Magellan Health Insights
  • Home
  • About
  • Resources
  • Voices
  • Contact

Trends in Oncology: A Focus on Medical Pharmacy Spend

by Magellan Rx Management October 26, 2020Specialty Pharmacy

It is no secret that oncology spend is high and continues to rise (by some estimates, cancer costs in the U.S. will reach $250 billion in the next five years!1). With the arrival of oncology biosimilars and the introduction of cell and gene therapies, it’s critical for payers to understand the trends and know what future-forward strategies can be deployed in the now to prepare for these market shifts.

The trends you need to know

The Magellan Rx Management Medical Pharmacy Trend Report is the industry’s premier resource for unlocking pharmacy trends and emerging strategies to mitigate rising specialty spend on the medical benefit. We’ve been tracking trends for a decade, and oncology remains the top spend category across all lines of business including commercial, Medicare, and Medicaid. For commercial plans, oncology has been the top spend category 10 years in a row, with oncology and oncology support spend increasing 54% since our 2010 report.2   

Commercial Oncology Spend-01

When you look at per member per month (PMPM) spend, oncology represents at least one-third of total medical drug spend across all lines of business and is approaching 50% of total spend in Medicare.

2018 % of Medical Drug Spend-01

Neulasta, Herceptin, Rituxan, Avastin, Opdivo, and Keytruda are all in the top 10 drugs by spend. Keytruda and Opdivo have experienced rapidly increasing utilization and spend, with Keytruda almost doubling in PMPM in Medicare. Medicare also has more than four times as many members utilizing oncology agents when compared with Commercial. In Commercial, the average cost per patient for these drugs is also increasing year over year.

Opdivo and Keytruda avg cost-01

Payer management strategies

The high cost of oncology therapy has urged healthcare stakeholders to explore cost-containment strategies while maintaining quality. According to our 2019 survey, payers were open to cost-saving strategies when appropriate.

  • 76% of payers surveyed are restricting specified regimens based on the patient’s performance status when aligned with National Comprehensive Cancer Network (NCCN) guidelines.
  • 69% are incentivizing lower-cost regimens when they carry the same level of compendia recommendation.
  • 54% of payers are limiting agents that are recently approved by the FDA under an accelerated approval pathway to patients who meet the study eligibility criteria used for FDA approval.
  • 35% are not covering NCCN 2A recommendations if evidence is lacking.

Looking ahead

Many opportunities for savings are anticipated with the biosimilars for Avastin, Herceptin, and Rituxan. At Magellan Rx, we have launched a solution to help our health plan customers maintain or expand member access to clinically-effective treatments, while having the added benefit of delivering significant drug spend savings. According to our latest research, presented at AMCP Nexus, biosimilars for oncology treatment show increased uptake and potentially sizable savings for health plans.

BIosimilars-for-Oncology-table-01

Source: Magellan Rx Management internal data

In addition, the gene therapy and biosimilar pipeline is robust in oncology with upwards of 700 drugs currently in clinical trials. In Medicare alone, the pipeline is projected to be worth $10.72.  Based on forecasting, growth in oncology is projected to soar 69% due to slight increases in utilization of current therapies—potentially with expanded indications—and, more dramatically, due to new pipeline approvals.2 To help health plan customers prepare for this shift, and continue to manage growing oncology spend, Magellan Rx has taken a comprehensive approach. We leverage our clinical expertise and experience to deliver innovative, cost-saving solutions such as dose optimization, drug wastage, biosimilar management, and site of service, along with genetic testing and patient-focused oncology care management programs.

For more on medical pharmacy trends, read the Medical Pharmacy Trend Report or watch our webcast.

  1. 30 May 2019. Global Oncology Trend Report 2019. https://www.iqvia.com/insights/the-iqvia-institute/reports/global-oncology-trends-2019. Accessed October 7, 2020.
  2. 2018 Magellan Rx Management Medical Pharmacy Trend ReportTM, ©2019.
Share on FacebookShare on TwitterShare on Linkedin
Tags: Biosimilars, Magellan Health, Magellan RX, Magellan Rx Management, Medical Pharmacy, Medical Pharmacy Spend, Medical Pharmacy Trend Report, Oncology, Oncology Biosimilars, Oncology Spend, Pharmacy Trends, Specialty Spend
Magellan Rx Management
Magellan Rx Management
http://ww1.magellanrxmanagement.com
Magellan Rx Management is a next-generation pharmacy benefit manager (PBM) that helps our customers and members solve complex pharmacy challenges by connecting them to the people, technology, and information they need to make smarter healthcare decisions.
Previous post Depression and Suicide Next post Accreditations and their Industry Value

Related Articles

Frau, Zuhause, München, Bayern, Deutschland

Depression Screening

by Varun Choudhary, M.D.
October 5, 2020
Magellan Health launches new thought leadership website

October is National Breast Cancer Awareness Month

by Magellan Health Insights
October 9, 2018
rx rotation

No Substitution for Experience

by Magellan Rx Management
August 18, 2020

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Magellan Health Logo

To learn more about how Magellan can support your organization, please visit MagellanHealth.com.

Topic suggestions or questions?
Send us your ideas at

Connect with us:

Trending Topics

  • A Present Day Look at PTSD
  • Medicine Cabinet Minefield: How old prescriptions drugs are fueling an opioid addiction crisis
  • The Trends and Complexities of Provider-Administered Drugs

Categories

Stay in the Know

Get the latest news and trending insights sent straight to your inbox.


HomeAboutResourcesVoicesContact
© 1999-2016 Magellan Health, Inc. All Rights Reserved.