Understanding pharmacy trend is important for developing robust, cost-saving specialty drug management strategies. But did you know you can’t really compare one trend number to another? Every PBM uses different methodologies, data sets, and calculations to arrive at their pharmacy trend number.

Additionally, one of the largest cost drivers of specialty spend today—prescriptions drugs dispensed through the medical benefit—is typically missing from pharmacy trend statistics. When you combine pharmacy benefit with medical benefit spend, you get what we like to call big ‘T’ Trend. In fact, you need to combine both to see there is as much, if not more, specialty spend going through the medical benefit today that is going unmanaged.

The ninth edition of the Magellan Rx Management Medical Pharmacy Trend Report includes a comprehensive medical pharmacy trend analysis and data benchmarking for provider-administered drugs which are infused or injected and paid under the medical benefit.

What are the top medical pharmacy trends you need to know to stay current with your organization’s management strategies?

1. Per-member-per-month (PMPM) spend on provider-administered drugs increased by 18% for commercial members in one year, reaching nearly $30 PMPM. The five-year trend is 68% — the highest jump in 9 years of reporting.
2. Across all lines of business (LOB), more than 90% of total drug spend on the medical benefit is being driven by a fraction of members who are taking specialty medications.
   
3. Emerging oncology treatments, particularly immunotherapy, are a major medical pharmacy trend driver. Keytruda had an impactful increase in utilization, with PMPM trend rising upwards of 200% and breaking into the top 15 drugs across all LOBs.
4. In Medicare, oncology and oncology-support drugs accounted for 58% ($30.17) of the medical benefit drug PMPM spend.
5. Chimeric antigen receptor (CAR) T cell gene therapies are predicted to grow 530% by the year 2022.
6. Factor products to treat hemophilia demonstrated the highest trend in both commercial (62%) and Medicare (185%), ranking #5 and #6, respectively. The average cost per claim is close to $20,000 across both LOBs.
7. Although 68% of payers are now using a site of service (SOS) program, SOS continues to be a concern with drugs administered in the hospital outpatient setting continuing to cost 2-3 times more than physician offices and home infusion.
8. When it comes to biosimilars, 64% of payers stated that the price of the biosimilar most impacted reimbursement decisions.
9. The top five drugs in commercial (Remicade, Neulasta, Rituxan, Herceptin, and Avastin) have remained consistent over the last nine years of reporting. However, all of these drugs have FDA-approved biosimilars that should all be available on the market in the next few months and, looking ahead, this landscape may look different over the next few years with this increased competition.
10. The number of billion-dollar drugs in 2017 was 34 and is projected to grow 26% to 43 drugs by 2022. All 43 are currently available on the market today, representing increased utilization and growth of these products in the next five years and reinforcing the need for proper utilization management, targeted dosing optimization and other management tactics of these high cost medical specialty drugs which will help to promote quality of care and prudent savings of healthcare dollars.

For more in-depth analysis on the latest in medical pharmacy trend and spend, watch our on-demand webinar!

Precision medicine describes an approach to treatment based on an individual patient’s unique genetic, environmental, and lifestyle factors. Genetic data, in particular, is central to the concept of precision medicine.

Perhaps more so than with any other disease state, precision medicine has had a definitive impact on the treatment of cancer. With the approval of imatinib (Gleevec®) to treat chronic myeloid leukemia (CML) nearly two decades ago, the concept of treating cancer based on underlying genetic anomalies was launched. In the case of CML, the underlying genetic abnormality is central to the diagnosis of the disease, but this is not the case for many other types of cancer. Specific genetic mutations may or may not be present in different patients with the same type of cancer. Identification of specific genetic mutations within cancer cells has led to the development and United States Food and Drug Administration approval of approximately 30 different “targeted” cancer treatments.

Tissue from the patient’s tumor is considered the gold standard for establishing the diagnosis and for identifying potential precision medicine targets. However, several challenges are associated with obtaining and interpreting information from tumor biopsies. Tumors may be located in areas of the body that are difficult to access and may require invasive procedures in order to obtain the needed tissue.

The use of liquid biopsies in place of tumor tissue biopsies is an emerging technology that may help to accelerate the use of precision medicine. The term liquid biopsy most commonly refers to the detection of tumor DNA fragments in the patient’s blood. This circulating tumor DNA (ctDNA) is the result of a dying cancer cell releasing fragments of DNA into the bloodstream. In addition to blood, liquid biopsies may also have utility with other bodily fluids, including urine, cerebrospinal fluid, and saliva, for example.

Liquid biopsies represent the potential for an easily retrievable source of information about a tumor’s genomic makeup, and they may have other advantages as well. Traditional tumor biopsies are often done on a single tumor lesion, which may inadvertently lead to sampling bias that does not capture the heterogeneity found in many tumors and/or different metastatic sites of the tumor. Conversely, ctDNA may provide a better “big picture” of the overall genetic makeup of the tumor cells. Another potential utility for liquid biopsies is the improved ability to monitor changes in the tumor’s genetic profile over time. Serial liquid biopsies can detect when a tumor acquires resistance to the current therapy before other manifestations of tumor progression are established. Liquid biopsies may also be able to spare patients more intensive treatments that offer limited added benefit. For example, in some types of cancers, the detection of microscopic residual disease remaining after surgery may identify patients who will benefit from further systemic therapy. Conversely, patients without this detectable residual disease by ctDNA may be spared from further toxic therapy that would not increase their chance of cure. TPerhaps the most hopeful use of ctDNA technology is the ability to screen and identify asymptomatic patients who are at a very early stage of their cancer when the possibility for cure is much higher.

For now, tumor tissue biopsies remain the standard of care in the majority of clinical situations; however, if the promise of liquid biopsies is validated through further study, more patients may be able to benefit from the promise of precision medicine.

In January, the Food and Drug Administration’s (FDA) Center for Drug Evaluation and Research (CDER) published Advancing Health through Innovation: 2018 New Drug Therapy Approvals. This report provides a benchmark for approvals and highlights the game-changers approved in 2018. Compared to 2016 and 2017, in which CDER approved 22 and 46 new drugs, respectively, in 2018 a total of 59 novel agents were approved. This number does not even include new and expanded uses of already approved drugs, new formulations, new dosage forms, or the seven biosimilar approvals. This marks the largest number of novel approvals in over two decades and far exceeds the average of 33 novel approvals per year in the past 10 years, surpassing the record setting approvals in 2017. Figure 1 outlines approvals and filings over the past 10 years.

Several potential explanations may account for this uptake in approvals in the past couple years. The FDA’s leadership, with its continued strategic initiatives, may be partly responsible for the increase. In early 2017, the FDA was criticized following the lower than average approvals seen in 2016. Public interest in opioid abuse and dependence treatment, access to drugs for rare diseases, drug shortages, and competition potentially affecting pricing have also put the FDA at the forefront of the public’s mind, further challenging the FDA to demonstrate action in the public’s interest. Finally, additional defined methodology for evaluating data in rare diseases, such as real-world and patient reported outcomes, may also have played a role.

Last year, all 59 novel drug approvals met their Prescription Drug User Fee Act (PDUFA) goal dates. In 2018, 32% were considered first-in-class and 58% were approved for rare diseases (Orphan Drugs). Priority Review was granted to 73% of new drugs, 7% received Accelerated Approval, 24% were designated as Breakthrough Therapy, and 41% garnered Fast Track designation. Furthermore, 95% were approved in the first review cycle, and 71% were approved in the US prior to approval in other countries. A breakdown of the types of drugs approved in 2018 is illustrated in Figure 2, with drugs in the expansive oncology spectrum once again dominating the approvals.

Some of the notable 2018 approvals included the first non-opioid drug approved to reduce opioid withdrawal symptoms, a new antiretroviral for multidrug resistant human immunodeficiency virus-1, a new class of drugs for migraine (calcitonin gene-related peptide receptor antagonists), the first FDA-approved drug derived from marijuana, the first treatment approved for multiple sclerosis in children, expanded options for cystic fibrosis, and the first antibiotic approved under the Limited Population Pathway for Antibacterial and Antifungal Drugs.

Among the several Orphan Drugs approvals were drugs for Fabry disease, phenylketonuria, X-linked hypophosphatemia, Lennox-Gastaut syndrome, Dravet syndrome, hemophagocytic lymphohistiocytosis, adenosine deaminase deficiency, and Lambert-Eaton myasthenic syndrome.

Although 2019 approvals have begun more slowly, given the substantial number of approvals in 2018, it appears that the large number of approvals from 2017 was not an anomaly but, perhaps, the continuation of a trend.

One of the greatest challenges in managed care is staying up-to-date on the constantly evolving healthcare landscape. This can be especially overwhelming for high cost, complex specialty disease states. Payers are often faced with making difficult coverage decisions for hundreds of disease states as they also juggle prioritizing daily job tasks, such as managing drug spend, developing clinical programs and policies, and implementing member engagement strategies. In face of this challenge, payers have reported difficulties handling drug requests for complex treatments, particularly for off-label use for specialty drugs in high cost, rare disease categories, which are poorly understood and have limited clinical guidelines.

To address this unmet need, some payers seek the assistance of key opinion leaders (KOLs), also known as thought leaders. KOLs are considered experts in their respective fields, are regularly sought out by their colleagues for opinions or advice, are early adopters of new treatments or procedures, establish best practice protocols for patient care, and many managed care organizations depend on them to better understand specific disease states and new therapies.

As part of its value-based approach to medical and pharmacy benefit management, Magellan Rx Management has developed an Expert Clinical Network (ECN) of local, national, and world-renowned experts and has access to more than 120 key thought leaders in several disease categories, including rare disease such as hereditary angioedema, hemophilia, oncology, and more. These experts assist clients with challenging prior authorization case reviews, peer-to-peer discussions, drug policy development, and formulary guidance. Ultimately, the ECN offers health plans and providers the opportunity to make a more informed decision that leads to positive patient outcomes.

One case study from the ECN program was for a request from a client to review a complex prior authorization case. The request was for prophylaxis therapy in a patient who was currently using Firazyr for angioedema. The KOL provided an evidence-based recommendation based on patient’s medical history and current burden of disease. The KOL did not believe the patient was an appropriate candidate for prophylaxis therapy which resulted in the patient being referred to a center of excellence for additional evaluation and a potential cost avoidance of $44,000 per month.

As payers are faced with making difficult clinical coverage decisions for hundreds of disease states, assistance from a KOL can help in the reduction of inappropriate medication use, while offering the highest value and quality of care in disease management. To learn more download a copy of our MRx Report.

Specialty drug spend made up 41% of all drug spend ($318 billion) for the United States and European countries in 2017(1). New projections show specialty drugs will contribute to ALL of 2018 total drug spend growth due to a combination of explosive pharmacy trend in the specialty drug arena as well as declines in traditional medications(1). With thousands of specialty products in the pipeline expected to drive a significant portion of future medication costs and inflationary trends,(2) specialty growth has exceeded that of traditional drugs for the tenth consecutive year(1). Not only does specialty pharmacy trend continue to soar, these medications are now being created with remarkable biotechnology and gene-altering techniques to treat the most complex, high-cost healthcare conditions such as cancer, rheumatoid arthritis, and unique rare diseases.

Many of these specialty medications are billed under the medical benefit, which makes management even more challenging when considering complex medical benefit structures, numerous places of service, varied payment models, bundled claims, and complicated data.  Payers also cite several management concerns: determining the value of specialty drugs, ensuring clinically appropriate use, and responding to the specialty pipeline(3).

Spend trend and growing payer concerns emphasize the importance of developing strategies to stay ahead of the trend and pipeline. 

The Magellan Rx Management Medical Pharmacy Trend Report , in its ninth edition, includes a comprehensive view of medical pharmacy trends in claims data, including all major lines of business (commercial, Medicare, and Medicaid). According to the report, the 5-year pharmacy trend for specialty drugs on the medical benefit is 68%, 22%, and 17% (4) for Commercial, Medicare, and Medicaid lines of business, respectively. Driven by inflation, utilization, drug mix, and shifts in site of service, medical benefit drug spend has been identified as allowed amounts of $29.97 per-member-per-month (PMPM) for Commercial members, with Medicare PMPM allowed amounts of $52.19 (an increase of 18 and 12 percent, respectively, over the last year)(4). Yet visibility into this spend has been generally limited, given the management challenges addressed above.

It is critical for payers to stay current with evolving management strategies and marketplace conditions impacting medical pharmacy utilization and spend, especially as these specialty drug costs continue to be a leading driver of overall pharmacy trends. At Magellan Rx, we understand medical benefit drug spend, pharmacy trend, pipeline, and impact—all of which is imperative to formulating innovative, effective solutions for managing specialty drug costs. Get a more detailed analysis on the latest in pharmacy trends by signing up for our free webinar on March 14 at 1:00 pm Eastern.

1. IQVIA Institute 2018 and Beyond: Outlook and Turning Points. March 2018. Available at: https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/2018-and-beyond-outlook-and-turning-points.pdf
2. Commercial Specialty Medication Research: 2016 Benchmark Projections, Milliman Research Report. December 2015. Available at: http://us.milliman.com/uploadedFiles/insight/2016/commercial-specialty-medication-research.pdf
3. EMD Serono. Specialty Drug Digest 14th Edition. 2018
4. Magellan Rx Management. Medical Pharmacy Trend Report. 9th Edition. 2019. Available at: https://www1.magellanrx.com/magellan-rx/publications/medical-pharmacy-trend-report.aspx

Prescription drug abuse is a growing issue and affects people from all walks of life. With that in mind, it’s important for the health and safety of your family and others who come into your home that you safeguard and properly dispose of prescription medications.

Safeguarding medications

• Ask your pharmacist if prescribed medicines in your home may have the potential for abuse
  Store medicine in the original container so it can easily be tracked and identified
• Secure medicine in a safe place out of reach of children and guests. Medicines should be kept in a locked medicine cabinet or a lock box.
• Create an inventory list of all medicines so you know what you have; double check it at regular intervals
• Keep track of refills—your own and other people in the household

Proper disposal

• Safely disposing of expired or unused medicine is important to the safety of everyone in your home
• Ideally, participate in a safe drug disposal program or a drug takeback day in your community
• When disposing of drugs at home, mix the medicine with an undesirable substance, such as kitty litter or some type of trash, and discard
• Remove personal, identifiable information from bottles to help prevent unauthorized refills

Additional Resources
U.S. Food and Drug Administration | fda.gov

The Partnership for Drug-Free Kids | Drugfree.org

Help is available. For additional information, visit MagellanHealth.com/MYMH

Recently, employees from Magellan Rx Management were featured on Rx Radio, a podcasting media company serving the pharmacy profession with a goal of inspiring healthcare professionals to take an innovative approach with healthcare. Host Richard Waithe, President of VUCA Health, sat down with eight of our pharmacists to talk about the future of pharmacy, and what it is like to be a pharmacist in managed care.

Listen while you are at work, out for a jog or doing homework (looking at you, pharmacy students), and go inside Magellan Rx to get the full scoop on the work that we do.

Listen here and start with whatever episode makes you happy – we recommend starting with our General Manager of Specialty, Steve Cutts.

Follow our campaign on Twitter and LinkedIn using #ThisIsMagellanRx to learn more about our team!

In today’s complex healthcare environment, we continue to see a dynamic shift in managing complex chronic conditions with life-saving drugs. This introduces additional challenges for employers and their employees, especially in terms of access and affordability.

With the evolution of prescription benefit management, it’s a critical best practice for employers to plan today for tomorrow’s challenges. This will help identify opportunities and strategies to ensure the best clinical and economic outcomes for their company and their employees while delivering high-value, cost-effective prescription benefits.

Now is the time when most employers are planning for 2019 budgets. Understanding what will drive costs creates the opportunity for strategies to ensure the right drug is used for the right patient at the right time.

We are noticing three key themes related to 2019 expected pharmacy costs:

1. Overall drug costs will continue to grow by single digits primarily through generic competition and slower growth of specialty drugs. Specialty drugs will continue to drive the overall drug trend, continuing to increase by double digits (around 11%).
2. Two conditions: Autoimmune (anti-inflammatory) and Diabetes – account for 30-35% of all pharmacy costs. Drugs used to treat complex chronic conditions such as rheumatoid arthritis, psoriasis, Crohn’s disease, and other autoimmune diseases, along with cancer and HIV/AIDS drugs, will account for about 60% of all specialty drug costs.
3. Specialty costs on the medical benefit are the most significant cost drivers today with little management. Injectable and infused drugs administered by providers to address conditions such as cancer and autoimmune disorders present unique challenges, with cancer and cancer-associated supportive drugs having a trend up to 25%; however, with less than 60% of employers having care management and prior-authorization programs for these top conditions.