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Drug Prices Up 3.5% For 2012

December 04, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: www.express-scripts.com, 11.28.12

According to the Express Scripts Prescription Price Index, prices on a market basket of the most highly utilized brand-name medications increased 13.3 percent from September 2011 to September 2012, far outpacing the overall economic inflation level of 2.0 percent. During the same timeframe, prices of generic medications declined 21.9 percent. This 35.2 percentage point net inflationary effect is the largest widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.

“The patent cliff has fueled a growing price disparity between brand-name and generic medications,” said Steve Miller, M.D., chief medical officer at Express Scripts. “The trend emphasizes the nation’s continued need for the tools we employ to help patients make better decisions, including generic use when appropriate.”

Drivers of Traditional Drug Trend

During the first three quarters of 2012, spending on traditional medications decreased 0.6 percent over the same period in 2011, primarily driven by lower prices brought on by increased use of generic medications.

The top traditional therapy class is mental and neurological disorders (including antidepressants), which now consumes 24.7 percent of all traditional drug spend. Although use of these medications has increased 3.1 percent compared to the first three quarters of 2011, total spending in this class is down 1.9 percent due to newly available generic antidepressants and antipsychotics.

Total spending on medications to treat high blood pressure and high cholesterol decreased 7.7 percent, primarily driven by the continued impact of patent expirations for blockbuster drugs.

Drivers of Specialty Drug Trend

Specialty drug trend continues its year-over-year double-digit growth. During the first three quarters of 2012, spending on specialty medications increased 22.6 percent over the same period in 2011, primarily driven by unit cost increases. In the first nine months of 2012, specialty drug costs consumed 20.8 percent of total pharmacy spend.

“The continued rise in spend on specialty medications underscores the nation’s need to accelerate the pathway for biosimilars,” Dr. Miller said. “Additional competition within these therapy classes would provide a necessary market control against price inflation.”

The three therapy classes representing the largest amount of specialty drug spend continue to be rheumatoid arthritis/autoimmune conditions, multiple sclerosis and cancer.

Medications commonly used to treat hepatitis C continue to have the largest specialty spend increase, 117.3 percent over the same period in 2011. Increased utilization is driving this trend, as new patients begin and continue treatment with one of two new medications.

Eight of the nine notable new medications approved in the third quarter are specialty medications. Many of these medications are second-line and third-line drugs indicated to treat advanced cancers.

Spotlight on Obesity Medications

The report reviews the two new anti-obesity medications approved this summer by the U.S. Food and Drug Administration. In clinical trials, many patients taking either of the new medications lost at least 5 percent of their body weight.

“The potential benefits of these new anti-obesity medications need to be compared against their risks and cost,” Dr. Miller said. “We are cautiously optimistic about the possibilities of these and other drugs like them, provided that they are prescribed appropriately and integrated with other lifestyle modifying programs that help patients make healthier choices that maintain their weight over time.”

Slow Uptake Of New Drugs Clouds Industry Outlook

April 22, 2010 By: Nadia Category: Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Dow Jones Newswires – Philadelphia Bureau, April 22,2010

New prescription drugs just don’t fly off the pharmacy shelves as quickly as they used to. That’s a problem for an industry facing a wave of patent expirations for its current blockbusters.

Drug makers are having a tougher time convincing drug-benefit plans to provide favorable reimbursement soon after the introduction of new drugs. While several factors have contributed to slow launches, a big hurdle is insurers’ insistence that manufacturers prove the cost-effectiveness of new drugs, in addition to efficacy and safety.

One example is Effient, a new blood-thinning treatment for heart patients co-marketed by Eli Lilly & Co. (LLY) and Daiichi Sankyo Co. (4568.TO). A prominent warning about bleeding risks on the drug’s prescribing label and less-than-ideal reimbursement by insurers have hampered its growth.

From its introduction last year through March 31, Effient has generated only about $36 million in sales for Lilly–an inauspicious start for a drug once viewed as likely to exceed $1 billion in annual sales. The gold standard anticlotting drug, Plavix from Bristol-Myers Squibb Co. (BMY) and Sanofi-Aventis SA (SNY), seems immune to Effient’s challenge.

“It’s getting increasingly difficult for new products to demonstrate value to a broad set of stakeholders,” said Rob Harold, senior principal with IMS Health Inc.’s consulting unit, which advises drug makers on product-launch strategies.

Other numbers from prescription-data provider SDI help tell the story: From 2000 through 2004, five drugs exceeded 700,000 monthly prescriptions each within a year of their respective U.S. launch dates. These included AstraZeneca PLC’s (AZN) Nexium heartburn pill, now the third best-selling drug in the world. But from 2005 through 2009, only one drug reached that threshold so quickly: Teva Pharmaceutical Industries Ltd.’s (TEVA) ProAir HFA asthma inhaler.

“I do think there’s a little bit more rigor around what constitutes value in health care,” said Tim Heady, chief executive of UnitedHealth Group Inc.’s (UNH) Pharmaceutical Solutions unit.

The UnitedHealth unit has placed Effient on the third tier of its preferred-drug list, which means members pay a higher copay for Effient than for other drugs listed on the first or second tiers, partly because of the bleeding risk.

Ronika Pletcher, head of Lilly’s investor relations, acknowledged Monday the uptake of Effient was slower than planned, but told analysts on a conference call the company was encouraged by recent signs of demand. The company has honed its marketing pitch to focus on certain patient populations for which Effient is a good choice, such as diabetics. Lilly also has conducted research to support its cost-effectiveness.

In some cases, new launches are hampered if a drug isn’t the first of its kind to reach the market. That appears to be the case with Onglyza, a diabetes drug launched last year by Bristol-Myers Squibb Co. (BMY) and AstraZeneca. Its modest sales since launch have contrasted with the quick uptake for Merck & Co.’s (MRK) Januvia, which was the first of its kind and had a three-year head start.

“It’s increasingly challenging to successfully differentiate your next-in-class product,” said BMO Capital Markets analyst Robert Hazlett.

Drug makers have adjusted, shifting resources from sales representatives who call on doctors to reps who pitch to insurers. Some have narrowed the focus of their research-and-development efforts to searching for treatments for diseases with high unmet medical needs, like Alzheimer’s disease and cancer. Breakthroughs in these areas are less likely to face obstacles to brisk launches.

“All the drug companies are experiencing the same phenomenon,” Bristol-Myers Chief Executive James Cornelius said in a recent conference call with reporters. “We, with others, are experimenting with our marketing mix to get faster product uptake.”

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