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Pharmacy pricing up – driven by brands

Prices for brand drugs were up 13 percent in Q3 2012 from Q3 2011, while generic prices actually decreased 21 percent.  

That’s the headline from Express Scripts’ just-released drug trends report, which attributes the huge price increase to brand manufacturers seeking to maximize profits before their popular drugs’ patents expire. The good news is increased generic utilization helped keep total drug costs relatively flat.

Several specific drugs saw even larger increases.  Drugs to treat Hepatitis C (not uncommon in workers’ comp, especially for health care workers) had the largest specialty spend increase, 117 percent.

To give you a frame of reference, ESI’s total annual drug spend is slightly more than $800 per person.

Utilization was up 0.7%, while prices (overall) increased 2.8%.  Combining utilization and price produces cost trend.

A quarter of drug costs are for antidepressants and mental/neuro disorder medications.

Notably, opioids and narcotics represent a very small percentage of ESI’s total spend, which is based on group health, medicare, medicaid, and other lines.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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