A rise in spending on specialty drug treatments offset that
decline, however, and drove total US payments for prescription drugs up 2.7% last
year, Express Scripts Holding Co said on Tuesday.
Spending on drugs to treat high cholesterol and high blood
pressure fell 1.5% among customers who receive their prescription benefits
through commercial insurers, the report said. For Express Scripts, profit margins
on generic drugs are higher than those on more-expensive branded drugs.
Companies that provide their employees' insurance also
encourage the use of generic drugs to bring down their healthcare costs. The
lower prices for common drugs came after the patents on branded versions ran
out, putting cheaper generic competitors onto the market.
selling their drugs
Big pharmaceutical companies like Pfizer Inc and Merck &
Co hold the patents on drugs for about a decade after they start selling them.
Then competitors like Teva Pharmaceuticals Ltd can start selling their own
President Barack Obama's healthcare overhaul law rewards the
use of generic drugs as a way to decrease healthcare spending, which rose about
4% last year and accounts for about 17% of gross domestic product.
The patent for Pfizer's Lipitor, a cholesterol treatment
that was once the world's best-selling drug, expired in November 2011. Cheaper
generics hit the market soon after, which sharply reduced spending on
treatments in 2012."The move towards lower-cost generic alternatives has
had a tremendous impact," said Sharon Frazee, vice president research and
analytics at Express Scripts.
In commercial insurance plans, the average price of medicine
for high cholesterol fell nearly 10% to $47.87 (R 432.42) for a 30-day supply
in 2012.Express Scripts processed 1.4 billion prescriptions in 2012, including
for Medicare insurance for elderly people and Medicaid for the poor and
disabled. It prepares separate reports for those sectors.
The company said this was the first decrease in commercial
insurance prescription spending for the most common drugs since 1993, when it
began collecting data. Spending on specialty medications, which include
rheumatoid arthritis, cancer and hepatitis C drugs, rose 18.4% in 2012.
These specialty drugs, which can cost more than $10,000 per
month, accounted for 24.5% of the nation's total spending on prescription
drugs. Prescription drugs for diabetes accounted for the biggest share of
customer outlays on any treatment class.
Increase in diabetes
Spending on those medicines rose 11%, outpacing 2011's
increase of 7%. Both the cost and use of diabetes drugs went up, Frazee said.
About one-third of Americans are diagnosed as obese, which has led to an
increase in the number of people diagnosed with diabetes.
Spending on hepatitis C increased 34%, more than any other
type of treatment, primarily because of two new drugs that hit the market in
May 2011 - Vertex Pharmaceuticals Inc's Incivek and Merck's Victrelis. Spending
is due to increase 32% in 2013 and another 56% in 2014, the report said. Prices
of brand-name drugs rose 12.5% in 2012, according to the Express Scripts
Prescription Price Index, which is based on a basket of the most highly used of