Drug Trend Report: Key Findings and Takeaways

A man using drug pricing analysis on his computer.

The Xevant mid-year Drug Trend Report provides detailed insights into the key drivers of cost changes between the first half of 2019 and the first half of 2020. The independently derived report takes a novel approach to better understanding the impact of each of the following individually separated sources of increases and decreases in pharmacy claims cost:

  • PBM Discounts
  • Drug Inflation
  • Drug Mix
  • Utilizer Changes
  • Intensity

Xevant’s extensive data warehouse is one of the largest independently maintained pharmacy claims datasets obtained from a wide range of claims administrators including PBMs, TPAs, Payers, and consultants representing employer plan sponsors of all sizes. This allows both Xevant and its customers to quickly and accurately solve cost and utilization issues as they happen.

That’s why the Drug Trend Report is so revealing; the analysis comprised within this report was derived from a broad spectrum of nationwide, commercial, and self-insured, de-identified pharmacy claims data. Additionally, the report is presented using “per utilizer per month” (PUPM) figures (unless separately noted) instead of using totals in order to normalize and deidentify the data.

Key Takeaways

During the first half of 2020 PBM discounts improved by 0.76%

The improvement of PBM discounts resulted in plan sponsor PMPM savings of $0.71 PUPM (or approximately $0.65 PMPM).

Drug cost inflation during the first half of 2020 is 2.08%

With 3.6% projected by the end of 2020, drug cost inflation is on par. A typical misconception of increased drug costs, pharma manufacturers only represented less than 25% of the actual full increase in drug costs.

One of the top drivers for increased cost continues to be an increase in the utilization of higher-cost specialty medications

Switching to higher cost specialty medications still continues to drive just under half of the overall increase in drug costs. With a long list of new drugs hitting the market to treat conditions in ways never considered before, patients are now switching to dramatically higher-cost medications in hopes of better managing difficult conditions.

As more and more patients opt towards higher-cost specialty biologic medications, an often-overlooked positive result is an expected decrease in medical spending.

The Antiviral class led an overall drop in drug costs due to a decrease in utilizers

A primary driver of the decrease in utilizers can be attributed to the disruption caused by both the Truvada lawsuit and the formulary status of Descovy. This is a major concern because decreased utilization, especially for specialty medications like Descovy, can create a major threat to patients’ overall health.

COVID-19 contributed to increased drug costs during the first half of 2020

Over half of the drug cost increase came at the hands of increased quantities of medications received. As the pandemic swept the United States, much like the rush to stock up on toilet paper and paper towels, we saw the same reaction to medication. There was a significant spike in 90-day prescriptions in March, April, and into May.

Interpretation of the Findings

Predictions are important to help us plan for the future, but then COVID-19 happens and throws everything to the wind. That’s why it’s important to focus on what we know, the changes that are occurring, and to identify why they are happening.

Specialty medication, for example, will continue to grow at an alarming rate. And that’s because taking a holistic approach to managing disease is more important and beneficial in the long run rather than solely focusing on managing the cost of drugs.

By utilizing medications that help manage or cure long-term, chronic illnesses, it saves on the cost of lifetime medical 2-3 times the cost of the medication. So while medications, like those for Hep C, are costly, it’s much lower than what the cost of medical would be for the patient over their lifetime.

Addressing Problem Areas

The Xevant Drug Trend Report may feel overwhelming, especially if you’re managing a large number of members, but it’s important to know that each of these areas can be addressed with the goal to help you garner the most savings while supporting employee health.

With Xevant’s platform, you’ll be able to pinpoint the problem so that you’re focusing on the right area rather than continuously attempting to fix an issue that’s already been solved.

Xevant can successfully separate drivers of cost to eliminate the need to pilfer through 1000 different approaches. They can shine a light on a small number of proven ways to make changes- whether that’s providing insights to negotiate a better PBM discount or mitigating higher drug costs for members over a long period of time.

VIEW THE COMPLETE DRUG TREND REPORT

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Ashwin Patel

SVP, Data

Ashwin (Ash) has more than 20 years leadership experience in data warehousing and business intelligence practices within the healthcare sector. At Xevant, Ash leads the data and business intelligence teams and is responsible for future state expansion of Xevant data technology platforms and processes, partnering with the organization’s product teams to develop best-in-class products and solutions. Prior to Xevant, Ash was VP Business Intelligence for HealthSmart Benefit Solutions based in Irving, TX, a third-party administrator (TPA) of medical, pharmacy, and clinical data. Ash earned a Bachelor of Science degree in computer science and operations research from Leeds Becketts University in Leeds, England.

Sahily Paoline

Chief Pharmacy Officer

Sahily is a licensed pharmacist and expert business leader with more than 20 years of experience delivering high-quality clinical care, building and leading organizations, and staffing and motivating teams in the pharmaceutical and digital health industries. Sahily specializes in Clinical Program Management, Pharmacy Practice and Operations, and building and growing business. She is passionate about the use of data and technology in patient care and believes in a holistic approach to healthcare.

Megan Foster

Manager, People Operations

Todd Rode

VP, Revenue Operations

Todd served as an Artillery officer in the U.S. Army before a disability turned his focus to the business world. He’s carried a bag, led multiple sales operations and sales development efforts, and run a sales team in complex selling environments. The son of small business owners, Todd enjoys helping business leaders grow by using proven, repeatable processes. He holds a BS from the United States Military Academy at West Point and an MBA from the Kellogg School of Management at Northwestern University. Todd lives in Nashville with his wife. He spends as much time outside as possible and co-founded a brewery in 2019.  He’d love to tell you the full story over a pint sometime.

Marvin Roi Elvambuena

Software Development Manager

Marvin is responsible for all aspects of software development efforts at Xevant, including architecting and managing software solutions from the ground up. He brings with him a performance history of leading loosely defined enterprise software projects in rapid changing environments. He has previously worked in several industries such as HR solutions, insurance, shared services, and payroll and holds a BS in Information Technology with specialization in Web Development.

Greg Abram

VP Sales

Greg is a results-driven sales professional with more than 12 years of experience in the PBM and healthcare markets. As VP of Sales, Greg leads the Xevant sales team focused on growing revenue and expanding market reach. Prior to Xevant, Greg served in multiple leadership and growth positions with Myriad Genetics, Navitus Health Solutions, Catamaran, and CVS Caremark Corporation. Greg’s passion to create long-lasting, aligned partnerships has delivered tremendous value for PBMs, health plans, large purchasing groups, and fortune 500 organizations throughout the country.

Jaylyn Palmer

Chief of Staff

Jaylyn is a dynamic Chief of Staff who thrives on helping create workplaces that go beyond the ordinary to achieve a culture of belonging, empowerment, and improvement. Proving to be a culture ambassador, strategic advisor, and relationship builder, Jaylyn supports the organization with versatility and innovation. When she’s not wearing one of her many Xevant hats, you can find Jaylyn planning a party, attending live music and theater, or playing Dungeons and Dragons.

Jeff Weber

Chief People Officer

Jeff has extensive experience building and growing positive organizational culture that supports high performance, transparency, learning and growth. Jeff has implemented comprehensive talent strategy including talent acquisition, engagement, rewards, and recognition programs. Prior to Xevant, Jeff was the EVP People and Places at Instructure, a rapidly growing provider of the Canvas and Bridge learning management platforms focused on transforming online learning and employee development.Jeff also led the growth of the people function for Ancestry.com. Jeff holds an MBA with an emphasis in Organizational Behavior from Brigham Young University.

Scott Sorenson

Chief Technology Officer

Scott is an expert business leader with extensive experience scaling technology organizations. His experience includes technology leadership roles at Cedar Health Payment Solutions, Human Longevity, Inc., and 16 years at Ancestry where he was the Chief Technology Officer and played an integral role scaling the Ancestry family history business that hosts billions of historical records and serves millions of customers. He also led their technology organization as they transformed the business to include a world class consumer genomics product line. At Ancestry, Scott prepared the technology organization for an IPO and multiple PE transactions.

Daniel Telford

Director, Corporate Treasurer

Daniel is a financial professional with more than 15 years of financial and management experience. Having worked in multiple demanding roles including Business Banker, Licensed Investment Professional and Financial Center Manager, Daniel uses his experience to guide and inform his current role as Corporate Treasurer for Xevant. Daniel has led multiple complex cross-functional teams to sustained success in the financial services industry.

Griff McGee

Corporate Controller

Griffin is CPA and finance and accounting professional with more than 10 years’ experience in public accounting, internal audit, and consulting. Throughout his career Griffin has worked with clients to solve complex problems, improve and implement new processes and achieve public company readiness. Prior to joining Xevant, Griffin served in several audit and consulting roles with Protiviti, Change Healthcare, Genesco and Decosimo, CPAs.
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Gerrit Lemmen

VP, Rebates

Gerrit is an experienced leader in the PBM, Specialty and Formulary rebate markets. As VP of Rebates at Xevant, Gerrit is responsible for managing drug rebates through Xevant’s revolutionary pharmacy benefits platform. In his previous roles at Magellan Rx Management, Gerrit led highly respected commercial rebate operations teams and focused on increasing efficiency that enabled scalability and growth.

Mike Simmons

VP, Product Management

Mike is a true product champion & ambassador with 18+ years of experience in critical product launch, strategic branding, and delivering profitable campaigns that capture market share and create growth. His vision and skills for implementing integrated, high-impact, go-to-market strategies have proven to drive increased sales and an overall improvement of marketing programs. Mike’s ability to leverage business savvy in order to align management, data intelligence, and content management generate more informed business decisions resulting in enhanced revenue for progressive, enterprise organizations.

Laura Phillipson

VP, Client Experience

Laura Phillipson is a client management expert with experience managing client services teams. Her past roles include Sr. Client Services Executive for Navitus and over a decade of experience as a Certified Pharmacy Technician. Laura’s career in client relations spans nearly two decades. An avid sports fan, Laura excels in helping clients create a strong strategy with a competitive edge. Laura’s extensive background in both customer service and the medical field provides an ideal blend to lead client management for Xevant.

Chad Davis

Director, Compliance

Chad is a credentialed and strategic audit and compliance professional with more than 10 years’ experience assisting companies with achieving their business objectives through adept governance, compliance, and risk management. Prior to Xevant, Chad served in several auditing and accountant roles for Protiviti, Intermountain Healthcare, and First Data Corporation. He is a credentialed CISM and CISA and holds a BS in Accounting.

Erin Glenn

Director, Data Warehouse

Erin is 20-year data warehousing and business intelligence technology leader who has conceptualized, designed, and implemented ground-breaking data-centric technology solutions. She has solved big problems, delivered operational efficiencies, and increased productivity and cost savings throughout her career by delivering enterprise class data warehouses and business intelligence solutions.  Prior to Xevant, Erin served in multiple technology leadership positions with Hampton Roads Transit, MSN, The Port of Virginia, and Innova Systems. She holds a bachelor’s degree from the University of Hawaii.

Greg Heaps

Chief Marketing Officer

Greg is an expert marketer and innovative business builder specializing in launching and building high growth companies. As a founding member and on the leadership team of multiple venture backed tech startups, Greg has extensive experience in numerous markets including software services, health and medicine, commercial real estate, and consumer focused products. His primary motivation is driving demand and growth through an omni channel, go-to-market strategy. When Greg is not neck deep building an exhilarating business, he can often be found mountain biking, fly fishing, or carving deep powder on remote mountains.

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Jace Garfield

Chief Analytics Officer

Jason (Jace) Garfield, MSW has thrived in many industries ranging from data and information technology to foster care and mental health management. In his role with the Utah State Justice Commission, he helped publish medical research on drug effectiveness. Jason’s passion for technology and data automation paved the way towards innovations in identifying new to market drugs, tracking systems to identify clinical interventions, and data automations, resulting in millions in operational cost reductions. At Xevant, Jace leads every aspect of product operations and is responsible for a diverse team of technology experts.

Jason Hardin

Chief Revenue Officer

With 20+ years of sales and sales management experience in SaaS sales and professional services, Jason is a dynamic, performance driven leader with an exceptional record of achievement in motivating sales teams to exceed quotas, while ensuring client success.  Having led many organizations in the start-up, high growth, and emerging phases, Jason brings an entrepreneurial hunger to the sales, client success, and business development organizations with the ability to penetrate new markets, produce high growth sales results, achieve adoption and retention goals, and grow market share and revenue quickly.  

Jeff Lininger

President & COO

Jeff is the Chief Operating Officer at Xevant and is accountable for operational excellence at the company. Prior to joining Xevant, Jeff successfully applied his extensive, multidisciplinary expertise in building and scaling growth and service infrastructures within start-up, mid-market, and Fortune 500 technology and services companies. He has recruited and built new leadership and functional teams within operations, sales, marketing, product development, client success, finance, and HR. The success of these business transformations also contributed to a culture of increased accountability and empowerment, contributing to significant improvement in employee engagement and overall enhanced business performance. Jeff holds an MBA from Duke University’s Fuqua School of Business in North Carolina and a Bachelor’s Degree in Finance and Economics from Grove City College in Pennsylvania.

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Lindsay Jones

Chief Financial Officer

Lindsay Jones, CPA, is a financial executive with experience in start-up companies & mature enterprises. He has a proven track record of helping, leading, and enhancing executive management teams. He has worked with private equity groups and private investors to identify, analyze, and close acquisitions and divestitures of companies. He has founded two startup companies, owned his own business, and closed over $500 million in private and public equity and debt financing, in his twenty-year career. 

Brandon Newman

Chief Executive Officer

Brandon has a dynamic, 25-year leadership career spearheading several businesses with emphasis on growth, revenue, and sales performance. He has run many high-growth environments, including start-ups, turnarounds, and $1B+ dollar businesses. As a serial entrepreneur, he has a proven record of founding new businesses and advancing them through growth and acquisition, merger, or roll-up including ScripPoint, Veridian, and AviaraMD. He is the driving force for vision, new market strategy, revenue growth, technology development, and partner alliances.