UpClose with Ken Dowell, Evergreen Rx Practice Leader

New Drugs and Treatments Contribute to Rx Trend Increase

In March of this year, a drug called Soliris, costing each patient about $500,000 a year, was approved to treat a rare stem cell disease affecting one in 1 million members. Just recently a discussion with a health plan with a membership of 300,000 revealed the health plan had two of its members utilizing this new drug with a projected annual expense of $500,000 of therapy each, This was an unexpected, significant expense for a drug that was not even available until earlier this year.

Specialty drugs, along with the availability of more generic drugs, Medicare Part D, an aging population and Americans using more prescriptions due to earlier diagnosis are all contributing to the growth in spend.

For specialty medications, the jump has been especially significant. During 2006, specialty prescription sales increased to 40.3 billion dollars, an increase of 20% over the prior year occurred, mostly as a result of new products and new indications.

A constant source of concern, several new potential blockbuster drugs are expected to have more than $1 billion in global sales this year, including:

• Alvesco - $1.2B globally – persistent asthma in adults, adolescents and children over 4 years of age
  
  
• Desvenlafazine - $2.58 B USA – major depressive disorder; vasomotor menopause symptoms
  
  
• Exubera - $1.5 B globally – Type 1 and Type 2 diabetes in adults
  
  
• Levemir - $1.2 B USA – Type 1 and Type 2 diabetes
  
  
• Provenge - $1B USA – Asymptomatic men with metastatic androgen-independent prostrate cancer
  

The top 50 pharmaceutical companies are currently awaiting FDA approval for about 125 new and supplemental drug applications. Two thirds of these applications are for new molecular entities, new formulations, or new combinations, while the remaining one third is for new indications.

For health plans and other prescription drug payers managing their drug spend and staying on top of new product launches can save significant dollars.

Specialty Drug Management continues to be an increasingly interesting area of our Evergreen Rx Pharmacy Practice. We typically hear one of two things from clients and prospects. The first is “We don’t really have any specialty claims to speak of”; or “We just got nailed by a huge claim, how can we get relief so that it does not blow our financials for the year.”

The fact of the matter is specialty medications are here to stay. Research and development dollars are being spent at a ratio of 10:1 on the development of these drugs. When you look at the revenue, impact, and ultimately the profitability of these pharmaceuticals, you can easily see why. As a result, getting in front of the specialty trend line has become critically important. If you haven’t been hit with a significant specialty claim, the train may seem like it is a long way off, but it is surely coming down the tracks….be prepared for it