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Generics help to balance specialty pharmacy costs, CVS Caremark's Insights Report states


The increase in utilization of generic drugs is driving costs down, while the increase in specialty pharmacy utilization is driving costs up, according to the 2013 CVS Caremark annual Insights Report.


The increase in utilization of generic drugs is driving costs down, while the increase in specialty pharmacy utilization is driving costs up, according to the 2013 CVS Caremark annual Insights Report.

“This creates an environment where overall drug trend growth is relatively stable-a modest 0.3% across our commercial client market-where generic forces act as a cost-lowering agent balanced by rising specialty pharmacy costs,” according to the report. The increasing rate of specialty pharmacy costs will need to be carefully evaluated and monitored over the next few years and CVS Caremark said it will work with its clients to increase access to therapies while managing cost. The report findings state that by 2016 specialty drugs are expected to account for more than 30% of its clients’ drug spend.

The Insights Report also found:

• Spending on traditional drugs (for common chronic diseases such as high blood pressure, high cholesterol) declined by 3.6% in 2012. This negative trend in traditional drugs was driven by CVS Caremark’s generic dispensing rate (GDR) of 77.4%.

This change was driven by a flood of generic launches and effective formulary management strategies, according to the report, including the implementation of narrower formularies, DAW (dispense as written) penalties, and step-therapy policies to promote the use of clinically appropriate and cost-effective medications.

• CVS Caremark’s focus on medication adherence saved its clients more than $643 million in overall healthcare costs in 2012.

• Specialty pharmacy was a clear driver of drug trend, with an increase of 18.1% in 2012.

Two specific therapeutic areas that the Insights Report highlights are treatments for hepatitis C and multiple sclerosis (MS). These are 2 areas of specialty pharmacy management that are showing growth in drug trend.

In 2012, gross trend for hepatitis C treatments across CVS Caremark’s commercial market was 48.0%; for Medicare, 76.7%; and for Medicaid, 58.7%.

It is estimated that 3.2 million Americans have hepatitis C, yet millions more may remain undiagnosed. The Insights Report states that as few as 4% of the population that has hepatitis C is actually being treated, which means the potential amount of newly-diagnosed patients entering the healthcare system will create an increased demand for treatments, which will drive this trend.

The introduction of two new specialty drugs in 2011 to treat the condition also influenced this trend, and the entry of new drugs into the market will likely increase this trend in the years to come, according to the report. Seven additional oral treatments for hepatitis C are expected to be approved in 2014.

While growth in drug trend related to MS treatments is not as high as hepatitis C, gross trend did increase significantly in this area in 2012.

In 2012 CVS Caremark’s commercial market trend for MS treatments was 17.8%, while in Medicare it was 22.6%%. In Medicaid it was 18.0%. In this case, as is the case with hepatitis C, the introduction of new oral treatments for MS has driven up cost and utilization in this therapeutic class, according to the report. Twenty years ago there were virtually no effective therapies for MS, but the evolution of treatments for the disease, and the development of new drugs over the years, have made management of the condition more accessible and easier for patients. The new therapies have driven utilization and spend in the disease class as a result.

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