Drug Spending Soared 18% in 2018

March 22, 2019

Effective management strategies are needed for medications billed through medical benefits.

On average, drug spending climbed 18% in 2018, according to a new report.

Commercial per-member-per-month (PMPM) medical drug spend increased to $29.97, which is above the 14% average annual trend over the last five years, according to Magellan Rx Management, the PBM division of Magellan Health, in its annual Medical Pharmacy Trend Report. 

Similarly, Medicare PMPM saw its largest spike of 12% to $52.19, far exceeding the average annual trend of 5%. Magellan attributes the rise to increases in PMPM spend and the use of immuno-oncology agents and other new pharmaceuticals.

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Oncology had the highest PMPM spend across all lines of business. Rituxan (rituximab), Herceptin (trastuzumab) and Avastin (bevacizumab) remained in the top five drugs for commercial plans. By 2022, chimeric antigen receptor T-cell therapies (CAR-T) for oncology immunotherapy treatment are projected to have an increase in PMPM spend of 581%, according to Magellan Rx Management.

“The data shows that the trend over the last five years for medical pharmacy drugs was 68%, representing the largest growth over the last nine years, reinforcing the need for effective management strategies in medications billed through the medical benefit,” Magellan Senior VP  Kristen Reimers, RPh, said in a statement.