Generics were supposed to keep prescription drug costs under control. But even with a steadily expanding market for low-cost alternatives, insurers are still seeing prescription drug costs surging.
Among Blue Cross Blue Shield insurers, that cost reached over $100 billion last year, 20% of the insurer's expenditures.
In 2017, 83% of prescriptions filled by BCBS members were low-cost generics, according to an annual report form the Blue Cross Blue Shield Association compiled from data on all 88 million Blues members. Yet overall drug spending among beneficiaries still rose 2%.
Although insurers have been successful at pushing members toward generic drugs, those remaining on branded drugs make up a large portion of the spending. Since 2016, branded drugs fell to 17% of prescriptions filled by BCBS members, but they accounted for the vast majority, 79%, of drug spending, totaling nearly $80 billion.
Unfortunately, it doesn't appear to matter much if the market share of patent-protected drugs shrinks as long as the prices of those drugs increase. Between 2016 and 2017, branded drug spending grew 5%, while generic drug spending declined only 3%, according to a BCBS release.
But even those figures fail to underline the impact made by specialty heavy hitters like Humira, Remicade, Enbrel, Novolog and Neulasta. These specific drugs make up an enormous portion of drug spending: In 2017, BCBS' branded specialty drug spending rose to $27 billion, even though they made up just 3% of branded prescriptions filled.
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In some cases, efforts to boost generics have been successful. Investments in generics facilities and an aggressive use of prior authorization forms have certainly lowered the rise of branded drugs—even as the latter has massively frustrated some providers.
“The good news is that more of our members are using generics when they are available, and doctors are prescribing them more often to their patients,” said Richard Snyder, M.D., senior vice president and chief medical officer at Independence Blue Cross, a subsidiary of BCBSA, in the release.
If anything, the relative success of generics has underlined just how highly priced these branded drugs are—and how much more expensive drug spending might be if generics hadn't reined it in.
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Insurers are still on the lookout for more ways to reduce drug spending. Independence, for instance, launched PreCheck MyScript, a digital tool that can tell providers in real time how much a drug will cost a patient.
The hope is that by making this information front and center for providers, the patient and physician can make a more informed decision about which drugs are affordable in addition to clinical effectiveness. That information isn't always completely transparent to providers, who tend to focus more on picking the ideal drug for a given scenario.
“Providers have sufficient information regarding a medication’s clinical efficacy and safety, but they tell us that they often don’t have time to gain insight into member-specific drug benefit limitations, member out-of-pocket costs, lower cost alternatives, and other factors affecting a member’s drug utilization and adherence,” Eric M. Estes, R.Ph., senior director of pharmacy services at Independence, said in a release.