PBM Data Shows Decline in Medicine Spending Growth, But What Are We Getting in Return?
March 7, 2018
Recent reports from pharmacy benefit managers (PBMs) show that drug spending growth is slowing, with percentage increases well below the rate of medical inflation. PBMs are the middlemen who manage the drug benefit for health insurance companies. The new data from the PBMs look at the net price – the actual prices paid by plans, after rebates – not the list prices.
Express Scripts’ annual Drug Trend Report shows that for private employer and individual health plans, spending on medicines rose just 1.5 percent in 2017 – the lowest growth in 24 years, and the increase attributable to increase in unit costs was even lower: 0.8 percent. Medicare drug spending was slightly higher at 2.3 percent (with the unit cost increase of 1.2 percent), while the Medicaid safety net program saw a 3.7 percent spending increase (with a 2.8 percent unit cost increase) last year.
Prime Therapeutics, a PBM for several Blue Cross/Blue Shield companies, released a report supporting similar findings. According to Prime, drug costs fell in all three areas of business: commercial spending was down 0.2 percent (with a unit cost drop of 3.4 percent), Medicare Part D spending fell 0.8 percent (with a unit cost drop of 1.9 percent), and pharmaceutical spending in Medicaid plans dropped 5.4 percent (with a unit cost drop of 6.2 percent).
While the data are encouraging, they only focus on one dimension of health care spending and do not assess whether costs rose or fell for patients. In order to make medicine more affordable for patients challenged by out-of-pocket costs, we need take a more holistic view of health care spending beyond pharmaceuticals. This includes looking at other spheres in the health system where prices have increased or decreased to see why they’ve changed and how it has impacted patient care.
We encourage you to join us in looking at the nation’s health care spending outside of traditional silos, and instead start looking what impact the spending shifts have on patients. Share your thoughts using the #GoingBelowTheSurface hashtag.