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    Prescription drug spending surges amid market forces

    In 2014, the pharmacy landscape underwent a seismic change, and healthcare payers faced the highest annual increase in drug spending since 2003, according to the "2014 Drug Trend Report" by Express Scripts. In addition, new medication spending reached $373.9 billion in 2014, up 13.1%, the highest level since 2001 when growth was 17%, according to the IMS Institute for Healthcare Informatics report, "Medicines Use and Spending Shifts: A Review of the Use of Medicines in the U.S. in 2014."

    Prescription drug spending growth is projected to slow down to an average 6.3% annual growth from 2015 through 2024 because of improving economic conditions, changes in benefit management designed to encourage better drug adherence for people with chronic health conditions, and anticipated changing clinical guidelines designed to encourage drug therapies at earlier stages of treatment, according to the Centers for Medicare & Medicaid Services.

    In looking at the recent surge in medication spending, many factors played a role, including prices escalating for brand medications and the ongoing increase in utilization of specialty therapies, including rapid uptake of new hepatitis C therapies and expensive compounded therapies, says Jonathan C. Roberts, president, CVS/Caremark, and executive vice president, CVS Health, Woonsocket, Rhode Island.

    As a result of market forces, plan sponsors can no longer rely on the wave of less-expensive generics to control drug costs, according to the Express Scripts report. They need to act now to more tightly manage the benefit, implement smarter formularies, control the use of compounded medications, and offer clinical support to ensure that all patients are able to achieve the best health outcome possible.

    Here’s a closer look at the forces behind the sharp rise in medication spending.

    Next: Increased spending on specialty medications

     

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