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    Top pharmacy challenges of 2017

    High drug prices will continue to be the biggest pharmacy challenge for payers in 2017, sparked by the entry of many new specialty drugs on the market for some common chronic diseases— such as diabetes, heart disease, Alzheimer’s, and rheumatoid arthritis—and rare diseases, such as lupus and NASH (nonalcoholic Steatohepatitis, more commonly known as fatty liver disease).

    In 2015, drug spend was $364 billion with $98 billion attributed to specialty. These numbers are expected to climb to $483 billion, with $212 billion for specialty by 2020, according to “The 2016 Economic Report on Retail, Mail, and Specialty Pharmacies” by Pembroke Consulting and Drug Channels Institute in January 2016.

    Despite being used by only 1% to 2% of the population, specialty drugs accounted for 37% of U.S. drug spend in 2015 and are projected to reach 50% by 2018, according to the Express Scripts 2015 drug trend report, released in March 2016.

    No sign of stopping

    FlemingFleming“The primary concerns are the high cost of drugs, drug inflation, and new treatments, the latter in some therapeutic areas such as oncology,” says William Fleming, president, Humana Pharmacy Solutions. “The consumer price index for all products has been trending 3% to 4% for many years but has been double digits for prescription drugs. It’s happening right before our eyes. In the next three to five years, these trends of inflation and new drug innovation will result in nearly half of drug spend being consumed by 2% of the members we serve.”

    Drugs for hepatitis C welcomed in a new era of innovation; it was the first time drugs offered a cure—but at an unaffordable price, he says. “The next phase will be for Alzheimer’s and fatty liver disease with potentially new treatments. If drugs can fulfill their promises, even if they cannot cure a disease, that is an awesome innovation.”

    BradburyBradburyChris Bradbury, senior vice president, integrated clinical and specialty drug solutions for Cigna Pharmacy Management, says Cigna’s clients continue to be concerned about pricing—and how to ensure robust, comprehensive and affordable drug benefits for members and employees.

    Rita Numerof, president/cofounder, Numerof and Associates, a global strategy consulting firm, says it is important to continue to change benefit design to influence consumer behavior, giving consumers more stake in the game and a greater role in decision making.

    For example, beginning in 2017, both UnitedHealthcare and CVS Health no longer cover Lantus (insulin glargine injection), a long-acting basil insulin used to improve glycemic control, and instead cover Basaglar (insulin glargine injection), the first insulin product approved through an abbreviated approval process by the FDA, as Tier 1 (the lowest out-of-pocket cost for members). UnitedHealthcare will move Levemir (insulin detemir) from Tier 1 to Tier 2 at the same time.

    In 2017, they are also excluding Neupogen (filgrastim), a white blood cell-boosting drug, and replace it with Zarxio (filgrastim-sndz), the first biosimilar to be approved by the FDA. 

    MoraMoraMarc Mora, MD, chief medical officer, Group Health Cooperative, says the payer/provider organization “has a long history of ensuring highly effective and safe medication use. While we continue to fine tune and improve our pharmacy management—including appropriate use of generics—these efforts cannot overcome the most pressing challenge, which is drug pricing.”

    Pricing already interferes with the public health benefits that pharmaceuticals offer, he says. “Our first priority remains patient safety and ensuring high quality outcomes for which we are known. And we remain laser focused on tackling the drug pricing issue in a way that best benefits our members.”

    While high drug prices will continue to plague the industry in 2017, the following four factors will exacerbate the problem:

    Next: Missing link between cost and outcomes

    Mari Edlin
    Mari Edlin is a frequent contributor to Managed Healthcare Executive. She is based in Sonoma, California.

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