If you missed the number that many sources were reporting last year, it’s predicted that prescription drug spending could reach as high as $610 billion by 2021. Hard to fathom such an enormous total, isn’t it? We’re seeing health care expenditures rising in all sectors, but prescription drug costs are the fastest growing, and they also represent a huge chunk of the overall spending.
This growth isn’t so much related to utilization rates as it is to the high level of inflation that’s attached to drug costs. There were 46 new drugs approved in 2017 – many of which were specialty – and for a while now, we’ve been seeing a trend toward increased spending on specialty drugs instead of generics. The good news is this: the patent protection for many brand names will begin to expire in 2018 and beyond, which will allow more off-brand, less expensive alternatives to enter the market and create more competition.
We’ll continue to see consumers and policymakers put more pressure on drug manufacturers to control their extreme price hikes and make prescriptions more affordable to consumers. Some of these manufacturers have been receptive to this idea and pledged to do so, but there’s still a long way to go, especially in the specific areas where a strong monopoly exists.
As 2018 unfolds, I suspect that many employer-sponsored health plans will turn to prescription management programs to help deal with the rising drug costs. These programs can really have a positive impact in terms of monitoring a plan’s total drug spend and identifying smart strategies for saving. On top of that, they do a great job with member education. Why is that so important? It’s simple: when members better understand the how, what and why behind the medications they are prescribed, they are more likely to be informed about all of the options available to them. That, in turn, means members may have the opportunity to take advantage of high-quality, more cost-effective options.
The problems with skyrocketing prescription drug costs aren’t going away overnight, but as awareness spreads and more voices get involved, solutions may be on the horizon. In the meantime, we will diligently continue to on your behalf to develop additional savings and cost-control strategies.