing relationships with pharmacists, especially difficult with specialty indications. This is all part of an emerging trend to narrow networks. Look it up. You will be glad you did and you’ll be smarter.