Medco report shows growth in specialty Rx

6/29/2009

FRANKLIN LAKES, N.J. —Consumers have been switching en masse to generic and OTC drugs to cope with difficult economic conditions, but growth in drugs used to treat complex illnesses and health conditions has helped push branded drug spending growth to its highest level in five years, according to a report released last month by one of the country’s largest pharmacy benefit managers.

The “2009 Medco Drug Trend Report,” which measures year-over-year prescription-drug spending growth among the company’s clients, showed that prescription-drug spending growth was 3.3% last year, thanks largely to higher spending on specialty drugs.

Specialty drugs—expensive, branded biotech and pharmaceutical drugs used to treat such diseases and conditions as rheumatoid arthritis, cancer, organ transplants and HIV that require regimens tailored to individual patients and extra care in the supply chain—accounted for 60% of that growth. According to the report, removing them from the total drug trend would reduce that figure to 1.3%, even though generic drugs accounted for more than 64% of all prescriptions dispensed.

“New products and the absence of a regulatory approval process for lower-cost generic versions of specialty drugs have fueled spending growth in this category,” said a Medco statement coinciding with the report.

Most specialty drugs are expensive biologics that treat relatively rare conditions and lack cheaper competitors on the market. The top 15 drugs ranked by U.S. sales for 2008 listed in the IMS Health figures included the rheumatoid arthritis and psoriasis drug Enbrel (etanercept) by Amgen and Wyeth; Johnson & Johnson’s Remicade (infliximab), which treats the same conditions; and Amgen’s Neulasta (pegfilgrastim), designed to fight cancer. Likewise, IMS’ list of the top 15 therapeutic classes measured by U.S. sales included monoclonal antibodies, erythropoietins and biologics used to treat arthritis. None, however, are included in the lists of the top 15 drugs or therapeutic classes ranked according to dispensed prescriptions.

“Given that specialty drugs are five times to 100 times the cost of traditional pharmaceuticals, and these drugs are growing in terms of patient use because of new treatments for diseases previously untreated, new treatments for diseases previously treated with less-than-effective medicines, and more patients with targeted diagnoses gaining access to these drugs than previously, the growth rate of specialty drugs relative to the total growth rate in pharmaceutical use is considerably larger,” Health Strategies Group research director for specialty pharmacy management Howard Flushman told Drug Store News.

Flushman, who said he considered Medco’s report reflective of overall industry trends, cited an IMS Health study at the end of last year that reported specialty drugs accounted for about 25% of the total U.S. pharmaceutical market in terms of revenue dollars, though his firm expected that number to reach 29% by 2011.

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