Growth in prescription drug spending slowed to 11.3% during first quarter 2003 as consumers used more wallet-friendly generic drugs and, as a result of a mild flu season, fewer antihistamines and cough-cold remedies. Lower, too, was use of estrogen drugs because of safety concerns raised by studies published last year.
According to pharmacy benefit manager Express Scripts, during the previous year first quarter, spending grew at a much faster 16.9% rate. The company, which serves over 50 million consumers, announced the first quarter drug spending data today at its annual research Outcomes Conference here.
Other research presented at the conference found that physicians welcome and act on information presented to them regarding potential safety hazards involving prescriptions they have written. A significant number -- 38% -- said they changed or modified their patient's therapy as a result of the information.
Commenting on the slowdown in prescription drug spending, Express Scripts Chief Executive Officer Barrett Toan said, "The drops in antihistamine, cough-cold and estrogen drug utilization were one-time events, but the cost-reducing effect of expanding generic drug use will continue to help make prescription drugs much more affordable for years to come."
Greater use of generic drugs reduced the dollar outlay for prescription drugs by 3.2% during the first quarter and, for all of 2002, by 2.1%. During the first quarter 2003, 47% of all prescription claims processed by Express Scripts were for generic drugs, up from 43% a year earlier.
During the next five years, patents will expire on brand-name drugs representing $32.3 billion in U.S. sales last year. For example, this year, the ACE inhibitor Monopril(r) and the cancer drug Nolvadex(r) are among the brand-name drugs scheduled for patent expiration. The 2004 patent expiration list includes the antibiotic Cipro(r) and the anti-depressant Celexa(r), among others.
"Taking full advantage of the generics cost-saving opportunity is critical because the aging of the baby boom generation plus lower treatment thresholds and under treatment involving increasingly prevalent conditions such as high cholesterol will sustain overall utilization growth," said Toan. During the first quarter, utilization of many widely used drugs increased at double-digit rates. These include medications for blood pressure (10.6%), high cholesterol (14.1%) and diabetes (14.5%).
Also released at the Express Scripts Outcomes Conference was the company's comprehensive annual Drug Trend Report for 2002. For the entire year, prescription drug spending increased 18.5% to $585.60 per member per year, up from $494.20 in 2001.
Fully a third of the 2002 overall drug trend increase was attributable to just four drug classes -- gastrointestinal, anti-cholesterol, antidepressant and blood pressure drugs -- primarily due to more people using these drugs.
The inflation rate for common drugs (drugs available in 2001 and 2002) grew by 7.5% percent -- the fifth consecutive year that inflation exceeded 5 % and the highest rate seen since the Drug Trend Report was initiated. Inflation accounted for 43.4 % of the overall 2001-2002 drug expenditure increase.
Express Scripts Helps Clients Achieve Lower Drug Trends
The actual drug-trend experience of Express Scripts clients varied, depending on the extent to which they implemented the company's cost-management recommendations. For example, clients adding a third tier to their copayment structure -- where members typically pay the most for non-formulary brand-name drugs, less for formulary brand name drugs and the least for generics -- limited their drug trend to 7% on average. In another example, clients already using a three-tier copayment structure that modified copayment levels experienced a 10.8% trend.
Another increasingly popular cost-management tool is step therapy, whereby members receiving a new prescription for a brand-name drug instead try a generic drug, with their physician's approval. The number of Express Scripts members in step-therapy programs grew significantly between 2001 and 2002, from two to nine million. Much of the increase occurred following reports of step-therapy cost savings at last year's Express Scripts Outcomes Conference.
Physicians Respond to Drug Safety Warnings
The study of physician response to safety warnings involved two regional health plans serving about 1.5 million members. Researchers followed up with physicians who had received 12,000 letters alerting them to a potential safety hazard between April 1 and August 31, 2002. The majority of warnings were for probable drug-drug interactions.
The top ten drug-related problems for which physicians received warnings were:
Type Combination % of TotalDrug/Drug Simvastatin/Fibrate 8.9%Disease/Drug Alzheimer/Anticholenergic 7.4%Disease/Drug Asthma/Beta Blocker 7.1%Drug/Drug Warfarin/Amiodarone 4.8%Disease/Drug Gout/Thiazide 4.2%Drug/Drug Warfarin/NSAID 3.6%Drug/Drug Digoxin/Amiodarone 3.2%Drug/Drug Warfarin/Macrolide 3.1%Drug/Drug Lithium/NSAID 3.0%
Sending warning letters to physicians after a prescription has been filled -- i.e. retroactive drug utilization review (DUR) -- supplements the real-time delivery of warnings to pharmacists at the time a prescription is filled, i.e. a concurrent DUR program.
Last year, under Express Scripts' concurrent DUR program, the company sent an estimated 33 million safety warnings to pharmacists -- about 10% of the 355 million retail prescription claims processed by the company. For nearly 600,000 of the warnings, the pharmacist changed or withdrew the prescription claim, potentially averting harm to more than 1,000 people a day.
Most warnings were for therapeutic duplication, drug-age warning, drug-drug interaction, high-dose warning, pregnancy warning, ingredient duplication, gender contraindication, and drug-disease interaction. "The average Express Scripts member receives care from more than two physicians and more than one retail pharmacy. Because we often have patients' most complete prescription histories, Express Scripts is in an excellent position to make the use of prescription drugs safer," said Toan.
One of the largest pharmacy benefit management (PBM) companies in North America, Express Scripts, Inc., (Nasdaq: ESRX) makes prescription drugs more affordable and their use safer guided by a legacy of independence. Express Scripts provides integrated PBM services, including network-pharmacy claims processing, mail-pharmacy services, benefit-design consultation, drug-utilization review, formulary management, disease management, medical- and drug-data analysis services, medical-information management services and informed-decision counseling services through its Express Health Line(sm) division. The company also provides distribution services for specialty pharmaceuticals through its Specialty Distribution subsidiary and sampling services through its Phoenix Marketing Group subsidiary. Express Scripts is headquartered in St. Louis, Missouri. More information can be found at http://www.express-scripts.com, which includes expanded investor information and resources.
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