Health Care Trend: Managing Rising Prescription Drug Costs
The cost of prescription drugs – particularly specialty drugs – is often in the headlines, but list prices are only part of the reason plan sponsors are spending more to provide their members with medications.
Increased demand, driven by the aging of the U.S. population and a corresponding increase in chronic conditions, is a major contributing factor to rising prescription drug costs, while the introduction of life-changing gene therapies will push total spending even higher.
More older Americans, more chronic conditions
Experts predict that by 2030, 80 million Americans will have been diagnosed with three or more chronic conditions. An estimated 21 percent of Americans will be 65 or older, compared with 15 percent today.
A recent analysis shows that 86 cents of every health care dollar is spent on caring for chronic conditions, while people with more than one condition account for 71 cents of that amount.This trend, which is partially attributed to the aging of the U.S. population, will be one to watch.
The promise of life-changing gene therapies
As more and more gene therapies become available, people living with a variety of conditions will have the opportunity for improved health or even a cure. At the same time, however, these promising drugs could expose payers to exponential costs, while grappling to ensure access.
Most existing gene therapies and those in the pipeline treat rare conditions. As therapies are introduced for more common conditions, demand and usage are expected to grow, potentially creating further cost and affordability considerations. The Food and Drug Administration (FDA) is expected to approve 50 to 100 gene and cell therapies by 2025.By the following year, the cost of gene therapies in the U.S. could exceed $13 billion.
These two causes of rising drug costs will continue the historical trend of the U.S. health care system focusing on volume over value. We spend more on health care than other countries – in some cases, nearly twice as much – but we don’t necessarily achieve better results than countries that spend less.
- Embarc Benefit Protectionprogram brings together the health services, medical benefit management, and specialty pharmacy expertise of Express Scripts, eviCore, Accredo, and CuraScriptSD to protect plans and employers from the costs of one-time, potentially curative gene therapies. In addition, the program limits patients’ out-of-pocket costs.
- SafeGuardRx, our first-to-market value-based platform, uses multiple cost-containment strategies for some of the most costly and complex conditions, protecting plan sponsors while holding the entire health-care marketplace accountable. In 2019, plans enrolled in SafeGuardRx saved more than $4.3 billion.
As a trusted health care partner, Express Scripts is always innovating and pushing the limits to implement best-in-class solutions. We’re continually monitoring and analyzing usage and costs for the medications Americans need to get and stay healthy and remain flexible to address the evolving needs of our members and clients both now and in the future.
For insight on market drivers and the drug classes contributing most to the bottom line, you can reference our 2019 Drug Trend Report.