Pharmacy Benefit Management (Past, Present & Future)

[Pages:41]Pharmacy Benefit Management

(Past, Present & Future)

Presented By: Jim Wallace, R ph.

Table of Contents

History Drug spend statistics Cost drivers Smoke and mirrors Cost containment strategies

Past strategies Current strategies Future strategies

Conclusion

Prescription Drug Business

Pre-1960

Major medical Shoe box effect

1960 - today

Drug cards (Pharmacy Benefit Managers)

Point of sale copayments Cost control

Mail service Specialty pharmacy

Pharmacy Benefit Managers

PCS (Pharmaceutical Card System) 1968

Manufacturer acquisitions

Medco acquisition of Merck

1993

Eli Lilly acquisition of PCS

1994

Smith Kline Beacham buys

Diversified Pharmaceutical Services 1994

Current ownership

Express Scripts & Medco

2007

United Health & Catamaran

2015

CVS & Caremark

2007

Rite-Aid & Envision

2015

Top 15 Drug Classes

RANKED BY 2016 PMPY* SPEND

TREND

RANK TYPE THERAPY CLASS

PMPY SPEND UTILIZATION UNIT COST

1 S Inflammatory conditions

$118.21

11.3%

15.1%

2 T Diabetes

$108.80

5.3%

14.1%

3 S Oncology

$60.70

11.9%

9.6%

4 S Multiple sclerosis

$58.63

-1.3%

7.4%

5 T Pain/inflammation

$51.64

0.6%

0.9%

6 S HIV

$39.92

5.5%

16.2%

7 T High blood cholesterol

$38.45

-0.9%

-6.5%

8 T Attention disorders

$36.30

5.6%

-5.5%

9 T High blood pressure/heart disease $34.52

1.5%

-10.6%

10 T Asthma

$30.42

3.3%

-2.6%

11 S Hepatitis C

$25.26

-27.3%

-6.7%

12 T Depression

$23.46

4.8%

-6.4%

13 T Contraceptives

$20.97

3.0%

-2.8%

14 T Heartburn/ulcer disease

$20.93

-1.3%

-22.7%

15 T Skin conditions

$20.76

1.2%

0.4%

Other thera classes

$389.07

0.0%

0.3%

TOTAL

$1,078.04 1.3%

2.5%

S = Specialty T = Traditional * Per member per year

TOTAL 26.4% 19.4% 21.5% 6.1% 1.5% 21.7% -7.4% 0.1% -9.1% 0.7% -34.0% -1.6% 0.2% -24.0% 1.6% 0.3% 3.8%

EXPRESS SCRIPTS 2016 TREND REPORT

Specialty Drug Trend

TOP 10 SPECIALTY THERAPY DRUGS

RANKED BY 2016 PM PY* SPEND

RANK

DRUG NAME

THERAPY CLAS S

1 Humira Pen? (adalimumab)

Inflammatory conditions

2 Enbrel? (etanercept)

Inflammatory conditions

3 Tecfidera? (dimethyl fumarate)

Multiple sclerosis

4 Copaxone? (glatiramer)

Multiple sclerosis

5 Harvoni? (ledipasvir/sofosbuvir)

Hepatitis C

6 Revlimid? (lenalidomide)

Oncology

7 Gilenya? (fingolimod)

Multiple sclerosis

8 Truvada? (emtricitabine/tenofovir disoproxil fumarate) HIV

9 Humira? (adalimumab)

Inflammatory conditions

10 Stelara? (ustekinumab)

Inflammatory conditions

PMPY S PEND

% OF TOTAL S PECIALTY

S PEND

UTILIZATION UNIT COS T

TREND UNIT COS T

$ 45.11

$ 26.82

$ 13.49

$ 12.42

$

9.86

$

9.78

$

8.48

$

8.44

$

8.15

$

8.13

11.3% 6.7% 3.4% 3.1% 2.5% 2.5% 2.1% 2.1% 2.1% 2.0%

10.5% -4.3% -2.1% -12.3% -49.5% 13.7% 5.6% 27.1% 2.8% 18.2%

17.9% 10.9% 10.5% 1.6% -4.3% 10.6% 9.0% 10.7% 16.0% 3.7%

TOTAL

28.4% 6.6% 8.4% -10.7% -53.8% 24.3% 14.6% 37.8% 18.8% 21.9%

*Per member per yea r

Cost Drivers

New drugs Manufacturer price hikes Advertising

Direct to consumer Drug samples Copay assistance/coupons

Cost Drivers

New Brand Drugs

First-Time Brand Drug Approvals 2016

Drug Name

Active Ingredient

Xiidra Epclusa Zinbryta Taltz Zepatier

lifitegrast ophthalmic solution sofosbuvir and velpatasvir daclizumab ixekizumab elbasvir and grazoprevir

Approval Date Indication

7/11/2016 6/28/2016 5/27/2016 3/22/2016 1/28/2016

Dry Eyes Hepatitis C Multiple Sclerosis Plaque Psoriasis Hepatitis C



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