CVS Caremark recently released its 2014 Insights report, which analyzes drug trend and highlights key issues in pharmacy care. The report examines the factors impacting prescription drug trend, based on an analysis of the company’s 2013 Book of Business (BOB).
7 Sure Things
1. Prescription trend is up
2. Generics have peaked
3. Specialty drives trend
4. Price is king
5. Money matters to members
6. Adherence is the answer
7. Past performance is no guarantee of future results
Overall, the report found that prescription drug trend, the measure of growth that evaluates drug price, drug utilization and brand/generic drug mix, was up in 2013. For the full year, trend for traditional medications grew only 0.8 percent, while overall drug trend (which includes traditional and specialty drugs) reached 3.8 percent per member, per month.
The report cites prescription drug price as the primary driver of the increase in trend, with significant price inflation seen in traditional brands, specialty drugs and generics. Trend also grew because of a considerable increase in traditional and specialty prescription utilization, as more members filled prescriptions than in previous years, perhaps due to the improving economy. As in the past, mix – the proportion of brand and generic drugs being dispensed – was a moderating factor because of CVS Caremark’s industry-leading generic dispensing rate of 81.4 percent.
Analysts at CVS Caremark project that prescription drug trend may return to double digits in 2014 and beyond, driven by rising utilization and price increases. To help payers prepare, the Insights report offers the following strategies:
Double Down on Generics – Payers should look for opportunities to maximize generic dispensing opportunities. These include evaluating utilization by therapeutic class, considering managed formulary options, and keeping an eye on new generics in the specialty space.
Look Across Benefits at Specialty – In many cases, specialty drugs covered by a plan’s medical benefit could be more effectively managed under the pharmacy benefit. CVS Caremark has the expertise and experience needed to manage these prescriptions.
Tackle Price – Cost-conscious consumers are more willing than ever to accept narrow networks in exchange for savings. Costs can also be contained through programs like Maintenance Choice®, which combines the option for picking up 90-day supplies of chronic medications at CVS/pharmacy locations or through convenient mail service delivery.
Be Strategic About Cost Share – Member cost share can affect where – and if – prescriptions are filled. Payers can align cost share strategies with overall plan goals and provide support to help members understand their prescription therapy.
Keep the Big Picture in Mind – Helping members stay healthy is a primary strategy for managing cost increases. For the small percentage of high-cost specialty patients, coordinated patient care can help reduce hospitalizations, readmissions and emergency visits.
To learn more about factors that affect prescription drug trend, download the full Insights report.