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Specialty Drugs Account for 40% of Employers' Drug Costs

By Jack O'Brien  
   August 20, 2019

A survey found that specialty drugs have an outsized impact on employer prescription drug spending.

New data released Tuesday by Willis Towers Watson (WTW) indicates employers are spending a sizable amount on a small subset of prescription drugs.

In analyzing data from the WTW Rx Collaborative, the coalition found that about 40% of its total drug costs were the result of specialty drugs that account for less than 1% of prescriptions.

This far exceeded the 10 most popular drugs, which account for one-fifth of the overall drug costs for the coalition, though the drug-price inflation rate for members decreased for the third consecutive year, posting at 3.5% in 2018.  

The WTW data is in line with similar findings about how specialty drugs and the rising costs of prescription drugs are hampering employers around the nation.

Related: Employers to Combat Rising Health Benefit Costs With Virtual Care Solutions

Additionally, WTW Rx Collaborative members enjoyed lower cost trends in the aggregate than those using large-scale pharmacy benefit managers (PBM), according to the WTW report.

Coalition members relying on large PBMs incurred a negative 1.6% cost trend in 2018, while other employers ended up paying 0.4% more in plan costs, according to the report.

A PricewaterhouseCoopers study from June stated that the medical cost trend is expected to rise next year, hitting 6% for the first time since 2016

Related: 1.3% of Enrollees Account for Nearly 20% of Spending in Larger Employer Health Plans

Specialty injectable immunotherapy drugs targeting psoriatic arthritis, rheumatoid arthritis and Crohn’s disease led the way in 2018 as the top three drugs ranked by gross cost spend.

The survey also found that the lead four non-specialty drugs were for diabetes, including two injectable insulin drugs. This followed up evidence that the average Rx Collaborative cost per prescription for insulin rose 4% last year.

Related: HHS Drug Pricing Advisor to Depart

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

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