Specialty Rx, diabetes to drive drug trend

The overall growth in drug spending for 2010 was 3.7%, according to the latest drug trend report by pharmacy benefit manager Medco Health Solutions. The lower increase 
was primarily due to higher rates of generic drug dispensing — more than 71% of drugs dispensed were generics. 

Drugs for diabetes have continued to drive drug trend for the fourth year in a row as the largest therapeutic category driving overall spending growth, with a drug trend of 7.6%, according to Medco’s drug trend report. The large number of diabetes patients — which most experts expect to significantly grow over the next several years — resulted in the category contributing nearly 17% of the overall growth in drug spending in 2010.

However, the real driver of drug trend is specialty drugs. IMS Health found that while money spent on branded drugs around the world will decrease as patents expire and generic usage increases, spending on branded drugs in developed countries will remain more or less the same in 2015 as it was in 2010. At the same time, spending growth on drugs for such conditions as lipid disorders, asthma and chronic obstructive pulmonary disorder is expected to slow.

As top-selling drugs for such conditions as high cholesterol and gastroesophageal reflux disease now are losing patent, new drugs for treating such therapeutic conditions as lipid disorders and GERD will probably still be developed, but they’re not guaranteed to reach sales comparable to Pfizer’s Lipitor (atorvastatin calcium), the cholesterol-lowering medication that, according to IMS Health, had sales of more than $7 billion last year. As a result, such companies as Pfizer, Merck and Bristol-Myers Squibb are moving into specialty drugs and treatments for such complex, chronic conditions as rheumatoid arthritis, multiple sclerosis and cancer.

Medco’s latest drug trend report also attests to this trend; the pharmacy benefit manager predicted that expensive cancer drugs would become the second- or third-largest drug-trend-driving category by 2015. Specialty drugs, mostly branded biologics, accounted for 70.1% of the overall drug trend, with especially strong growth in cancer drugs, whose drug trend reached 21.2%.

“New cancer drugs reaching the market are expected to double during the next several years,” Medco chief medical officer Glen Stettin said. “Early diagnosis, evidence-based treatment and enhanced coordinated care have essentially turned some forms of the condition into chronic illnesses that can be managed in the longer term. Continued innovation, including companion diagnostic or pharmacogenomic testing, can help ensure the right person is getting the right drug at the proper dose and reduce waste.”

Newly introduced drugs for cancer increased inflation in the category to 11.5% last year, and according to the Journal of the National Cancer Institute, more than 90% of cancer drugs approved since 2004 cost more than $20,000 for a 12-week course of therapy. Higher prescribing of drugs, such as Celgene multiple myeloma treatment Revlimid (lenalidomide) and Novartis leukemia and gastrointestinal tumor drug Gleevec (imatinib mesylate), drove the increases. Medco noted that many of the newer drugs are oral medications that patients can administer by themselves, thus shifting the dynamic of cancer care delivery toward the home instead of physicians’ offices and infusion centers.

“It’s an exciting time in the area of cancer treatment, but as these new, targeted treatments come to market, it is vital to ensure that each patient and caregiver understands the importance of adherence and the detailed dosing instructions associated with them,” Medco Oncology Therapeutic Resource Center national practice leader Milayna Subar said. “Helping patients manage the unique needs of their disease across the continuum of care with specialists and a personalized medicine program will help to improve outcomes for the patient and could help to manage down the projected drug trend of 15% to 17% for these new specialty medications.”

A number of drug companies appear to see specialty drugs for chronic, complex disease states as the next frontier, as the wave of expirations of patents covering treatments for more widespread conditions — known as the patent cliff — upends the blockbuster drug model that long guaranteed high profits. Pfizer and Merck have leveraged the biotech capabilities they garnered through their respective acquisitions of Wyeth and Schering-Plough to become leading developers of biotech drugs, while Bristol-Myers Squibb has built up its own biotech infrastructure and Sanofi has taken a lead in treatments for rare, genetic diseases by acquiring Genzyme.

As Medco’s forecasts would suggest, specialty drugs will see significant growth over the next few years. In addition to citing recent and upcoming launches of drugs for multiple sclerosis and cancer, IMS predicted that spending on biosimilars will exceed $2 billion per year by 2015, compared with $311 million in 2010. New biosimilars are expected to enter the U.S. market by 2014, and globally, biosimilars will account for about 1% of total spending on biologics.

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