Specialty drugs drove upward surge in pharma spending last year

Pharmaceutical spending, particularly for specialty drugs, skyrocketed last year.

Spending on drugs rose 13 percent in 2014 from the prior year, reaching $373.9 billion, according to a report from the Blue Cross Blue Shield Association (BCBSA). Specialty drugs were responsible for much of the increase, as costs in that category increased 20.1 percent last year. By comparison, the costs for non-specialty drugs rose 5.7 percent.

Only 10 specialty drugs contributed to 61 percent of the specialty drug spend, according to the BCBSA. The leading cost drivers were Sovaldi, used to treat hepatitis C and costs about $84,000 for a 12-week regimen, and Tecfidera for multiple sclerosis, which costs $55,000 for a year's prescription. 

Among BCBSA member plans, per member per month spending for drugs rose 9.3 percent last year, despite the fact that enrollees chose less expensive generic drugs 68 percent of the time when they were available last year, compared to less than 55 percent in 2012. 

Specialty drug costs are a sore point for healthcare providers and consumers, who have often accused the pharmaceutical sector of inflating their prices. The price of the hepatitis C drug doubled after the original creator of an early version of the drug was acquired by Gilead four years ago, according to Bloomberg News. "Price is the wrong discussion," Gregg Alton, Gilead's executive vice president for corporate and medical affairs, told Bloomberg. "Value should be the subject." 

But the costs are definitely wearing on the nation's pocketbooks. Approximately 576,000 Americans last year had prescription drug costs that were above the median U.S. household income, according to an Express Scripts survey,  And many cancer patients have gone into debt as the result of their drug costs.

The BCBSA does not forecast any change in drug cost trends for the foreseeable future, suggesting that specialty drug use and cost will only continue to grow. "Macro trends, such as increasingly complex manufacturing processes and extended patent life, point to continued high unit costs for these drugs in the coming years. As a result, specialty drugs' 23 percent current share of total Rx spend can only be expected to rise," the report said.

To learn more:
- read the BCBSA report 
- check out the Bloomberg article

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