It’s the start of a new year. January has flown by. About 43 percent of people who made New Year’s resolutions have fallen off the wagon. And manufacturers have kicked off their annual drug price hike.
The bulk of these drug price inflations roll out in January, with more likely to follow in July. So far, manufacturers have increased the price of 775 drugs at a median rate of 4.5 percent.
Higher Prices for Highly Utilized Medications
Among the products affected by drug price inflation, we took a closer look at classes with the most common indications and those most frequently prescribed, specifically for diabetes, autoimmune, and migraine. We’ll be digging deeper into this important topic in an upcoming white paper. But for now, here’s a high-level summary of what we’re seeing.
Treatment for Diabetes and Obesity Impacting GLP-1 Drug Prices
Judging by the growing popularity of glucagon-like peptide-1 agonists (GLP-1s) for both diabetes and weight loss, the modest 3 percent to 5 percent drug price increase may be just the beginning.
Autoimmune conditions are already the number one driver of drug spend, a trend likely to continue in the face of year-over-year inflation. Among the most widely used therapies, we’re seeing steady 5 percent to 6 percent price increases.
AbbVie – maker of market leader, Humira – has yet to raise the price of its blockbuster biologic. As more PBMs add biosimilars to their formularies – and some remove Humira altogether – it will be interesting to see AbbVie’s strategy in the face of growing competition.
Therapies to Prevent and Treat Migraine
Migraine treatment is available in acute, preventive, and combination therapy options, all of which saw similar increases in January – between 4 percent and 5 percent.
The Effect on the Bottom Line
A 4.5 percent median increase may seem insignificant at face value, but when you consider utilization rates, the effect on drug spend adds up quickly.
Understanding and evaluating this information early is key to making more informed and timely plan decisions that can save clients and members money and improve health outcomes by alleviating the cost barrier to member care.
Stay Informed in Real Time
If you don’t have the right information at the right time, you can’t make the smartest decision. When you work with outdated information, as is often the case during year-end plan reviews, you may miss opportunities to advise your clients on ways to manage costs and keep members healthy.
Xevant’s FinanceLogic tool, with an efficient Inflation Dashboard and embedded near real-time alerts, actively monitors the market and immediately alerts you when manufacturers change the price of a drug. You can then quickly run an analysis to evaluate utilization rates and easily determine how drug cost inflation will impact future costs.
Armed with this information clients can, within days – instead of weeks or months – make changes that result in immediate and long-term cost savings and easier pharmacy trend management.
How can Xevant help you use real-time data to make more informed decisions? Ask us.
Note: Cost information provided is based on average whole price (AWP) for a 30-day supply and may not reflect what a patient ultimately pays for a drug. All pricing data is based on information provided by Medi-Span.