Download 2004 drug trend report

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june 2005
2004 drug trend report
featuring the pharmacy benefit guide
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Dear Reader,
This ninth publication of Express Scripts annual Drug Trend Report coincides
with a significant milestone for the company. Barrett Toan and Fred Teitelbaum,
the Report’s two founders, are both retiring.
How Can You Manage What You Cannot Measure ?
In the early 1990s, Barrett recognized that the pharmacy industry had a knowledge
gap. The underlying drivers of drug trend were not clear. To address Barrett’s
concerns, Fred’s research team developed a landmark methodology to help
decision-makers understand factors that influence prescription-drug spend.
Imitation Is the Sincerest Form of Flattery
Since we introduced our original Report at the first Outcomes Conference
in 1997, virtually every major PBM and pharmaceutical policy-making
organization has produced similar information. Our Drug Trend Report
is quoted in hundreds of news sources and cited in national publications.
The More Things Change …
As the pharmacy benefit has evolved, our Report has adapted to industy
changes. Committed to solid research, we added an extensive forecast section
because we know that understanding where costs are going is just as important
as identifying what factors affect them. We have incorporated the Pharmacy
Benefit Guide and expanded the Therapy Class Review section. This year,
we present a new approach for analyzing the drivers of specialty-drug trend.
True To Our Heritage
The Drug Trend Report will carry on Barrett’s and Fred’s ground-breaking
work not only in reporting drug trend, but in using that research to create
solutions. We will also continue to provide the latest research on the
effectiveness of trend-management tools, and their impact on members.
A special thanks to Barrett and Fred for their shared vision.
Sincerely,
Brenda Motheral, PhD, MBA, RPh
Vice President, Product Development
1
preface
Preface
contents
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Page 2
Contents
Page 4
Executive Summary
Page 11 Introduction
Key Events on the 2004 Pharmacy Landscape
Medicare Modernization Act (MMA)
Plan Actions
Trends in Expenditures for Prescription Drugs
Market Trends in Prescription-Drug Use
Methods
Page 25 Overall Drug Trend
Components of Drug Trend
Utilization of Common Drugs
Inflation
Therapeutic Mix
Brand/Generic Mix
Units per Prescription
New Drugs
Specialty Drugs
Page 43 Therapy Class Review
Antihyperlipidemics
Gastrointestinals
Antidepressants
Antihypertensives
Antidiabetics
Antiasthmatics
Anti-Rheumatics (NSAIDs)
Anticonvulsants
Narcotic Analgesics
Dermatologicals
Miscellaneous Endocrines
Antihistamines
Calcium Blockers
Beta Blockers
Antivirals
Antipsychotics
Stimulants/Anti-Obesity
Oral Contraceptives
Miscellaneous Hematologicals
Decongestants
Antineoplastics
Migraine Products
Ophthalmic Products
Quinolones
Macrolides
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contents
Page 97 Pharmacy Benefit Guide
Formulary Development: The Essential Element of Trend Management
Is There Only One Formulary?
Implications
GenericsWork : NEW LEARNINGS
Geographic Variation in Generic Fill Rate: NEW LEARNINGS
Principles for Plan Design
Enlist a Variety of Trend Interventions
Communicate, Communicate, Communicate
What Is a Formulary Notification?
Member Communications: NEW LEARNINGS
Cost Sharing
Emerging Plan Designs
Point-of-Service Programs
Generic Policy
Prior Authorization
Automated PA for Erectile Dysfunction: NEW LEARNINGS
Step Therapy
Step Therapy for Statins: NEW LEARNINGS
Step Therapy for Calcium Channel Blockers: NEW LEARNINGS
How Much Does Step Therapy Save?
What Is the Member Response?
Quantity Limits
Dose Consolidation: NEW LEARNINGS
Consumer-Driven Healthcare
Express Scripts Supports CDHC
Express Choice : NEW LEARNINGS
Plan Selection: Moving in the Right Direction
Express Scripts Supports Consumer-Driven Health Plans
Prescription Distribution
Home Delivery
Comparing Retail and Home Delivery
Exclusive Home Delivery
SM
SM
Page 141 Express Scripts Research Studies, Authors and Contributors
3
executive summary
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Executive Summary
Beginning with the first Drug Trend Report in 1996, Express Scripts
has analyzed yearly trends in prescription-drug use and cost. Based
on this research, we customize evidence-based programs that help our
clients offer safe, effective and affordable prescription-drug benefits
for their members. The 2004 Drug Trend Report presents our current
recommendations and the evidence that supports them.
Although the situation in Iraq dominated the news in 2004, healthcare
also made headlines. Issues ranged from the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) to medical
liability reform. With the public share of healthcare expenses projected to
reach $1.8 trillion — almost 50% of total health expenditures — by 2014,
federal concerns will center increasingly on cost containment.1 State and
local governments are also struggling to balance their budgets and still
provide adequate healthcare benefits. According to projections from
the Centers for Medicare & Medicaid Services (CMS), total national
healthcare expenses are expected to top $2 trillion in 2006.2
Employers are also being squeezed. A survey of more than 1,900
employers by the Henry J. Kaiser Family Foundation and the Health
Research and Educational Trust found that the cost of employer-sponsored
health coverage has risen more than 45% since 2000.3 Anticipating an
average healthcare cost increase of about 8% in 2005, employers may
see their annual cost per employee exceed $6,000.4
Of particular concern is the cost of prescription drugs, which continues
to increase faster than most other components of healthcare, as shown
in Exhibit 1. Although the growth of prescription spending slowed
1
Heffler S, Smith S, Keehan S, Borger C, Clemens MK, Truffer C. Trends: U.S. Health Spending Projections
For 2004-2014. Health Affairs (Millwood). Web exclusive. February 23, 2005. Available at:
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.74. Accessed February 23, 2005.
2
Centers for Medicare & Medicaid Services, Office of the Actuary: National Health Statistics Group. Table 2: National Health
Expenditure Amounts and Average Annual Percent Change by Type of Expenditure: Selected Calendar Years 1980-2013.
Last modified September 17, 2004. Available at: http://www.cms.hhs.gov/statistics/nhe/hprojections-2003/t2.asp.
Accessed February 8, 2005.
3
Employer health benefits 2004 survey. Kaiser Family Foundation and the Health Education Trust. September 9, 2004.
Available at: http://www.kff.org/insurance/7148/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=46288.
Accessed February 8, 2005.
4
2005 Towers Perrin Health Care Cost Survey. Towers Perrin. 2004.
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Exhibit 1
National Health Expenditures for Selected Healthcare Accounts
1990 and 1994 to 2003
1800
In Billions
1500
1200
900
600
300
0
1990
Other
1994
1995
1996
Hospital Care
1997
1998
1999
2000
Physician and Clinical Services
2001
2002
2003
Prescription Drugs
Source: Centers for Medicare & Medicaid Services, Office of the Actuary: National Health Statistics Group. Table 2: National
Health Expenditure Amounts and Average Annual Percent Change, by Type of Expenditure: Selected Calendar Years 1980-2013.
Last modified September 17, 2004. Available at: http://www.cms.hhs.gov/statistics/nhe/projections-2003/t2.asp.
Accessed February 16, 2004.
In 2004, multiple factors interacted to increase prescription-drug cost.
Direct-to-consumer (DTC) advertising, often identified as a driver in
increased drug spending, may indeed have played a significant role.
In addition, after the November 2004 elections, prices increased up to
11% for 31 of the 50 top-selling prescription drugs.7 Pharmaceutical
manufacturers cited anticipation of price controls from the new Medicare
prescription-drug legislation and the impact of new and expected
generics as reasons for the increases.
5
Smith C, Cowan C, Sensenig A, Catlin A, and the Health Accounts Team. Health spending growth slows in 2003.
Health Affairs. 2005;24(1):185-194.
6
Heffler S, Smith S, Keehan S, Borger C, Clemens MK, Truffer C. Trends: U.S. Health Spending Projections
For 2004-2014. Health Affairs (Millwood). Web exclusive. February 23, 2005. Available at:
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.74. Accessed February 23, 2005.
7
Won Tesoriero H, Hensley S. Prices increase on popular drugs. The Wall Street Journal. January 25, 2005.
5
executive summary
nationally from 2002 to 2003, prescription-drug expenses still represented
11% of total healthcare spending in the U.S. for 2003.5 The share of
prescription-drug cost paid by Medicare is expected to balloon from
about 2% of total drug spend in 2005 to more than 25% of the total
when the full-scale Medicare Part D gets under way in 2006.6
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Generic drugs, however, play a big part in keeping growth in spending
for prescription drugs relatively low. A 1% increase in generic use results
in nearly a 1% decrease in overall drug cost.8 As shown in Exhibit 2,
the generic fill rate among clients in the entire Express Scripts book
of business increased from 48% in fourth quarter 2003 to 52.7% by
the end of 2004. Recently, generics for several widely-used drugs were
introduced, and several other important generics are expected in the
next few years, so the use of generics is expected to remain high.
Exhibit 2
Express Scripts Generic Fill Rate
Fourth Quarter 2002 to Fourth Quarter 2009 (Estimated)
70
60
Percent
executive summary
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50
40
30
2000 Q4 2001 Q4
2002 Q4 2003 Q4
2004 Q4
2005 Q4 2006 Q4
(est)
(est)
2007 Q4
(est)
2008 Q4 2009 Q4
(est)
(est)
To control the rate of increase in prescription-drug costs, employers
continue to adopt a number of strategies. Nationally, for example,
65% of companies that used formularies in 2004 had a three-tiered
formulary — more than twice as many as in 2000.9 As shown in
Exhibit 3, Express Scripts clients surpassed national levels, with more
than 68% of their members covered by a three-tiered formulary.
8
Geographic variations in generic fill rate. Express Scripts. No date given. Available at: http://www.express-scripts.com/
ourcompany/news/outcomesresearch/onlinepublications/regionalgenericvariation/regionalgenericvariation.pdf.
Accessed February 28, 2005.
9
Employer health benefits 2004 survey. Kaiser Family Foundation and the Health Education Trust. September 9, 2004.
Available at: http://www.kff.org/insurance/7148/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=46288.
Accessed February 8, 2005.
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executive summary
Exhibit 3
Formulary Structure: Express Scripts Clients Fourth Quarter 2004
One-Tier Formulary
6.6%
24.7%
Two-Tier Formulary
68.7%
Three-Tier Formulary
Additional measures taken by employers to control drug costs include:
• Point-of-service (POS) programs, such as step therapy and
prior authorization (PA)
• Home delivery of prescriptions
• Specialty drug management
• Consumer-driven options, such as health savings accounts (HSAs)
Express Scripts consumer-driven healthcare (CDHC), POS and homedelivery programs are detailed in the Pharmacy Benefit Guide section
of this Report.
DRUG TREND
Clients that managed trend aggressively by implementing two or more
new programs in 2004 saw essentially no increase in drug spend for the
year. Those implementing at least one additional trend-management
program averaged a trend increase of 3.3%, compared with 9.3% among
clients that did not add programs (Exhibit 4).
Exhibit 4
Net Drug Trend From 2003 to 2004
10
9.3
Percent
8
6
4
3.3
2
0
0
All Managed
Clients
Implemented One
Or More Programs
Implemented Two
Or More Programs
7
executive summary
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THERAPY CLASS HIGHLIGHTS
Highly-publicized negative outcomes associated with the use of COX-2s,
antidepressants and estrogens resulted in lower utilization in each of
their respective therapy classes. In fact, declining use caused estrogens
to fall out of the top 25 therapy classes for the first time since the
Drug Trend Report began publication.
Antihyperlipidemics remained in the top spot, increasing by 21%
per member per year (PMPY), accounting for 20.8% of overall cost
growth and making up 11% of total overall drug spend for the year.
Rounding out 2004’s top five classes ranked by cost are gastrointestinals,
antidepressants, antihypertensives and antidiabetics.
With trend increasing by only 4.5%, gastrointestinals continued to
be affected by the September 2003 introduction of Prilosec OTC TM.
After rising 22.2% in 2003, trend for anti-rheumatics (NSAIDs) also
increased by only 4.5%, mostly due to decreased use of COX-2s. The
lowest trend increase among the top 10 was for antidepressants, which
rose by only 3.8%. Slowed growth was due to the introduction of the
generic for Celexa® as well as to the possible influence of negative press
about SSRI-antidepressant use by children and teens.
Increased utilization of common drugs was only 2.9% in 2004, compared
with 6.8% the previous year. Inflation contributed 6% to overall trend
growth, the smallest increase due to inflation in three years. Therapeuticmix trend rebounded slightly to 3.7%, while brand-generic mix continued
to decline. The fall of 2.6% for brand-generic mix in 2004 was nearly
identical to the drop seen in 2003.
FORECAST
Between 2005 and 2009, unmanaged trend is expected to reach a low
of 11.2% in 2008 after a high of 12% in 2006.
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executive summary
BENEFIT DESIGN
To moderate or even negate the expected increases in unmanaged trend,
plan sponsors can implement programs that optimize the use of the
growing number of generic medications in key therapy classes. Proven
programs for promoting the use of the most cost-effective brand and
generic medications include:
• Tiered Copayments
• Step Therapy
• Express Choice
SM
Three-tiered copayments are an industry standard because they align
the interests of plan sponsors and members, provide financial incentives
for members to use the most cost-effective alternatives, and still allow
members a choice of medication. Express Scripts has done extensive
research on three-tier copayments, finding that they can provide significant
savings without negative effects on clinical outcomes, such as medication
compliance or other medical costs. Nearly two-thirds of Express Scripts
clients currently have a three-tier copayment design.
Step-therapy programs extend a generic policy to promote therapeutic
substitution. With step therapy, the use of a first-line medication, typically
a generic, is required before coverage is provided for a second-line drug,
typically a more expensive brand medication. The number of therapy
classes for which step therapy is appropriate has grown significantly
in the past two years. Currently, multiple therapy classes — including
all of the top five — have step-therapy programs available through
Express Scripts. Additional step-therapy programs are in development
for several other therapy classes.
Finally, Express Choice, the consumer-oriented plan design offered by
Express Scripts, allows plan sponsors to offer multiple prescription-drug
plans. Each member selects the plan that best meets his or her needs.
By encouraging efficient use of the prescription-drug benefit through
Express Choice, plan sponsors consistently have seen significant reductions
in trend while still maintaining high member satisfaction.
9
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Notes
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INTRODUCTION
1
introduction
Express Scripts Drug Trend Report 2004
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KEY EVENTS ON THE 2004 PHARMACY LANDSCAPE
Even though prescription-drug spending was up again in 2004, the year’s
lone major gain for pharmaceuticals was more than offset by losses.
• In one of the year’s few bright spots for the pharmaceutical industry,
the overall utilization of cholesterol-lowering drugs known as statins
increased by 12% in 200410 — boosted in large part by updated
clinical guidelines that recommend reduced goal levels of low-density
lipoproteins (LDL) for high-risk patients.
In general, however, 2004 was a year of significant problems, not only
for the pharmaceutical industry but also for the U.S. Food and Drug
Administration (FDA).
• Voluntary removal of Vioxx® from the world market in September
2004 and its later reintroduction in some countries focused attention
on the prescription-drug approval process in the U.S. Along with
other drugs in the COX-2 subclass, Vioxx was advertised heavily
in direct-to-consumer (DTC) ads following its U.S. introduction in
1999. Particular emphasis was placed on the stomach-protective effect
of COX-2s. However, subsequent research found that individuals
who take Vioxx for 18 months or longer are at increased risk for
heart attacks and strokes. In December 2004, concerns spread to
include all COX-2s after additional information linked Celebrex®
and Bextra® to health problems similar to those seen with Vioxx.
As a result, U.S. prescriptions for COX-2s dropped from about
4.5 million to about 2.7 million in the last three months of
2004.11 While an FDA decision in February 2005 allowed some
COX-2s to stay on the market, the manufacturer of Bextra suspended
its sales in early April after a request for its withdrawal from the
FDA. A black-box warning is now required on the labels of all
COX-2s still sold in this country. DTC advertising for them has
been eliminated, and COX-2 utilization is expected to stay relatively
low since physicians are being advised to prescribe them in lower
doses and for shorter lengths of time.
10
IMS Health. 2004 Year-End U.S. Prescription and Sales Information and Commentary. No date given. Available at:
http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_18731_69890098,00.html. Accessed February 25, 2005.
11
IMS Health. 2004 Year-End U.S. Prescription and Sales Information and Commentary. No date given. Available at:
http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_18731_69890098,00.html. Accessed February 25, 2005.
11
introduction
Introduction
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• An FDA advisory in October 2004 addressed issues raised earlier
about the use of antidepressants for children and teens. Research
that linked suicide attempts and suicidal thoughts among pediatric
and adolescent patients to treatment with antidepressant drugs
led to both a warning label on all antidepressants and a decrease
in antidepressant use among patients aged 18 years and younger.12
• Newer, second-generation (atypical) antipsychotic drugs have been
associated with higher risks of developing diabetes, high cholesterol
and obesity. Early in 2004, four major medical societies, including
the American Diabetes Association and the American Psychiatric
Association, recommended more frequent and extensive health testing
for patients taking a second-generation antipsychotic medication.
As a result, expenses on the medical side are expected to increase
for these patients.
Recent negative press about prescription drugs is likely to cause changes
in the drug-approval process. In February 2005, the FDA announced
plans to establish a Drug Safety Oversight Board. The board, consisting
of FDA employees and medical personnel from other federal agencies,
will consult with independent experts and patients. In addition to posting
safety information on a new Drug Watch Web site, the board will also
work to improve the printed drug information patients receive with their
prescriptions. Additionally, the FDA has stated plans to make its review
and decision-making processes more independent and transparent.13
Problems with drug safety may also lead to more stringent requirements
for clinical trials, slower approval times and less chance of approval
for me-too drugs.
Another result of the pharmaceutical industry’s recent challenges is a new
drive to establish a clinical trials registry. Despite some manufacturer
complaints that making their trials public will give competitors unfair
advantages, several have set up their own trial-information Web sites.
12
Center for Drug Evaluation and Research. U.S. Food and Drug Administration. FDA Public Health Advisory. Suicidality
in children and adolescents being treated with antidepressant medications. October 15, 2004. Available at:
http://www.fda.gov/cder/drug/antidepressants/SSRIPHA200410.htm. Accessed March 11, 2005.
13
U.S. Food and Drug Administration. FDA Fact Sheet. FDA improvements in drug safety monitoring. February 15, 2005.
Available at: http://www.fda.gov/oc/factsheets/drugsafety.html. Accessed February 15, 2005.
12 express scripts drug trend report 2004
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Dilemmas for the FDA and the pharmaceutical industry were not the
only prescription-related issues that made news in 2004. Other dramatic
developments may affect prescription-drug benefits for years to come.
On the supply side, drug reimportation from Canada and other countries is
an ongoing issue. One increasing concern with reimports is the potential
for counterfeited drugs, a long-standing problem in many parts of the
world. Estimated to affect about 10% of the world’s prescription-drug
supply, drug counterfeiting recently has become more visible in the
U.S. The number of counterfeit drug cases investigated by the FDA
increased from five in 2000 to 21 in 2003.14 In another area of rising
concern, supplies of certain vaccines and some other drugs have been
inadequate to meet current needs.15 On the policy side, federal budget
cuts threaten to eliminate significant amounts of drug coverage under
Medicaid — at the same time that Medicare reform will provide
prescription-drug benefits for millions of seniors.
14
Cockburn R, Newton PN, Agyarko E, Akunyili D, White NJ (2005). The Global Threat of Counterfeit Drugs:
Why Industry and Governments Must Communicate the Dangers. PLoS Medicine 2(4): e100.
Available at: http://www.plosmedicine.org/perlserv/?request=get-document&doi=10.1371/journal.pmed.0020100.
Accessed March 14, 2005.
15
Marcus AD. Critical cancer drug faces shortage. The Wall Street Journal. March 15, 2005. Page D1.
13
introduction
However, the medical establishment favors an independent repository
(such as www.clinicaltrials.gov), which is designed to discourage selective
reporting from drug trials and other medical studies. Although trial
registration in an independent database is voluntary at this time, the
International Committee of Medical Journal Editors has put pressure on
pharmaceutical companies to comply. The group, which includes editors
of major medical journals such as the Annals of Internal Medicine, the
Journal of the American Medical Association, Lancet and the New England
Journal of Medicine, instituted a new policy in 2004. These editors have
stated that effective July 1, 2005, they will not accept for consideration
study results that have not been registered in an independent database
before patient enrollment begins. According to the group’s criteria, the
registry must be comprehensive, free, public, maintained by a nonprofit
entity and open to all clinical investigators. In addition, it must have
a mechanism for validating information, and readers must be able
to search the contents electronically.
introduction
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MEDICARE MODERNIZATION ACT (MMA)
The Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (MMA) is the most significant recent development affecting
prescription-drug coverage in the U.S. MMA expands services for
Medicare beneficiaries. Among its major provisions is Part D, which
offers Medicare enrollees an optional outpatient prescription-drug benefit
that is being implemented in two phases. Beginning in May 2004, enrollees
were offered the choice of several prescription discount-card options.
These discount programs remain active until either May 15, 2006, or the
date that the beneficiary enrolls in a Part D plan, whichever is earlier. The
interim cards provide up to an estimated 25% discount on prescriptiondrug purchases.16 The full-scale drug-benefit program will go into effect
on Jan. 1, 2006. Under Medicare Part D, services will be provided
by private plans that will assume some financial risk for the programs.
Exhibit 5
Summary of Medicare Benefits
PART
ALSO KNOWN AS
ENROLLMENT
BENEFICIARIES
COVERAGE
A
Hospital coverage
Automatic
Qualified disabled individuals and
Social Security or Railroad Retirement
recipients who are 65 or older
Inpatient hospital,
nursing home, hospice
B
Supplementary
medical coverage
Optional
Individuals entitled to Part A
Doctor’s office visits,
laboratory testing,
outpatient hospital
C
Medicare Advantage
Optional
(formerly Medicare+Choice)
Individuals entitled to Part A
and enrolled in Part B who choose
managed care rather than fee-forservice Medicare
HMO- or PPO-type
health-plan coverage
D
Prescription-drug
coverage
Individuals entitled to Part A
and enrolled in Part B
Prescription-drug
coverage
Optional
As shown in Exhibit 6, prescription-drug coverage under Medicare
Part D is complex. It includes a monthly premium, a deductible,
a copayment for partial coverage up to a specified dollar amount,
an out-of-pocket period (the so-called “donut hole”), and then
95% coverage for expenses over a specified amount.
16
Centers for Medicare & Medicaid Services. Overview. Medicare prescription drug discount card and transitional assistance
program. Last modified September 16, 2004. Available at: http://www.cms.hhs.gov/discountdrugs/overview.asp.
Accessed February 15, 2005.
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Medicare Part D Prescription-Drug Coverage 2006
Defined Standard Benefit*
Deductible
“Donut Hole”
TOTAL DRUG COST
MEDICARE PAYS
ENROLLEE PAYS**
OUT-OF-POCKET COST TO ENROLLEE
Up to $250
0
100%
Up to $250
$251 to $2,250
75%
25%
Up to $750
$2,251 to $5,100
0
100%
Up to $3,600
$5,101 and up
95%
5%
$3,600 and 5% of costs
above $5,100
* The defined standard benefit is the basic plan as outlined in the MMA. Plan sponsors may offer alternative benefits that provide equal
or greater value to plan participants.
** Adapted from: Centers for Medicare & Medicaid Services. Alternative part D benefit designs and options for enhancing medicare drug coverage.
Issue paper #31. January 19, 2005. Available at: http://www.cms.hhs.gov/medicarereform/issuepapers/title1and2/issue_paper_31_alternative_
part_d_benefit_designs_and_options_for_enhancing_medicare_drug_coverage_.pdf. Accessed April 27, 2005.
Individuals eligible for Medicare Part A are also eligible for Part D.
Enrollee contributions will be adjusted on an annual basis. Initial costs
for each enrollee are shown in Exhibit 7, along with estimates of costs
for 2015.
Exhibit 7
Medicare Part D Enrollee Contributions
Drug Premium
Deductible
Maximum Out-of-Pocket Cost
2006
2015
$35/month (est)
$250/year
$3,600
$68/month (est)
$472/year (est)
$6,800 (est)
Sources: Connolly C, Allen M. Medicare drug benefit may cost $1.2 trillion. Washington Post. February 9, 2005; Page A01; and A detailed description
of CBO’s cost estimate for the Medicare prescription drug benefit. The Congressional Budget Office. July 2004. Available at: http://www.cbo.gov/ftpdocs/56xx/doc5668/Report.pdf. Accessed February 9, 2005.
Plans that provide Medicare prescription-drug coverage will serve specified
geographical regions. Enrollees who opt for drug coverage will have the
choice of joining an integrated medical and prescription-drug plan
(Medicare Advantage, also known as an MA-PD); or joining a prescriptiondrug only plan (PDP). Enrollees in each Medicare-defined region will
be able to choose from at least two plans, one of which must be a PDP.
The Congressional Budget Office estimates that around three-quarters of
Medicare Part B enrollees will also participate in Part D, with about onefifth staying in employer-sponsored plans and the remaining individuals
choosing either alternate forms of prescription insurance or no coverage.17
17
A detailed description of CBO’s cost estimate for the Medicare prescription drug benefit. The Congressional Budget Office.
July 2004. Available at: http://www.cbo.gov/ftpdocs/56xx/doc5668/Report.pdf. Accessed February 9, 2005.
15
introduction
Exhibit 6
introduction
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Retirees cannot receive both Medicare Part D and prescription-drug
coverage that is completely employer-sponsored. To reduce the possibility
that employers might simply drop coverage for retirees when Part D
becomes fully operational, MMA also provides incentives to companies
that continue providing drug coverage.18,19 Options that employers
may choose include:
• Maintaining the current plan and receiving a tax-free government
subsidy to reimburse 28% of permitted drug costs for each
Medicare-eligible retiree who does not enroll in Part D. The plan
offered by the employer must be at least equivalent to Part D,
and the subsidy will be capped at a maximum amount.
• Adapting the existing drug benefit to coordinate with (or wrap-around)
Part D — probably by covering some Part D copayments and
deductibles for retirees who choose to enroll in Part D.
• Paying the monthly premiums for eligible retirees who choose Part D.
• Contracting for prescription-drug coverage from a third-party PDP
or MA-PD, or becoming a PDP or MA-PD.
As part of MMA, plans that provide Part D prescription-drug benefits
will be required to support e-prescribing. Sending electronic prescriptions
directly from the prescribing physician to the dispensing pharmacy adds
extra dimensions of safety. Difficult-to-read handwriting is eliminated, and
chances for alteration or loss of the prescription are minimized. Common
access to the patient’s prescription history also allows automatic checks
for allergies, drug interactions and duplicate therapy at the point
of prescribing, as well as at the dispensing pharmacy.
Private efforts are under way to accelerate the adoption of both e-prescribing
and the use of electronic medical records — a priority issue for the current
administration. Two organizations already exist to facilitate e-prescribing:
RxHub®, a joint effort of the three largest pharmacy benefit managers
(PBMs), which handles the electronic transfer of information among
18
Deloitte. Employer response to Medicare part D prescription drugs — 2005 survey. BenefitsLink. January 10, 2005.
Available at: http://www.benefitslink.com/articles/deloitte_part_d_survey.pdf. Accessed February 8, 2005.
19
Bakich K. Medicare prescription drug law requires new disclosures for retiree health plans. Employee Benefit News.
December 2004.
16 express scripts drug trend report 2004
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On the public-policy side, the U.S. Departments of Defense, Veterans
Affairs, and Health and Human Services announced a collaboration
in March 2005. Together, they will create a common set of standards
for information-sharing among the health programs — including
Medicare — that they oversee. Eight high-technology companies are
working with the government to implement guidelines that will assure
compatibility among computer systems and software. The new policies
are set to take effect concurrently with the full-scale implementation
of Medicare Part D prescription-drug coverage on Jan. 1, 2006.
PLAN ACTIONS
Even though the pharmaceutical landscape changed dramatically
in 2004, many plan sponsors were able to manage prescription-drug
trend. Plan sponsors most successful in controlling trend use a number
of different programs that control costs while still preserving adequate
coverage. Three-tier formulary programs remain popular, and nearly
70% of Express Scripts clients were using a three-tier formulary by
the end of 2004. In a three-tier formulary, generic drugs are covered
at the lowest copayment, formulary brands at a higher amount and
nonformulary brands at the highest copayment. Among Express Scripts
clients, more than 18% are now using Generics Preferred, our mandatorygeneric plan design. An additional 49% use a restricted generic policy —
Generics Preferred-Physician’s Choice — which does not require the
member to pay a higher amount if the doctor orders a brand drug.
20
Porretto J. Wagoner: Medical costs huge competitive disadvantage. Miami Herald. February 10, 2005.
17
introduction
physician offices, pharmacies and PBMs; and SureScripts, a similar
company founded by the National Association of Chain Drug Stores
(NACDS) and the National Community Pharmacists Association (NCPA).
Additionally, America’s big three car manufacturers — Chrysler, Ford
and General Motors — announced in February 2005 their alliance with
the three biggest healthcare insurers in Michigan. The car makers and
the health plans hope to recruit as many as 17,000 physicians willing
to initiate e-prescribing systems funded by the companies, as allowed
in the MMA.20
introduction
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Page 18
While formularies are the cornerstone of pharmacy-benefit design,
the strategies that best control trend incorporate a variety of programs —
all aimed at improving generic penetration. Generic-drug costs average
approximately $45 less than brand costs, and member copayments for
generics average $10 less than brand copayments.21 Trend programs should
not be implemented abruptly, however. A phase-in approach, which adds
programs over a multi-year time frame and uses frequent communications,
minimizes member disruption. In addition, Express Scripts recommends
that plan sponsors develop a trend strategy that gives members confidence
in the continuing ability to afford maintenance drugs. Plan sponsors are
advised to set overall member financial contributions between 20%
and 35% of drug-ingredient cost.
Generic utilization can be driven by the use of home delivery for
maintenance drugs. Across the Express Scripts book of business, each
maintenance prescription filled through home delivery costs up to
10% less than the equivalent prescription filled at a local participating
(retail) pharmacy. Exclusive Home Delivery, our mandatory-mail program,
focuses on drugs that are appropriate for home delivery and results in total
average savings of approximately $35 per member per year (PMPY).
Many Express Scripts clients that initiated step-therapy programs
during 2003 added more modules throughout 2004, and more clients
adopted at least one step-therapy module. By the end of the year, more
than 13 million members were enrolled in step-therapy plans, using an
average of seven step-therapy modules. Each module focuses on appropriate
utilization in one therapy class (such as antihypertensives) or subclass
(such as non-sedating antihistamines). By implementing all the step-therapy
modules that Express Scripts offers, some clients have saved 10% or more
of overall drug spend through greater generic penetration.
For specific types of drug-delivery systems (such as eye drops or inhalers)
that contain measured amounts of drugs or specific numbers of doses,
quantity limits ensure that the amount of medication supplied is consistent
with both clinical dosing guidelines and the plan sponsor’s benefit design.
21
Geographic variations in generic fill rate. Express Scripts. No date given. Available at: http://www.express-scripts.com/
ourcompany/news/outcomesresearch/onlinepublications/regionalgenericvariation/regionalgenericvariation.pdf.
Accessed February 28, 2005.
18 express scripts drug trend report 2004
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Page 19
Client interest in newer and developing plan designs is also increasing.
For example, as today’s consumers are becoming more prepared to
participate in healthcare decisions, plan sponsors are recognizing that
its members can take more responsibility for those decisions. As a result,
consumer-driven healthcare is receiving renewed attention. Express
ChoiceSM (Express Scripts’ consumer-oriented plan design) allows plan
sponsors to offer multiple prescription-drug plans with varying degrees
of management. Each member selects the most appropriate plan for his
or her given situation. Those who choose more tightly-managed plan
designs pay the lowest premiums and copayments, while those who
select a richer benefit have higher associated costs. For the more than
2 million members enrolled in Express Choice, the result has been
a significant reduction in drug spend while maintaining strong
member satisfaction.
22
Delate T, Fairman KA, Carey SM, Motheral BR. Randomized controlled trial of a dose consolidation program.
Journal of Managed Care Pharmacy. 2004;10(5):396-403.
19
introduction
As detailed in the Pharmacy Benefit Guide section, quantity limits also
help prevent billing errors. As part of the Drug Quantity Management
program, Express Scripts also offers concurrent dose consolidation,
which recommends a single unit of one drug strength in place of two
units that are half that strength when the price for different strengths
is similar. The recommendation is relayed to the dispensing pharmacy
on the first fill of a new prescription. Some research has touted large
savings from retrospective dose consolidation (using prescription claims
to identify dose-consolidation opportunities after the prescription has
been filled). Express Scripts researchers, however, found savings of only
$0.02 to $0.03 per member per month (PMPM) for a retrospective
dose-consolidation program after savings were calculated using realistic,
partial-compliance rates and before administrative costs were considered.22
This research article received the Journal of Managed Care Pharmacy’s
Paper of the Year Award for 2004.
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Page 20
TRENDS IN EXPENDITURES FOR PRESCRIPTION DRUGS
Express Scripts clients that used any trend-management program saw
a trend increase of 9.3% in 2004. However, those implementing one
or more programs for the first time in 2004 saw an average increase
of only 3.3%, and those implementing two or more programs had
no increase in drug spend (Exhibit 8).
Exhibit 8
Net Drug Trend From 2003 to 2004
10
9.3
8
Percent
introduction
32916_11-24
6
3.3
4
2
0
0
All Managed
Clients
Implemented One
Or More Programs
Implemented Two
Or More Programs
MARKET TRENDS IN PRESCRIPTION-DRUG USE
In 2004, prescription-drug costs were affected by many of the same
issues that influenced costs in 2003. Movement of key drugs to overthe-counter (OTC) status continued to affect the cost of antihistamines,
cough and cold products, and gastrointestinals. This trend is not expected
to abate as new strengths of products already available OTC continue
to flood the market. Completely new products, never before available
without prescriptions, are also expected to enter the OTC market
within the next few years.
The second continuing trend was the increasing availability of generic
alternatives to blockbuster brand drugs. By the end of the fourth quarter
of 2004, trend-management programs implemented by Express Scripts
clients also helped drive the generic fill rate to 52.7% for the Express Scripts
book of business.
The third and potentially most significant issue affecting 2004 drug
trend was the body of evidence showing that the long-term side effects
of several classes or subclasses of drugs exceeded their treatment benefits.
In 2004, information regarding the safety of COX-2 inhibitors led
to the withdrawal of Vioxx from the market. Subsequently, utilization
20 express scripts drug trend report 2004
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Exhibit 9
Change in COX-2 and NSAID Prescriptions PMPM
January 2003 to December 2004
Prescriptions PMPM
0.024
0.020
0.016
0.012
Vioxx Withdrawn From the Market
4
4
v0
No
p0
Se
Ju
l0
4
4
y0
4
Ma
r0
4
n0
NSAIDs
Ma
3
Ja
3
v0
No
Ju
Se
l0
p0
3
3
y0
Ma
r0
Ma
Ja
n0
3
3
0.008
COX-2s
Antidepressants also took a hit late in 2004 when the FDA issued
a black-box warning on selective serotonin reuptake inhibitors (SSRIs)
and selective norepinephrine reuptake inhibitors (SNRIs). The warning
followed the results of repeated studies indicating that these antidepressant
subclasses increase suicidal tendencies in children and teenagers. Exhibit 10
shows the prevalence of antidepressant use in children and adolescents
for 2003 and the first half of 2004. The data, which reveal decreases in
either prevalence or prevalence growth, signify the beginning of a trend
that continued though the rest of 2004, contributing to the change
in overall antidepressant use.
Exhibit 10
Change in Antidepressant Use Among Patients Under 20 Years of Age 2003 to 2004
ABSOLUTE CHANGE
QUARTER TO QUARTER
IN PREVALENCE PER
100 CHILD BENEFICIARIES
PREVALENCE PER 100 CHILDREN
Age
Group
Q1
2003
Q2
2003
Q3
2003
Q4
2003
Q1
2004
Q2
2004
Q1 03Q1 04
Q2 03Q2 04
0-4 yrs
5-9 yrs
10-14 yrs
15-19 yrs
0-19 yrs
0.049%
0.555%
1.651%
3.244%
1.473%
0.050%
0.549%
1.687%
3.309%
1.499%
0.043%
0.527%
1.602%
3.176%
1.433%
0.040%
0.560%
1.738%
3.431%
1.547%
0.036%
0.579%
1.818%
3.577%
1.612%
0.036%
0.536%
1.741%
3.430%
1.541%
-0.013
0.024
0.167
0.334
0.139
-0.014
-0.013
0.054
0.121
0.041
Source: Express Scripts Research — October 2004
21
introduction
of other COX-2s declined. Exhibit 9 shows the monthly cost of COX-2s
and NSAIDs among Express Scripts clients in 2004. When examined
on a quarterly basis, costs for the entire class were down 10.5% in the
fourth quarter compared with the first-quarter baseline.
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Page 22
Also in 2004, fallout from concerns about the safety of estrogens
continued, and estrogen use declined by almost 20%. As a result, the
estrogens class dropped out of the top 25 therapy classes. At the same
time, the miscellaneous endocrines class, which includes several drugs
used to treat the same conditions as estrogens, grew only 8.8% — a far
cry from the explosive growth of more than 20% seen in each of the
previous three years. Part of the high miscellaneous endocrines trend in
previous years was due to the inclusion of drugs now considered in the
specialty drug class. However, the relatively low use of these products
compared with other drugs in the class indicated that the majority of the
trend was due to higher use of non-specialty products. Both classes are
returning to more natural utilization rates after estrogens fell dramatically
out of favor and patients flocked to miscellaneous endocrines for
treating osteoporosis.
The fact that 2004 was a “healthier” year than 2003 received much
less publicity than OTC releases and safety concerns, but it probably
had a bigger impact on overall utilization. Exhibit 11 shows the monthly
PMPY utilization for five classes of drugs that are usually taken to treat
acute conditions. Included are antivirals, quinolones and macrolides —
three classes in the top 25 for both 2003 and 2004. Antiviral drug patterns
are particularly compelling. Consisting of drugs used to treat conditions
as diverse as the flu and HIV, the antivirals saw a large increase for flu
treatment in 2003. Flu drugs are typically taken for short durations.
In 2004, short-term antiviral drug use was much lower, contributing
to the negative 15.3% prevalence change. Quinolones and macrolides,
classes used to treat bacterial infections, saw declines of 3.6% and 12.2%,
respectively. Decreases in the use of quinolones and macrolides were not
offset by corresponding increases in common first-line antibiotics, such
as cephalosporins or penicillins. In fact, utilization of cephalosporins and
penicillins declined at rates similar to those for other acute drug classes,
with respective drops of 7.2% and 11.3%.
22 express scripts drug trend report 2004
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introduction
Exhibit 11
Changes in the Use of Acute Drug Classes 2003 to 2004
15
Antivirals
Macrolides
10
Quinolones
Penicillins
Cephalosporins
Percent
5
0
-5
-10
-15
2003
2004
While the trend-management programs detailed in the Pharmacy
Benefit Guide section of this Report have shown their ability to control
or decrease drug trend, unmanaged trend is expected to continue in
double digits. Our projections for the increases in unmanaged PMPY
ingredient costs are shown in Exhibit 12.
Exhibit 12
Increases in Unmanaged PMPY Cost 2002 to 2004 (Actual), 2005 to 2009 (Projected)
20
18.5
15.5
Percent
16
12
10.6
11.8
12.0
11.6
11.2
11.3
2005
2006
2007
2008
2009
Rxs
Cost
8
4
0
2002
2003
2004
METHODS
The analyses included in the 2004 Drug Trend Report are based on
prescription-drug use for a sample of approximately 3 million unique
individuals, all members of commercial plans that maintained individual
member-eligibility data in both 2003 and 2004. These clients used
Express Scripts for both participating-pharmacy and home-delivery
services. They also offered a funded benefit, meaning that the client
23
introduction
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Page 24
paid at least some portion of the cost for prescriptions dispensed to its
members. Medicaid recipients and Medicare beneficiaries receiving drug
coverage through prescription-discount cards are excluded from this study
because of their unique demographics and drug-coverage policies. About
70% of the resulting 2004 sample consists of nonmanaged-care commercial
members, and about 30% are members of commercial managed-care plans.
Cost data included in the Trend and Therapy Class Review sections are
expressed on a discounted Average Wholesale Price (AWP) ingredient-cost
basis only. AWP is the retail list price of the medication as reported by
First DataBank. Dispensing fees, administrative fees, member contribution
and rebates are not included in the cost calculations. Brand and generic
discounts are representative of average rates charged across the Express Scripts
book of business. It should be noted that while all generics are discounted
at the same rate in this Report, actual generic discount rates can vary
significantly for specific products. Also, in order to eliminate the impact
of any changes in discounts from year to year, the same discount percentages
were used in both years.
As in previous Reports, prescription counts have been converted to equivalent
quantities that would have been dispensed through participating pharmacies
to adjust for differential home-delivery use rates and varying benefit
structures. Drugs sold OTC and prescriptions dispensed in inpatient settings
are not included in this analysis. In a departure from previous years, drugs
that Express Scripts places in the specialty class have been excluded from
the final calculations.
Drugs were categorized into therapy classes — groups of pharmaceutical
agents that are chemically or therapeutically related. Therapy classes
were defined by the first two digits of the 14-digit Generic Product
Identifier (GPI) code maintained by the Facts and Comparisons
division of Wolters Kluwer Health.
24 express scripts drug trend report 2004
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Page 7
OVERALL DRUG TREND
2
overall drug trend
Express Scripts Drug Trend Report 2004
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Page 25
trend
Overall Drug Trend
From 2003 to 2004, per member per year (PMPY) ingredient costs
for members in Express Scripts groups with funded, integrated benefits
rose 10.6% — 3.9 percentage points lower than the trend from 2002
to 2003. Of the increase, 27% was due to an increase in the utilization
of drugs, 70% to increases in the cost per prescription and 3% to the
introduction of new drugs in 2004.
The lessening of trend was due primarily to the slower rate of utilization
growth — only 2.9% in 2004, compared with 6.8% in 2003. Factors
contributing to lower utilization included the movement of drugs to
over-the-counter (OTC) status, safety concerns surrounding some
heavily-prescribed drugs, and a much milder cold and flu season in the
fourth quarter of 2004. Prevalence — which tracks the proportion of
members who fill one or more prescriptions from one year to the next —
actually declined 0.9% in 2004, down from an increase of 3% in 2003.
Conversely, intensity — which tracks the number of prescriptions filled
by users from one year to the next — increased slightly from 3.7%
in 2003 to 4% in 2004. The changes in both prevalence and intensity
further reflect an overall decrease in short-term utilization.
In a departure from previous years, four of the top 10 classes by total
cost experienced less than double-digit increases in 2004. However,
the antihyperlipidemics class, which accounted for 14% of overall
cost growth in 2003, accounted for 20.8% in 2004.
25
trend
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COMPONENTS OF DRUG TREND
Exhibit 13
Components of Unmanaged PMPY Cost Trend 2000 to 2004*
Inflation
x Units per Rx
x Brand/Generic Mix
x Therapeutic Mix
x Utilization
= Common Drugs
+ New Drugs
= All Drug
2000 vs 2001
2001 vs 2002
2002 vs 2003**
5.6%
0
-1.4%
4.4%
6.3%
15.6%
1.0%
16.7%
7.5%
-0.1%
-2.3%
5.3%
6.3%
17.5%
1.0%
18.5%
6.9%
0.3%
-2.6%
2.6%
6.8%
14.0%
0.5%
14.5%
2003 vs 2004**
6.0%
0.2%
-2.6%
3.7%
2.9%
10.4%
0.3%
10.6%
* The percentage contribution of each factor does not total the All Drug percentage increase. The calculation takes the base cost
for a given year and multiplies it by one times the percentage contributed by the first factor (inflation). The resulting total is then
multiplied by the percentage contributed by the second factor (number of units dispensed) and so on for each Common Drug factor.
The percentage added by the New Drugs is then added to the Common Drug percentage to yield an All Drug percentage increase.
Final results may differ due to rounding.
** Specialty drugs were removed from the calculations for 2002 versus 2003, and 2003 versus 2004.
The 2003 to 2004 PMPY ingredient-cost trend was analyzed in terms
of the following three major dimensions:
1. Changes in the utilization of common drugs (prescription drugs
that were dispensed in both 2003 and 2004)
2. Changes in the ingredient cost per prescription of these
common drugs
3. Introduction of new products to the market (prescription drugs
dispensed in 2004 but not in 2003)
Utilization of common drugs was further divided by prevalence and
intensity. Prevalence tracks the proportion of members who fill one
or more prescriptions from one year to the next (i.e., users). Intensity
is the number of prescriptions filled by users from one year to the next.
26 express scripts drug trend report 2004
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1. Inflation
2. Therapeutic Mix
3. Brand/Generic Mix
4. Units per Prescription
Two factors were used to measure the effect of new drugs: the change
in per-prescription cost (the differential between the cost of new drugs
and the average cost of common drugs), and the added cost associated
with increased utilization of new drugs.
The remainder of this section presents general discussions for the 25
most-costly therapy classes according to each of the trend components:
utilization, inflation, therapeutic mix, brand/generic mix, units per
prescription and new drugs. A summary of specialty-drug cost is also
presented in this section. Detailed reviews for each therapy class are
included in the Therapy Class Review section.
27
trend
Per-prescription costs were separated into the relative effects of four factors:
trend
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UTILIZATION OF COMMON DRUGS
After hitting a five-year high of 6.8% in 2003, common-drug utilization
growth dropped to only 2.9% in 2004. While 13 classes experienced
double-digit growth in 2003, only three classes exceeded a utilizationgrowth rate of 10% in 2004. In contrast, last year only three classes
experienced a utilization decrease; but in 2004, seven classes dropped
in utilization, with five of the seven classes also declining in prevalence.
The classes with utilization declines in 2004 shared some common
characteristics, including movement to OTC status, safety issues and
prevalence of acute illness. Among classes that decreased in both overall
utilization and prevalence, two (gastrointestinals and antihistamines) now
have OTC options for drugs that were leaders in the class as recently as
two years ago. Prilosec OTC® and nonprescription Claritin® are available
for members who previously may have filled only one or two prescriptions
a year to treat episodic heartburn or seasonal allergies, respectively. Drug
safety, also a significant concern in 2004, affected utilization in many
classes, especially the anti-rheumatics (NSAIDs). Publicity surrounding
the withdrawal of Vioxx® and the suspension of Bextra® from the market
was followed by much debate on the entire subclass of COX-2s.
The three classes experiencing double-digit growth in 2004 were
miscellaneous hematologicals, stimulants/anti-obesity and antihyperlipidemics. Not coincidentally, these three classes also had double-digit
increases in prevalence, indicating that conditions treated with these
drugs are being diagnosed more frequently. Miscellaneous hematologicals
consists mainly of products used to prevent blood clots. Utilization
of these drugs has been spurred by studies showing their effectiveness
in preventing a second heart attack or stroke when taken by individuals
who have already experienced a cardiovascular event. Increases in the
stimulants/anti-obesity class have been driven by increased diagnosis
of attention-deficit/hyperactivity disorder (ADHD) in children and
adolescents, as well as new indications for ADHD in adults. Antihyperlipidemics benefited from new guidelines that promote lower LDL-levels
among patients who are considered to be at high risk for adverse cardiac
events and who are appropriate for treatment with lipid-lowering drugs.
28 express scripts drug trend report 2004
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trend
Exhibit 14
Utilization of Common Drugs for the Top 25 Therapy Classes 2003 to 2004
Ranked by 2004 Percent Change
Rxs PMPY
% CHANGE
RANK
THERAPY CLASS
2003
2004
PREVALENCE
INTENSITY
TOTAL
1.
Misc. Hematologicals
0.08
0.10
18.5%
6.2%
25.8%
2.
Stimulants/Anti-Obesity
0.11
0.13
12.8%
3.2%
16.4%
3.
Antihyperlipidemics
0.83
0.96
13.0%
2.6%
16.0%
4.
Misc. Endocrines
0.21
0.23
5.8%
2.8%
8.8%
5.
Anticonvulsants
0.21
0.23
7.6%
1.0%
8.7%
6.
Beta Blockers
0.53
0.57
8.0%
0.4%
8.5%
7.
Antineoplastics
0.05
0.06
5.9%
2.3%
8.4%
8.
Antipsychotics
0.07
0.08
4.7%
3.1%
8.0%
9.
Antihypertensives
1.02
1.10
7.4%
0.3%
7.7%
10.
Antidiabetics
0.53
0.56
7.1%
0.1%
7.1%
11.
Antidepressants
0.83
0.86
0
3.7%
3.7%
12.
Narcotic Analgesics
0.50
0.52
3.0%
0.3%
3.3%
13.
Ophthalmic Products
0.18
0.18
-0.3%
3.5%
3.2%
14.
Migraine Products
0.06
0.06
2.3%
0.5%
2.8%
15.
Calcium Blockers
0.35
0.35
2.7%
-0.8%
1.9%
16.
Decongestants
0.17
0.17
-1.3%
2.9%
1.5%
17.
Antiasthmatics
0.43
0.43
-1.7%
3.2%
1.5%
18.
Oral Contraceptives
0.46
0.46
0.1%
0.2%
0.3%
19.
Anti-Rheumatics (NSAIDs)
0.43
0.43
0.8%
-1.5%
-0.6%
20.
Dermatologicals
0.33
0.33
0.4%
-1.1%
-0.7%
21.
Gastrointestinals
0.59
0.59
-2.2%
1.3%
-0.9%
22.
Antivirals
0.07
0.07
-15.3%
15.0%
-2.6%
23.
Quinolones
0.11
0.11
-0.4%
-3.2%
-3.6%
24.
Antihistamines
0.30
0.29
-8.2%
3.4%
-5.1%
25.
Macrolides
0.20
0.18
-8.6%
-4.0%
-12.2%
Top 25
8.65
9.05
14.05%
-8.34%
4.5%
Other
3.99
3.97
6.8%
-6.9%
-0.6%
Total
12.65
13.02
-1.0%
3.9%
2.9%
29
trend
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INFLATION
Inflation represents the cost-per-prescription impact of changes made in
the unit price charged by manufacturers. While still high, the 6% overall
inflation rate seen in 2004 was the lowest since 2001. The overall inflation
rate included a 7.2% rate for brands and a 0.4% rate for generics.
With estrogens — the perennial leader in inflation rate — dropping
out of the top 25 classes due to declining utilization, antivirals assumed
the top spot in inflation trend. Most of the antivirals trend was due
to increases in the cost of a single drug, Norvir®, which is used to treat
HIV. Anticonvulsants, the class that was second in 2004 inflation trend,
had a 9.7% increase. The major cause was increases as high as 17%
in the unit price of Neurontin® as its manufacturer anticipated
generic competition, which finally arrived in October.
New generics or impending generic competition were common
to many of the classes ranked highest due to inflation. Concerta®
and Adderall XR®, two drugs used to treat ADHD, are expected
to go generic in 2005. These products led price increases in the
stimulants/anti-obesity therapy class. Among dermatologicals, the
one drug driving higher-than-average inflation trend in this class was
oral isotretinoin, sold under the brand-name Accutane®, and several
recently-introduced branded generics. Price increases for Accutane
exceeded 20% in 2004, while generic prices stayed relatively flat. Within
the contraceptives class, the most frequently dispensed product, Ortho
Tri-Cyclen®, lost patent protection in late 2003. With price increases
in mid-2003 and late 2003, the effective price increase for Ortho
Tri-Cyclen from 2003 to 2004 was more than 12%. Finally, within
the decongestants class, prices for Flonase®, due to go generic in 2005,
increased more than 8% in 2004, leading to the 8% inflation
increase in the class.
In other classes that experienced relatively high inflation trends, generics
did not play as big a factor. Surprisingly, despite the recent introduction
of three new generics, the antidiabetics class was led by a brand product,
Lantus®, which had price increases approaching 20%. As a long-lasting
product that slowly releases insulin over an entire day, Lantus can be
used alone or with other drugs to treat diabetes. Because it has little
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Exhibit 15
Price Changes Due to Inflation for the Top 25 Therapy Classes 2003 to 2004
Ranked by Percent Change
PRICE % CHANGE
RANK
THERAPY CLASS
BRAND
GENERIC
ALL
1.
Antivirals
2.
Anticonvulsants
11.0%
1.8%
10.4%
10.5%
1.1%
3.
Stimulants/Anti-Obesity
10.4%
0.3%
9.7%
9.3%
4.
Dermatologicals
11.3%
0.3%
9.0%
5.
Oral Contraceptives
10.9%
2.1%
8.2%
6.
Decongestants
8.1%
-0.7%
8.0%
7.
Antidiabetics
9.1%
0.3%
7.7%
8.
Ophthalmic Products
8.3%
0.7%
7.7%
9.
Misc. Hematologicals
7.8%
2.5%
7.6%
10.
Misc. Endocrines
7.6%
0
7.3%
11.
Narcotic Analgesics
9.9%
1.4%
7.0%
12.
Antipsychotics
6.9%
0.9%
6.7%
13.
Macrolides
6.5%
4.8%
6.5%
14.
Migraine Products
6.5%
0
6.4%
15.
Anti-Rheumatics (NSAIDs)
7.1%
1.7%
6.2%
16.
Antidepressants
7.5%
-0.2%
6.1%
17.
Antihyperlipidemics
5.8%
0.2%
5.6%
18.
Antihypertensives
7.6%
0.3%
5.6%
19.
Quinolones
5.4%
20.
Antiasthmatics
6.9%
21.
Antihistamines
5.1%
0.1%
5.0%
22.
Calcium Blockers
5.6%
-0.2%
3.7%
23.
Antineoplastics
5.1%
-0.3%
3.7%
24.
Beta Blockers
6.1%
0.6%
3.5%
25.
0
-10.8%
5.4%
5.1%
Gastrointestinals
4.2%
0.3%
3.4%
Top 25
7.2%
0.1%
6.1%
Other
7.5%
1.0%
5.4%
Total
7.2%
0.4%
6.0%
31
trend
competition, Lantus has experienced above-average price increases.
Other classes with little generic competition were miscellaneous
hematologicals and miscellaneous endocrines. Plavix®, which commands
the dominant position in the miscellaneous hematologicals, saw price
increases of almost 8%. Among miscellaneous endocrines, Fosamax®
had the biggest impact on inflation trend, due to moderate price
increases and its dominant market share. Evista® and Miacalcin®,
miscellaneous endocrines products that saw market-share declines,
had the largest price increases at 8.5% and 15.8%, respectively.
trend
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THERAPEUTIC MIX
Therapeutic mix results from the changing market shares of individual
drugs within therapy classes, additional new strengths of existing drugs,
and changes in overall market share of each class. Compared with an
increase of 2.6% in 2003 when specialty drugs were excluded, therapeutic
mix increased to 3.7% in 2004. Analysis of the top 25 classes for 2004
reveals decreases in six classes — with double-digit increases in two. In
2003, seven classes experienced a mix-trend decrease, and the magnitude
of the therapeutic-mix declines in 2003 was greater than in 2004. For
example, in 2003, antihistamines experienced a 10.1% mix decline, due
primarily to the withdrawal of Claritin® from the prescription market.
In 2004, however, the antihistamine market was much more stable,
declining by only 0.7%. Likewise, miscellaneous endocrines stabilized
from a specialty-adjusted 5.2% decline in 2003 to a 1.2% decline in
2004, due to smaller increases in market share of lower-priced drugs.
Even estrogens, which dropped out of the top 25 by cost in 2004 due
to declining utilization, had a relatively flat therapeutic-mix change
in 2004 after dropping 4.3% in 2003.
Perhaps most dramatic among the top 25 classes was the movement
of the top two classes, antineoplastics and antivirals. Due to the use of
more expensive drugs to treat breast cancer and lung cancer, antineoplastics
increased 5.1 percentage points over last year’s therapeutic-mix trend
of 5.3% without specialty drugs. The antivirals class was actually more
in line with patterns seen before last year as it jumped 20 places in the
top 25 from a 2.4% decline in 2003 to a 10.5% increase in 2004. In
2003, an exceptionally severe flu season produced a run on drugs used
to mitigate flu symptoms. Generally used for only a few days, flu drugs
are much less expensive than most other drugs in the class, which are
used to treat longer-term conditions such as HIV. Despite a shortage
of flu vaccines, fewer outbreaks of flu occurred in 2004, resulting
in a therapeutic-mix trend that once again leaned toward the more
expensive products.
Five of the remaining classes in the top 10 (anticonvulsants, antipsychotics, stimulants/anti-obesity, narcotic analgesics and antiasthmatics)
experienced smaller mix increases in 2004 than in 2003. Patterns in
these classes indicate slowing in market-share growth for relatively new,
more expensive products in their respective classes. Relatively new drugs
such as Strattera® (in the stimulants/anti-obesity class) and Advair®
(in antiasthmatics) are two of the drugs driving these trends.
32 express scripts drug trend report 2004
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Exhibit 16
Price Changes Due to Therapeutic Mix for the Top 25 Therapy Classes 2003 to 2004
Ranked by Percent Change
RANK
THERAPY CLASS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Antivirals
Antineoplastics
Anticonvulsants
Antipsychotics
Stimulants/Anti-Obesity
Narcotic Analgesics
Ophthalmic Products
Oral Contraceptives
Antiasthmatics
Antidiabetics
Beta Blockers
Antidepressants
Dermatologicals
Gastrointestinals
10.5%
10.4%
6.7%
6.6%
5.7%
5.0%
4.8%
4.8%
4.7%
3.4%
3.3%
3.2%
3.0%
2.2%
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Antihypertensives
Misc. Hematologicals
Calcium Blockers
Quinolones
Decongestants
Migraine Products
Anti-Rheumatics (NSAIDs)
Antihistamines
Antihyperlipidemics
Misc. Endocrines
Macrolides
Top 25
2.0%
1.9%
1.4%
0.7%
0.1%
-0.4%
-0.5%
-0.7%
-1.1%
-1.2%
-1.4%
2.8%
Other
Total
% CHANGE
4.2%
3.7%
33
trend
Perhaps the most compelling aspect of therapeutic-mix trend lies beyond
the top 25 classes, however. Last year, the mix trend of “all other classes”
decreased by 1.5%, driven largely by three factors — increases in the
utilization of relatively inexpensive classes used to treat acute conditions,
transfer of Claritin-D® products to the non-prescription market and
a relatively weak new drug pipeline. In 2004, the impact on mix trend
from classes outside the top 25 was an increase of 4.2%. The increase
reflected a decline in the use of drugs to treat acute conditions, and
stabilization of the market for non-sedating antihistamine and decongestant
combinations. More significant, though, is the introduction of new, more
expensive drugs to treat previously untreated or under-treated conditions
as diverse as erectile dysfunction, pulmonary hypertension, Alzheimer’s
disease and advanced bacterial infections. As new drugs are introduced
into currently low-profile classes, the effect will be felt across the entire
drug spectrum.
trend
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BRAND/GENERIC MIX
In 2004, the strong impact of movement from brands to their generic
equivalents resulted in a brand/generic-mix trend decline of 2.6% —
essentially the same percentage seen in 2003. For the second year, the
contraceptives class had the greatest brand-to-generic movement, resulting
in a brand/generic-mix trend of -14.5%, after a decline of 7.8% in
2003. About 64% of the overall change in the contraceptives class
was due to the introduction of a generic for Ortho Tri-Cyclen late
in 2003. Other classes with brand/generic-mix trend of -7.8% or
more (the maximum impact of any class in 2003) were quinolones
and antidepressants. Quinolones saw a dramatic increase in the generic
fill rate — due primarily to the introduction of generics to a single drug,
Cipro®, in mid-2004. Generic conversions for Cipro alone accounted
for 98% of the change in the class. Generics for two significant brand
antidepressants, Wellbutrin SR® and Celexa®, were introduced in
2004. However, the product that accounted for 44% of the change
in antidepressants due to brand/generic mix was paroxetine (the generic
for Paxil®), which was introduced in 2003. With the full effects
of all three generic antidepressants hitting the class, generic fill
rate in the antidepressant class increased almost 10 percentage
points from 2003 to 2004.
Other classes with significant changes due to generics were antidiabetics
and narcotic analgesics. In the antidiabetics class, generic equivalents
for three products, Glucophage® XR, Glucotrol XL® and Glucovance®,
contributed to the brand/generic-mix change in the class. Changes in
brand/generic mix among the narcotic analgesics were somewhat tempered
because generics for several brands were introduced only in a few strengths,
rather than all strengths available for the brand. The biggest effect on
the class came from the late-2003 release of Percocet® generics in higher
strengths than were previously available. The 80mg strength generic
for OxyContin® was a close second. Other strengths of OxyContin
that are expected to go generic are likely to impact brand/generic
trend significantly in 2005.
Still other classes with notable trends in brand/generic mix were
dermatologicals, led by generics for Accutane, and antineoplastics,
led by generics for Purinethol® and Nolvadex®.
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trend
Exhibit 17
Changes in Brand/Generic Mix for the Top 25 Therapy Classes 2003 to 2004
Ranked by Percent Change
RANK
THERAPY CLASS
KEY GENERIC INTRODUCTION
% CHANGE
1.
Oral Contraceptives
Ortho Tri-Cyclen®
2.
Quinolones
Cipro®
-9.1%
3.
Antidepressants
Wellbutrin SR®, Paxil®, Celexa®
-8.5%
4.
Antidiabetics
Glucophage® XR, Glucotrol XL®, Glucovance®
-6.1%
5.
Narcotic Analgesics
Percocet®, OxyContin®
-5.8%
6.
Dermatologicals
Accutane®, Diprolene® AF
-5.4%
7.
Antineoplastics
Purinethol®, Nolvadex®
-4.0%
-14.5%
8.
Antihypertensives
Monopril®, Lotensin®
-2.3%
9.
Anticonvulsants
Neurontin®
-2.2%
10.
Calcium Blockers
Tiazac®
-1.4%
11.
Gastrointestinals
Prilosec®
-1.3%
12.
Ophthalmic Products
Ciloxin®, Ocuflox®
-1.3%
13.
Stimulants/Anti-Obesity
Adderall®
-0.8%
14.
Antipsychotics
Lithobid®, Clozaril®
-0.7%
15.
Beta Blockers
Betapace AF®, Lopressor®
-0.4%
16.
Decongestants
Atrovent®
-0.3%
17.
Misc. Hematologicals
Pletal®
-0.2%
18.
Antivirals
Cytovene®
-0.2%
19.
Migraine Products
D.H.E. 45®, Midrin®
-0.2%
20.
Antihistamines
Phenergan®
-0.1%
21.
Anti-Rheumatics (NSAIDs)
Voltaren® XR
-0.1%
22.
Antihyperlipidemics
N/A
0
23.
Macrolides
N/A
0
24.
Misc. Endocrines
N/A
0
25.
Antiasthmatics
N/A
Top 25
0.1%
-2.8%
Other
-1.9%
Total
-2.6%
35
trend
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UNITS PER PRESCRIPTION
As usual, the impact of changes in the number of units per prescription
on overall costs was very small in 2004. Changes in units per prescription
had only a 0.2% impact on overall trend. Within the top 25 classes,
the effect was positive in 12 classes, negative in 11and nominal in two.
Changes in units per prescription can be attributed to several distinct
factors. One major influence is increasing use of larger package sizes,
particularly for dermatologicals, the class with the greatest positive change
due to units. Although recent developments may affect its future use, the
current leading brand dermatological product is Elidel®. A cream used
primarily to treat mild or moderate eczema, Elidel comes in several tube
sizes. In 2004, market share of its two largest sizes increased from 31%
to 46% of all Elidel prescriptions. This trend toward the use of larger
package sizes likely will continue as conditions such as eczema are treated
prophylactically on a regular basis, rather than as-needed only when
a rash develops.
Changes in units are also due to more maintenance therapy for pain
management. Narcotic analgesics, typically a class with a relatively large
units impact, is an example of this trend. Hydrocodone and oxycodone,
two oral, solid generic products, have the greatest effect. Also increasing
in units per prescription was Duragesic®, a narcotic patch often used
by patients unable to take medications orally.
Classes with negative changes in units per prescription included
anticonvulsants, antivirals and antipsychotics. Increasingly, anticonvulsants
are prescribed for pain management in addition to seizure control. With
typical daily doses for pain management less than those for seizure control,
the number of units per prescription has declined for the class. For antivirals,
a decline in units per prescription was led by the anti-HIV product
Norvir. New treatment regimens for HIV likely have contributed to
this decline. Among antipsychotics, the decrease was primarily due
to a decline in the numbers of units per prescription for Seroquel®,
which may be used more than competing products for short-term
management of insomnia or anxiety.
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trend
Exhibit 18
Changes in Units per Prescription for the Top 25 Therapy Classes 2003 to 2004
Ranked by Percent Change
RANK
THERAPY CLASS
% CHANGE
1.
Dermatologicals
3.6%
2.
Narcotic Analgesics
2.6%
3.
Antiasthmatics
1.4%
4.
Gastrointestinals
1.1%
5.
Stimulants/Anti-Obesity
1.0%
6.
Macrolides
0.8%
7.
Antineoplastics
0.8%
8.
Beta Blockers
0.6%
9.
Antidiabetics
0.4%
10.
Antihistamines
0.3%
11.
Antihypertensives
0.2%
12.
Misc. Hematologicals
0.2%
13.
Misc. Endocrines
0
14.
Oral Contraceptives
15.
Anti-Rheumatics (NSAIDs)
-0.3%
16.
Calcium Blockers
-0.4%
17.
Migraine Products
-0.4%
18.
Antidepressants
-0.5%
19.
Antihyperlipidemics
-0.5%
20.
Decongestants
-0.7%
21.
Ophthalmic Products
-0.9%
22.
Quinolones
-1.0%
23.
Antipsychotics
-1.7%
24.
Antivirals
-1.7%
Anticonvulsants
-1.9%
25.
Top 25
0
0.2%
Other
0.2%
Total
0.2%
37
trend
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NEW DRUGS
In 2004, the FDA approved 31 new molecular entities and five new
therapeutic biologics.23 While the absolute number of drug approvals
is higher than in either 2002 or 2003, several approvals were for unusual
products (i.e., nutritional supplements) that were previously available
as nondrug products or in different formulations. Consequently, the
increase in drug approvals has not translated into an increased impact
on PMPY spending. The 0.3% increase for new drugs in 2004 is the
lowest seen since 1999.
The new drug pipeline continues to have no more than a modest effect
on drug trend. Only nine of the top 25 therapy classes had a measurable
change due to new drugs, and only one of those classes had an increase
of greater than 1%. The 2004 findings are dramatically different from
those seen in 2003, when a single product, Strattera, resulted in a 21%
change in PMPY costs for the stimulant/anti-obesity class, and four
additional therapy classes saw increases of greater than 1%.
The antiasthmatic therapy class exhibited the largest growth in PMPY
spend. Although overall trend growth of 1.6% among antiasthmatic
drugs was modest, it was almost three times the trend growth observed
in the second-highest therapy class. New drug spend for antiasthmatics was
almost entirely due to Spiriva®, an inhaled drug for chronic obstructive
pulmonary disease (COPD). Spiriva offers less-frequent dosing than its
competitors. A combination product, VytorinTM, was introduced into the
antihyperlipidemics class in 2004; its entry caused a slight decrease in
costs per prescription since Vytorin is less expensive than the two drugs
it contains when they are taken independently. Other significant new
drugs in 2004 were combinations of existing products that belong to
different therapy classes. Because they are combinations, some of these
new products are not included in either of the classes corresponding
to their components. Therefore, they are not in the top 25 classes.
Caduet®, a combination of Norvasc® (a calcium blocker) and Lipitor®
(an antihyperlipidemic) accounted for 6.5% of total new drug costs,
and SymbyaxTM, a combination of the antidepressant Prozac® and the
antipsychotic Zyprexa®, accounted for 10% of new drug costs.
23
F-D-C Reports, Inc. The Pink Sheet 2004/2005 Pharma Almanac. 2004;66(52):36-41.
38 express scripts drug trend report 2004
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trend
Exhibit 19
Changes in New Drugs per Prescription for the Top 25 Therapy Classes 2003 to 2004
Ranked by Percent Change
RANK
THERAPY CLASS
SIGNIFICANT NEW DRUG
% UTILIZATION
% COST
% CHANGE
1.
Antiasthmatics
2.
Ophthalmic Products
Spiriva®
1.2%
0.5%
1.6%
ElestatTM
0.5%
0.2%
3.
0.7%
Antihyperlipidemics
VytorinTM
0.5%
-0.1%
0.4%
4.
Antidepressants
Cymbalta®
0.3%
0.1%
0.4%
5.
Misc. Endocrines
Orfadin®
0
0.4%
0.4%
6.
Antineoplastics
TarcevaTM
0
0.2%
0.2%
7.
Quinolones
Factive®
0.1%
0
0.1%
8.
Migraine Products
Ergomar®
0
0
0.1%
9.
Dermatologicals
ErtaczoTM
0.1%
0
0
10.
Anticonvulsants
N/A
0
0
0
11.
Decongestants
N/A
0
0
0
12.
Gastrointestinals
N/A
0
0
0
13.
Antihypertensives
N/A
0
0
0
14.
Antidiabetics
N/A
0
0
0
15.
Anti-Rheumatics (NSAIDs)
N/A
0
0
0
16.
Narcotic Analgesics
N/A
0
0
0
17.
Antihistamines
N/A
0
0
0
18.
Calcium Blockers
N/A
0
0
0
19.
Beta Blockers
N/A
0
0
0
20.
Antivirals
N/A
0
0
0
21.
Antipsychotics
N/A
0
0
0
22.
Stimulants/Anti-Obesity
N/A
0
0
0
23.
Oral Contraceptives
N/A
0
0
0
24.
Misc. Hematologicals
N/A
0
0
0
25.
Macrolides
N/A
0
0
0
Top 25
0.2%
0.1%
0.2%
Other
0.3%
0.3%
0.5%
Total
0.2%
0.1%
0.3%
39
trend
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SPECIALTY DRUGS
Drug products that must be stored, distributed or administered in nonstandard ways are considered to be specialty drugs. Because of their unique
requirements and their usually high average costs per prescription — which
have distorting effects on costs for their therapy classes — these products
have been removed from the main analyses in the Drug Trend Report.
However, the impact of specialty drugs on PMPY costs is important
to recognize. For that reason, we have included top-level data on PMPY
specialty-drug costs for the sample of members used in this Report to
determine overall prescription-drug trend. A list of the top 10 specialty
drugs for 2004 is also included.
For 2004, PMPY spending on specialty drugs was $52.94, approximately
7% of total PMPY costs in 2004. This percentage is likely an underrepresentation of the true specialty-drug market, because some specialty
drugs are still covered under medical benefits.
In 2004, utilization of specialty drugs by the population of members
analyzed for the 2004 Drug Trend Report increased by 8.9% — almost
three times the rate of increase for non-specialty drugs. Likely reasons
for this growth include the continued transfer of specialty drugs from
the medical benefit to the prescription-drug benefit, significant new
specialty-drug launches and expanded indications for existing specialty
drugs. Cost-per-prescription trend was 9.1% — slightly higher than
the trend for non-specialty drugs.
Exhibit 20
Specialty-Drug Trend Top 10 Drugs 2004
BRAND NAME
INDICATION(S)
COST PMPY
% OF SPECIALTY-DRUG SPEND
Enbrel®
RA, Psoriasis, Others
$ 8.34
15.7%
Avonex®
MS
$ 3.95
7.5%
Copaxone®
MS
$ 3.11
5.9%
Humira®
RA
$ 2.42
4.6%
Procrit®
Anemia
$ 2.34
4.4%
Lovenox®
Blood Clots
$ 2.21
4.2%
Pegasys®
Hepatitis C
$ 1.79
3.4%
Betaseron®
MS
$ 1.48
2.8%
Rebif®
MS
$ 1.30
2.5%
Neupogen®
Neutropenia
$ 1.12
2.1%
Other
$24.89
47.0%
Total All Specialty
$52.94
40 express scripts drug trend report 2004
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Treatment of RA accounts for the most cost among specialty drugs, with
two drugs, Enbrel® and Humira®, representing approximately 20% of total
specialty spend. A third injectable product, Remicade®, is also commonly
used in the treatment of RA, but because it is an intravenous infusion
given at an infusion center or medical clinic, its use is under-reported
through prescription-drug claims alone. As new data emerge for these
products, more individuals with RA are being treated earlier in the disease
process, and treatment usually continues for longer periods of time. In
addition, the classification of these products as therapy for RA may be
misleading, since new indications may increase their use in other disease
states. For example, Enbrel, which received a new indication in 2004 for
the treatment of psoriasis, is also approved for several types of arthritis.
The second class with significant specialty-drug spend in 2004 contains
the drugs used to treat MS. The four most common MS drugs all made
the top 10. When combined, these four drugs represent approximately
18.5% of overall specialty-drug spend. The MS market is more stable
than the anti-rheumatics market, and in contrast to drugs used to treat
RA, MS drugs generally are not used for other diseases. PMPY drug spend
for MS drugs had been projected to decrease in 2005, because Tysabri®,
a new infusion product, was expected to replace other therapies for a
significant number of MS patients. Since Tysabri must be administered
by a healthcare professional, its use would have shifted some costs to the
medical benefit. However, Tysabri marketing was suspended in February
2005 due to a potentially severe side effect, and its re-introduction to the
market is uncertain.
The other drugs in the top 10 list of specialty drugs are used to treat
or prevent relatively serious conditions that include blood clots,
hepatitis C and complications of cancer.
41
trend
Exhibit 20 provides a glimpse of the top 10 drugs contributing to specialtydrug spend in 2004. Drugs for two conditions, rheumatoid arthritis
(RA) and multiple sclerosis (MS), contributed almost 40% of overall
drug spending for specialty drugs in 2004.
trend
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Notes
42 express scripts drug trend report 2004
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Page 9
therapy class review
Express Scripts Drug Trend Report 2004
THERAPY CLASS REVIEW
3
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Page 43
This section presents detailed information on the utilization and cost
of the top 25 therapy classes for 2004. Components of trend have
been analyzed for each class. Also included are market-share trends for
the major drugs within the class and projected trends for the class as
a whole. Because specialty drugs have been removed from the calculations
in some therapy classes, trends for 2002 have been recalculated. Therefore,
percentages reported for 2002 in the 2003 Drug Trend Report may not
match those in this Report. All drugs classified in this Report as both
common and new are included in the reviews. Drugs that are in the
pipeline and patent expirations that have significant potential to affect
a specific class in the next several years are also presented.
Cost per Prescription and PMPY Cost For the Top 25 Therapy Classes 2003 to 2004
(Excluding Specialty Drugs)
AWP PER Rx
THERAPY CLASS
Antihyperlipidemics
Gastrointestinals
Antidepressants
Antihypertensives
Antidiabetics
Antiasthmatics
Anti-Rheumatics (NSAIDs)
Anticonvulsants
Narcotic Analgesics
Dermatologicals
Miscellaneous Endocrines
Antihistamines
Calcium Blockers
Beta Blockers
Antivirals
Antipsychotics
Stimulants/Anti-Obesity
Oral Contraceptives
Miscellaneous Hematologicals
Decongestants
Antineoplastics
Migraine Products
Ophthalmic Products
Quinolones
Macrolides
Top 25
Other
Total
PMPY COST
2003
2004
% CHANGE
2003
2004
% CHANGE
$ 81.45
$100.28
$ 70.76
$ 35.30
$ 61.19
$ 66.82
$ 63.76
$ 89.83
$ 35.82
$ 52.03
$ 66.75
$ 53.66
$ 41.71
$ 24.57
$171.47
$135.73
$ 81.23
$ 25.34
$103.21
$ 57.71
$154.09
$132.02
$ 41.62
$ 82.90
$ 43.51
$ 60.26
$ 28.98
$ 50.56
$ 84.62
$105.70
$ 70.63
$ 37.23
$ 64.30
$ 74.96
$ 67.04
$100.80
$ 38.87
$ 57.23
$ 70.99
$ 56.03
$ 43.05
$ 26.31
$205.18
$150.62
$ 94.08
$ 24.58
$113.13
$ 61.83
$171.02
$139.19
$ 46.05
$ 79.23
$ 46.07
$ 65.26
$ 31.39
$ 54.29
3.9%
5.4%
-0.2%
5.5%
5.1%
12.2%
5.1%
12.2%
8.5%
10.0%
6.4%
4.4%
3.2%
7.1%
19.7%
11.0%
15.8%
-3.0%
9.6%
7.1%
11.0%
5.4%
10.6%
-4.4%
5.9%
8.3%
8.3%
7.4%
$ 67.58
$ 59.20
$ 58.60
$ 36.12
$ 32.26
$ 28.44
$ 27.62
$ 18.81
$ 17.97
$ 17.19
$ 14.14
$ 16.15
$ 14.47
$ 12.91
$ 12.16
$ 9.93
$ 8.77
$ 11.66
$ 7.88
$ 9.87
$ 8.44
$ 8.05
$ 7.45
$ 9.25
$ 8.82
$523.75
$115.71
$639.46
$ 81.76
$ 61.84
$ 60.80
$ 41.02
$ 36.31
$ 32.72
$ 28.86
$ 22.94
$ 20.14
$ 18.78
$ 16.36
$ 16.01
$ 15.22
$ 15.00
$ 14.17
$ 11.89
$ 11.82
$ 11.35
$ 10.88
$ 10.74
$ 10.15
$ 8.73
$ 8.55
$ 8.53
$ 8.19
$582.74
$124.81
$707.56
21.0%
4.5%
3.8%
13.6%
12.5%
15.1%
4.5%
21.9%
12.1%
9.3%
15.7%
-0.9%
5.2%
16.2%
16.5%
19.8%
34.8%
-2.7%
38.0%
8.8%
20.3%
8.4%
14.7%
-7.8%
-7.1%
11.3%
7.9%
10.6%
43
therapy class review
Therapy Class Review
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ANTIHYPERLIPIDEMICS
RANK 1
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
3.9%
5.6%
-0.5%
0
-1.1%
16.0%
13.0%
2.6%
0.4%
TOTAL
PMPY: $81.76
Rx PMPY: 0.97
Prevalence of Use: 10.3%
Average Cost/Rx: $84.62
# Rx/User/Year: 9.38
20.9%
The antihyperlipidemics continued their reign as the top therapy class in
2004. With a PMPY cost of $81.76, they now represent over 11% of total
PMPY spending. Utilization growth continued to drive trend, rising 16%
in 2004. An increase in prevalence was responsible for approximately 80%
of the utilization increase. Cost-per-prescription trends were down in
2004, from 5.2% to 3.9%, driven largely by decreases in inflation and
therapeutic mix. A new drug, VytorinTM, also contributed to the trend
increase. Vytorin, approved in July 2004, is a combination of Zocor®
and Zetia®, two products that were already on the market.
As expected, statins dominate the therapy class, with a combined
market share of approximately 80%. Newer products such as Crestor®
and Vytorin are beginning to take market share from the leading products,
but the top drug, Lipitor®, still commands over 50% of prescriptions.
Among the non-statins, Zetia continues to gain market share, growing
to 6.6% of prescriptions, up from 3.8% in 2003. Generic lovastatin —
the only generic statin currently on the U.S. market — also grew
in market share, from 1.7% to 2.4% of prescriptions.
Antihyperlipidemics Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
60
Lipitor $81.62
50
Zocor $115.93
40
Pravachol $110.46
30
Zetia $69.83
20
Generics $72.19
10
Crestor $70.77
0
2000
2001
2002
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2003
2004
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Percent
Antihyperlipidemics Projected Trend
25
20
15
10
5
0
23.8
2002
23.8
2003
21.0
2004
Cost
19.7
2005
19.7
2006
Prescriptions
16.5
17.6
17.6
2007
2008
2009
Antihyperlipidemics Pipeline
Brand
Lipitor® and torcetrapib
Niaspan® and Zocor®
Mevacor® OTC
Pravachol® OTC
Generic
atorvastatin and torcetrapib
niacin, extended release and simvastatin
implitapide
eflucimibe
JTT-705
GW 590735
lovastatin
pravastatin
Proposed Use
Decreasing LDL/Increasing HDL
Combination high-cholesterol therapy
High cholesterol/atherosclerosis
High cholesterol
Increasing HDL
High cholesterol
OTC treatment of high cholesterol
OTC treatment of high cholesterol
Availability
2007
2007
2007
2008
2008
2009
Unknown
Unknown
Antihyperlipidemics Patent Expirations
Brand
Niaspan®
Pravachol®
Zocor®
Generic
niacin, extended release
pravastatin
simvastatin
Patent Expiration
Challenge pending
April 20, 2006
June 23, 2006
The most significant new drug story in this class is the Lipitor and torcetrapib combination product
that is being developed. Known chemically as a cholesteryl ester transfer protein (CETP) inhibitor,
torcetrapib blocks one of the proteins that transports cholesterol in the blood. Unlike statins and
most other currently-available cholesterol agents, which lower LDL, or “bad” cholesterol, torcetrapib
raises HDL, or “good” cholesterol. It will not be available as a stand-alone product, so it cannot
be combined with any statin other than Lipitor. The combination product also represents a patentextension strategy for Lipitor, which faces patent expiration in 2010. A 2007 launch for Lipitor and
torcetrapib is possible, but optimistic. JTT-705 is also a CETP inhibitor. Other drugs in the lipid-control
pipeline affect blood components other than 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA)
reductase — the enzyme blocked by statins. Eflucimibe blocks acyl-coA cholesterol acyltransferase
(ACAT); implitapide is an inhibitor of microsomal triglyceride transfer protein (MTTP); GW 590735
is an agonist for peroxisome proliferation-activated receptors (PPARs). Another significant story
in this class is the probable availability in 2006 of generics for Pravachol and Zocor, statins that
together represent approximately 20% of the total market for lipid-lowering drugs. The generic for
Zocor will also be the most potent statin available generically. Over-the-counter (OTC) versions of
statin drugs are unlikely in the near term, after an early 2005 vote by members of two FDA Advisory
Committees repeated an earlier committee recommendation against the switch.
45
therapy class review
LOOKING AHEAD
While another therapy class is unlikely to dislodge the antihyperlipidemics from their top perch
in the foreseeable future, upcoming events probably will have an impact on their drug trend. First,
the patents for Pravachol® and Zocor expire in 2006. These products, which had a combined market
share of 21.1% in 2004, will be the second and third statins to become available as generics. Then
in 2007, the patent-extension strategy for Lipitor could emerge in the form of a combination product
that both lowers LDL and raises HDL. These events, combined with significant marketing budgets
for existing drugs and the aging of the population, will likely result in continued utilization growth.
We expect drug trend for this class to average 17.9% annually over the next four years.
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GASTROINTESTINALS
RANK 2
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
5.4%
3.4%
1.1%
-1.3%
2.2%
-0.9%
-2.2%
1.3%
0
TOTAL
PMPY: $61.84
Rx PMPY: 0.59
Prevalence of Use: 8.9%
Average Cost/Rx: $105.70
# Rx/User/Year: 6.56
4.5%
For the second consecutive year, PMPY trend for gastrointestinal (GI)
drugs decreased significantly, with the 2004 trend increase of 4.5%
being the lowest in recent history. A significant slowdown in utilization
was the culprit, most likely due to the introduction of Prilosec OTC®
in September 2003. Fewer people were taking prescription versions
of these drugs in 2004, as indicated by the 2.2% decrease in prevalence.
Cost-per-prescription trends increased in 2004, largely due to increased
use of the brands Nexium® and Prevacid®.
Proton pump inhibitors (PPIs) are the most popular gastrointestinal
drugs, with a combined 79% of prescriptions. In 2004, a switch occurred
in the top product in terms of market share, with Nexium surpassing
Prevacid. Despite the slowdown in utilization, three of the four brandonly PPIs grew their market share, while the omeprazole family (Prilosec®
and generics) held steady. Generic market share dropped from 35%
to 32.6%, as fewer people used H2 antagonists such as ranitidine and
famotidine. Generic erosion could continue in 2005 as prescription
versions of ranitidine 150mg shift to OTC status.
Gastrointestinals Market-Share Trend
35
Generics $77.87
30
Percent of Prescriptions
therapy class review
32916_43-96
Nexium $134.19
25
Prevacid $137.80
20
Protonix $106.58
15
10
Aciphex $133.82
5
Prilosec $165.54
0
2000
2001
2002
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2003
2004
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Gastrointestinals Projected Trend
Cost
Prescriptions
30
25.4
25
Percent
20
15
11.5
10
4.5
7.1
5.0
5.0
5.0
5.0
2006
2007
2008
2009
5
0
-5
2002
2003
2004
2005
Gastrointestinals Pipeline
Brand
EnteregTM
CalmactinTM
ITAXTM
Generic
alvimopan
cilansetron
itopride
GW 597599
DDP-225
renzapride
AZD0865
mosapride
Proposed Use
Post-operative ileus
Irritable bowel syndrome
Dyspepsia
Chemotherapy-induced nausea and vomiting
Irritable bowel syndrome
Irritable bowel syndrome
Acid-related GI disease
GERD
Approval
2005
2007
2007
2007
2008
2008
2008+
2008+
Gastrointestinals Patent Expirations
Brand
Zofran®
Kytril®
Prevacid®
Generic
ondansetron
granisetron
lansoprazole
Patent Expiration
Dec. 24, 2006
June 29, 2008
Nov. 10, 2009
The bulk of drug use in this class is for the treatment of gastroesophageal reflux disease (GERD)
and the treatment or prevention of ulcers. PPIs, which have largely replaced the H2 receptor
antagonists for those indications, continue to be the mainstay of therapy for these conditions.
The PPIs are a mature class, with a significant change in 2003 caused by the introduction of
an OTC form of Prilosec®, allowing patients with GERD to treat themselves. Omeprazole, the
generic version of Prilosec, is now widely available, and has, along with Prilosec OTC®, tempered
previous growth in the GI class. No patent expirations on other branded PPIs are expected until
2009, and no new products are expected in the class. Research focus has shifted to two areas:
new therapies for Crohn’s disease (mostly injectables, which will be included as specialty drugs)
and agents for irritable bowel syndrome, which are in the pipeline for 2005 and beyond. Researchers
continue to search for a drug to replace Propulsid® (cisapride), which was used to treat ileus and
gastroparesis before cardiac side effects forced its withdrawal in 2000.
47
therapy class review
LOOKING AHEAD
While we do not expect utilization growth of this class to return to past levels, use could increase
slightly in 2005 as concerns over the COX-2 inhibitors could lead more patients to try an NSAID plus
a PPI. Additional omeprazole generics that could enter the market in 2005 or 2006 would provide the
first low-cost generic competition. The remaining PPIs are patent-protected until at least 2009, and
additional OTC introductions are unknown. We expect annual growth to be consistent at 5% over
the next four years.
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ANTIDEPRESSANTS
RANK 3
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
-0.3%
6.1%
-0.5%
-8.5%
3.2%
3.7%
0
3.7%
0.4%
TOTAL
PMPY: $60.80
Rx PMPY: 0.86
Prevalence of Use: 10.6%
Average Cost/Rx: $70.63
# Rx/User/Year: 8.09
3.7%
Antidepressant trend slowed markedly in 2004, due to both the introduction
of generics to Celexa® and a general slowdown in utilization. The overall
trend increase of 3.7% in 2004 is down sharply from a 16.9% increase
in 2003. The negative growth in per-prescription costs was led by
a significant decrease in brand/generic mix, reflecting increased use
of generics to Celexa, Wellbutrin SR® and Paxil®. The overall utilization
trend increase of 3.7% was down from 11.2% in 2003. The difference in
utilization growth was almost entirely driven by a decrease in prevalence.
The negative publicity surrounding a potential link between antidepressants
and suicidal behavior among children and adolescents may have caused
patients to seek other treatments. The introduction of a new drug,
Cymbalta®, contributed approximately 10% of the overall trend increase.
As expected, market share for generic antidepressants increased in 2004,
up a full 10% from 2003. Several products, including Paxil, Celexa,
Wellbutrin SR and Remeron SolTab®, faced generic competition at some
point in the year. Zoloft® remains the market leader, but it too is facing
generic competition in 2006. Lexapro® and Effexor® continue to grow
in share — Lexapro due to heavy advertising and Celexa conversions,
and Effexor positioning itself as a non-SSRI (selective serotonin
reuptake inhibitor).
Antidepressants Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
45
40
35
30
25
20
15
10
5
0
Generics $54.33
Zoloft $86.17
Lexapro $65.08
Celexa $78.04
Paxil $85.52
Prozac $173.12
2000
2001
2002
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2003
2004
Effexor $123.20
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Antidepressants Projected Trend
20
Cost
Prescriptions
18.7
16.9
15
10.2
10
8.2
9.2
10.2
9.2
3.8
5
0
-5
2002
2003
2004
2005
2006
2007
2008
2009
Antidepressants Pipeline
Brand
EMSAMTM
Generic
selegiline transdermal
desvenlafaxine (DVS-233)
R-673
SR-58611
saredutant
CP 122,721
radafaxine
Proposed Use
Depression
Depression
Depression/Anxiety disorder
Depression
Depression
Depression/Nausea
Depression
Availability
2005
2007
2007
2007
2008
2008
2008
Antidepressants Patent Expirations
Brand
Paxil CRTM
Zoloft®
Wellbutrin XL®
Effexor®/XR
Lexapro®
Generic
paroxetine, controlled release
sertraline
bupropion, extended release
venlafaxine
escitalopram
Patent Expiration
Aug. 12, 2005
June 30, 2006
Aug. 28, 2006
June 13, 2008
In litigation
The antidepressant market is in transition, with all of the SSRIs plus Effexor/XR and Wellbutrin XL
expected to face generic competition by the end of the decade. A highly-studied new category of
antidepressants, the neurokinin receptor antagonists, has not met early high expectations, even
though several products in the subclass (saredutant, R-673 and CP 122,721) are in late-stage
development. Desvenlafaxine and radafaxine are the patent extension strategies for Effexor XR
and Wellbutrin XL, respectively. Approval of the first transdermal patch for depression, EMSAM,
could be granted as early as 2005. EMSAM contains selegiline, which is both a relatively selective
inhibitor of the enzyme monoamine oxidase B (MAO-B) and a drug originally developed for treating
Parkinson’s disease.
49
therapy class review
LOOKING AHEAD
With Zoloft losing patent protection in 2006, only one brand SSRI (Lexapro) with significant market
share will remain. Effexor and Cymbalta are likely to become leading players in the class. With higher
costs per prescription than SSRIs, these products could offset any trend decreases due to generics.
Utilization should also rebound as safety concerns are addressed. We project annual growth averaging
9.7% through 2009.
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ANTIHYPERTENSIVES
RANK 4
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
5.5%
5.6%
0.2%
-2.3%
2.0%
7.7%
7.4%
0.3%
0
TOTAL
PMPY: $41.02
Rx PMPY: 1.1
Prevalence of Use: 10.9%
Average Cost/Rx: $37.23
# Rx/User/Year: 10.07
13.6%
The antihypertensives class contains angiotensin-converting enzyme
inhibitors (ACEIs), angiotensin receptor blockers (ARBs), vasodilators
and combination products. For the first time in a number of years, overall
trend growth in this class was less than 10%, driven by slower utilization
growth. Cost-per-prescription trends actually rose, as the introduction
of fewer new generics caused an increase in brand/generic mix. Utilization
growth of 7.7% was down from 12.4% in 2003, with decreases in both
prevalence and intensity of use. Antihypertensives continue to be the
most widely used therapy class, at 1.1 prescriptions PMPY.
Generic drug use, which continues to grow in this class, now approaches
50% of overall use, up from 14% in 2000. Overall generic market-share
growth should begin to slow in upcoming years as fewer products lose
patent protection. Among the remaining brands, Diovan® is the only
brand product with a market share of greater than 10%.
Antihypertensives Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Generics $32.18
40
Diovan $54.13
Altace $49.46
30
Lotrel $57.29
20
Accupril $71.30
10
0
2000
2001
2002
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2003
2004
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Antihypertensives Projected Trend
20
17.3
Prescriptions
16.9
16
Percent
Cost
13.6
13.4
2004
2005
12.3
13.3
14.4
14.4
2008
2009
12
8
4
0
2002
2003
2006
2007
Antihypertensives Pipeline
Brand
BiDil®
RevatioTM
ThelinTM
Generic
isosorbide dinitrate and hydralazine
sildenafil
sitaxsentan
aliskiren
darusentan
Proposed Use
Congestive heart failure in African-Americans
Pulmonary arterial hypertension
Pulmonary arterial hypertension
Hypertension
Resistant hypertension
Availability
2005
2005
2006
2007
2008
Antihypertensives Patent Expirations
Brand
Altace®
Aceon®
Mavik®
Cozaar®
Hyzaar®
Generic
ramipril
perindopril
trandolapril
losartan
losartan and HCTZ
Patent Expiration
In litigation
Feb. 21, 2007
Dec. 12, 2007
Feb. 11, 2010
Feb. 11, 2010
In the last year, few new developments affected the antihypertensives class, which is composed
primarily of the two subclasses: ACEIs and ARBs. About two years ago, the ACEIs reached a mature
state, with generic products dominating ACEI prescriptions. Although the ARBs have not yet matured,
no new ARBs are in development, and the use of existing ARBs for hypertension is stable. Any growth
for ARBs will be tied to new indications; they are currently under investigation for use by high-risk
congestive heart failure (CHF) patients. Aliskiren, a new type of antihypertensive that inhibits renin,
is expected to be approved in 2007. BiDil, which combines two older drugs into a combination product,
is being studied specifically to treat CHF in African-Americans. Approval is expected in 2005.
Short-term growth in this class may come from new compounds designed to treat pulmonary arterial
hypertension, a relatively rare but severe condition that can cause permanent lung and heart damage.
Revatio, a new formulation of the erectile dysfunction drug Viagra®, is expected to be approved
in 2005, and approval for Thelin is expected in 2006. These drugs will be priced significantly
higher than drugs for general hypertension.
51
therapy class review
LOOKING AHEAD
The aging of the population, the epidemic of obesity, and more aggressive treatment of hypertension
should result in consistent trend growth for the next few years despite the lack of significant new
products in the class. Cost-per-prescription trend increases should remain modest, given the level
of generic competition. We expect trend to continue in the 12% to 14% range through 2009.
therapy class review
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ANTIDIABETICS
RANK 5
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
TOTAL
KEY FACTS
5.1%
7.7%
0.4%
-6.1%
3.4%
7.1%
7.1%
0.1%
0
PMPY: $36.31
Rx PMPY: 0.56
Prevalence of Use: 4.1%
Average Cost/Rx: $64.30
# Rx/User/Year: 13.9
12.5%
Antidiabetic drug trend slowed in 2004, with the overall trend increase
of 12.5% more closely resembling the trend increase in 2002 (14.6%)
than in 2003 (23.1%). This slower rate of growth was due to decreases
in both cost-per-prescription and utilization trends. Cost-per-prescription
trend increased by 5.1%, down from 10.2% in 2003. Brand/generic mix
dropped to -6.1% in 2004, down from -1.2% in 2003, due to growth in
generic metformin prescriptions. Utilization-trend growth decreased from
11.7% to 7.1%, driven by a decrease in prevalence, which is surprising,
given the obesity epidemic and its associated increased risk for diabetes
in the U.S. As in 2003, new drugs did not contribute to drug-trend
increases in this therapy class.
As mentioned previously, prescriptions for generic metformin continued
to grow, resulting in a market share of 26.6% at the end of 2004. Among
the single-source brands, both Actos® and Avandia® held steady market
shares. Market share for Glucotrol XL® declined, however, following
the introduction of its generic counterparts.
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therapy class review
Percent of Prescriptions
Oral Antidiabetics Market-Share Trend
30
metformin $35.57
25
glipizide $15.49
20
Actos $144.88
15
Avandia $118.18
10
Glucophage $56.48
5
0
Glucotrol $23.74
2000
2001
2002
2003
2004
The long-acting insulin Lantus® continues to grow in market share,
as more patients convert to the once-daily product from other insulins.
The newer short-acting insulins, which are often used in combination
with a long-acting product, showed mixed market-share gains. The leading
product, Humalog®, has largely preserved its market share in recent
years, and a second product, Novolog®, is also growing at the expense
of the older Novolin® products. Average costs per prescription are higher
for the newer short-acting products, although exact costs are difficult
to measure given the dosing variability of insulin.
30
25
20
15
Insulins Market-Share Trend
10
8
Lantus $79.85
5
Percent of Prescriptions
7
Humalog $93.69
6
5
Humulin N $68.38
4
Novalog $133.83
0
3
Novolin $62.41
2
1
0
2000
2001
2002
2003
2004
53
8
7
6
5
4
3
2
1
0
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LOOKING AHEAD
The decrease in diabetes-drug trend in 2004 was likely a one-year event, as the market benefited
from additional metformin-based products losing patent protection. The increasing prevalence
of obesity and a continued emphasis on aggressive management of diabetes, combined with
the probable introduction of several new products in the coming years, likely will cause trend
increases leveling off at 21% through 2009.
Antidiabetics Projected Trend
Cost
Prescriptions
23.1
25
20
18.8
17.7
2005
2006
21.0
21.0
21.0
2007
2008
2009
14.6
Percent
therapy class review
32916_43-96
15
12.5
10
5
0
2002
2003
2004
Antidiabetics Pipeline
Brand
GlumetzaTM
Levemir®
Avandaryl®
Actoplus MetTM
NeurodexTM
ExuberaTM
PyridorinTM
Basulin®
GalidaTM
Generic
metformin, extended release
insulin detemir
rosiglitazone and glimepiride
muraglitazar
exenatide
pioglitazone and metformin
dextromethorphan and quinidine
vildagliptin (LAF237)
ruboxistaurin
sulodexide
inhaled insulin
MK-0431
pyridoxamine
basal insulin
naveglitazar
tesaglitazar
liraglutide
Proposed Use
Oral antidiabetic
Long-acting insulin
Oral antidiabetic
Oral antidiabetic
Diabetes (type 2)
Oral antidiabetic
Neuropathic pain
Oral antidiabetic
Diabetic complications
Diabetic nephropathy
Inhaled insulin
Oral antidiabetic
Diabetic kidney disease
Long-acting insulin
Oral antidiabetic
Oral antidiabetic
Diabetes (type 2)
Antidiabetics Patent Expirations
Brand
Amaryl®
Avandia®
Glyset®
PrecoseTM
Generic
glimepiride
rosiglitazone
miglitol
acarbose
54 express scripts drug trend report 2004
Patent Expiration
Oct. 6, 2005
Feb. 28, 2009
July 27, 2009
March 6, 2010
Availability
2005
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2007
2007
2007
2008
2008
2008+
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Although insulin has been available for 80 years, it has never been available in an oral formulation
because it is not stable in stomach acid. New technology may make oral insulin possible through
inhalation. Exubera, the inhaled insulin closest to approval, has had a long development path, with
many bumps along the way, mostly relating to safety. However, its eventual approval may expand
the insulin market, as patients unwilling or unable to use insulin injections may choose new delivery
technologies. At least five additional inhaled insulin products are in development; however, most are
at least three years away from the market.
With regard to oral antidiabetic agents, two general categories have emerged in the near-term
pipeline: PPAR agonists and DPP-IV inhibitors. Stimulating PPARs (peroxisome proliferatoractivated receptors) sensitizes the body to insulin. Sometimes referred to as “glitazones,”
currently-available PPAR activators (agonists) include Avandia and Actos. Investigational PPAR
agonists — muraglitazar, naveglitazar and tesaglitazar — are expected to be on the U.S. market
by 2008. PPAR agonists that target mainly PPAR-gamma receptors are known for their glucoselowering abilities; those that are more active at PPAR-alpha receptors generally have positive
effects on blood cholesterol. A new category of oral antidiabetic agents in the pipeline, DPP-IV
inhibitors, work by blocking an enzyme called dipeptidyl peptidase IV (DPP-IV). Inhibition of
DPP-IV reduces hyperglycemia (high blood sugar) in a way that does not cause hypoglycemia
(low blood sugar). Somewhat related to the DPP-IV inhibitors is an injectable product called
exenatide. This drug, derived from the saliva of Gila monsters, increases blood levels of a protein
called glucagon-like peptide (GLP-1), which promotes insulin secretion and limits glucagon secretion.
Increased GLP-1 results in the same effect seen with the DPP-IVs, that is, lowering of blood sugar
only when blood sugar is elevated.
The numerous long-term complications of diabetes often affect organs such as the kidneys and eyes
as well as nerves in the fingers and toes. Called microvascular complications of diabetes because
they result from damage to small blood vessels, these adverse effects can be irreversible. In 2004,
two new drugs, Cymbalta® and LyricaTM, were approved for treating nerve pain (neuropathy)
in patients with diabetes. Ruboxistaurin, a drug being developed to treat kidney (nephropathy)
and/or eye (retinopathy) complications of diabetes, could be approved in 2006.
55
therapy class review
The relatively strong diabetes-drug pipeline reflects changing attitudes in medical treatment of the
disease. Physicians no longer treat diabetes conservatively by trying diet and exercise initially, then
using one or two oral medications for years before finally switching to insulin after oral medications
are no longer effective. New recommendations call for early and aggressive treatment — often initiating
therapy not only with lifestyle changes, but also with more than one type of drug — to bring blood
sugar levels close to normal ranges as rapidly as possible. One reason for this new aggressiveness
is that under-treated patients with diabetes are at greater risk for developing long-term complications.
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ANTIASTHMATICS
RANK 6
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
11.7%
5.1%
1.4%
0.1%
4.7%
1.5%
-1.7%
3.2%
1.5%
TOTAL
PMPY: $32.72
Rx PMPY: 0.44
Prevalence of Use: 7.7%
Average Cost/Rx: $74.96
# Rx/User/Year: 5.61
14.9%
Antiasthmatic drug trend increased 14.9% in 2004, down from a 26.1%
increase in 2003. This dramatic decrease was due primarily to a slower
utilization growth. Utilization-trend growth in 2004 was only 1.5%, which
was significantly less than the 9.9% increase observed in 2003 but similar
to the 2.6% increase in 2002. Most notable was the decrease in prevalence
(10.4% in 2003 versus -1.7% in 2004). A more severe cold/flu season in
2003 could explain this significant shift — at least partially, since asthma and
related respiratory conditions may be aggravated by a cold or the flu. Cost-perprescription trend increases continued to grow at double-digit rates due to
use of more expensive controller products. A new drug, Spiriva®, contributed
1.5% of the overall trend.
Generic products, while still leading the market share for antiasthmatic drugs,
continue their gradual decline, with their 2004 share of 34.5% the lowest seen
in the past five years. Singulair® and Advair Diskus® continue to build market
share, however, with their combined share passing 40% in 2004. This trend
is expected to continue, and generic market share could shrink further now
that the FDA has instituted a ban on chlorofluorocarbon (CFC)-containing
albuterol inhalers. The ban will become effective on Jan. 1, 2009. If CFCcontaining generic albuterol inhalers are replaced with non-CFC brand
products, generic share could quickly slide to less than 20%. In addition,
Spiriva is expected to build market share as its use increases for the treatment
of chronic obstructive pulmonary disease (COPD).
Antiasthmatics Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Generics $21.51
40
Singulair $83.44
30
Advair Diskus $137.89
20
Flovent $82.16
10
Combivent $68.58
0
2000
2001
2002
56 express scripts drug trend report 2004
2003
2004
Pulmicort $154.65
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Antiasthmatics Projected Trend
Cost
Prescriptions
30
26.1
25
22.8
Percent
20
15.1
18.5
18.3
2006
2007
19.5
19.5
2008
2009
16.3
15
10
5
0
2002
2003
2004
2005
Antiasthmatics Pipeline
Brand
AerospanTM
Intal® HFA
Alvesco®
Ariflo®
Daxas®
Foradil® HFA
Symbicort®
Generic
flunisolide HFA
cromolyn sodium
arformoterol
ciclesonide
cilomilast
roflumilast
formoterol
budesonide and formoterol
R411
766994
159797
Proposed Use
Asthma
Asthma
Asthma
Asthma
COPD
Asthma/COPD
Asthma
Asthma
Asthma
Asthma
Asthma/COPD
Availability
2005
2005
2005
2006
2006
2006
2006
2006
2008
2008
2008+
Antiasthmatics Patent Expirations
Brand
Flovent®
Serevent®
Advair®
Generic
fluticasone
salmeterol
fluticasone and salmeterol
Patent Expiration
Expired
Aug. 12, 2008
Aug. 12, 2008
The pipeline for new asthma drugs is unremarkable, but the bigger story for 2005 and beyond
is the phasing out of inhalers that contain ozone-depleting CFCs. Generic albuterol inhalers,
which represent the largest percentage of generic prescriptions in this category, will be off the
market completely by the end of 2008. Patients are unlikely to be affected clinically by a switch
to CFC-free inhalers; but the transition from almost 100% generic utilization back to nearly total
brand usage will have major consequences on PMPY spending in this category.
57
therapy class review
LOOKING AHEAD
As mentioned earlier, the upcoming ban on CFC-containing generic albuterol inhalers likely will have
significant consequences on long-term drug-trend growth in this class. Utilization growth should
also rebound as new drugs are introduced and marketing efforts increase. We expect the 2005
growth of 16.3% to be similar to 2004’s 15.1%, and then growth rates should increase in 2006
and beyond due to the impact of the CFC ban and new product introductions.
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ANTI-RHEUMATICS (NSAIDs)
RANK 7
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
5.1%
6.2%
-0.3%
-0.1%
-0.5%
-0.6%
0.8%
-1.5%
0
TOTAL
PMPY: $28.66
Rx PMPY: 0.43
Prevalence of Use: 12.7%
Average Cost/Rx: $67.04
# Rx/User/Year: 3.38
4.5%
The withdrawal of Vioxx® and the transfer of information on the
injectable rheumatoid arthritis (RA) products from this therapy class
to the specialty section resulted in a dramatic decrease in overall drug
trend — from 22.2% in 2003 to only 4.5% in 2004. The effect of
moving the injectable products can be seen in the cost-per-prescription
trends, with therapeutic mix dropping from 6.8% to -0.5%. Although
Vioxx was not withdrawn until Sept. 30, its removal from the world
market still had a definite impact on utilization growth, which was flat
in 2004, compared with a 5.6% increase in 2003.
In terms of market share, generic NSAIDs continued to lead the class,
growing to just over 50% in 2004. Based on the safety issues associated
with COX-2 inhibitors and effective utilization-management programs,
market share for generics should continue to increase. Among the COX-2s,
Celebrex® remained the market leader in 2004. Following the withdrawal
of Bextra® in 2005, Celebrex is also the lone COX-2 on the U.S. market.
The demand for COX-2s is fading, however, so 2005 will tell a much
different story.
Anti-Rheumatics (NSAIDs) Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
60
Generics $29.92
50
Celebrex $105.32
40
Vioxx $84.79
30
Bextra $92.12
20
Mobic $102.76
10
0
2000
2001
2002
58 express scripts drug trend report 2004
2003
2004
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therapy class review
LOOKING AHEAD
The growth outlook for this therapy class is pessimistic, given the market withdrawal of Bextra,
new FDA safety warnings placed on all NSAIDs and COX-2 inhibitors, and a decrease in direct-toconsumer advertising. Approval for the few COX-2 inhibitors in the pipeline is questionable
at best in the current regulatory environment. We expect a negative trend for 2005 and then
only modest drug-trend growth in the range of 4% to 6% through 2009.
Anti-Rheumatics (NSAIDs) Projected Trend
25
Cost
Prescriptions
22.2
20
Percent
15
11.4
10
4.5
-1.2
4.0
4.0
2004
2005
2006
2007
5
6.1
6.1
2008
2009
0
-5
-10
2002
2003
Anti-Rheumatics (NSAIDs) Pipeline
Brand
Prexige®
ArcoxiaTM
Generic
temsirolimus
milnacipran
lumiracoxib
etoricoxib
Proposed Use
RA
Fibromyalgia
OA/RA/Pain
OA/RA/Pain
Availability
2007
2008
2008
2009
Anti-Rheumatics (NSAIDs) Patent Expirations
Brand
Mobic®
Generic
meloxicam
Patent Expiration
April 13, 2005 (generics in 2006)
The future of COX-2 inhibitor development is in question after the withdrawal of Vioxx® and Bextra.
Arcoxia was expected to be approved in 2004, but safety questions have delayed its entry indefinitely.
No new classes are appearing on the horizon to replace COX-2 inhibitors. Mobic, which gained market
share in the wake of the Vioxx withdrawal, is expected to face generic competition in 2006. The
significant cost-drivers for the treatment of RA will continue to be the injectable products Enbrel®,
HumiraTM, Kineret® and Remicade®. However, the components of trend for these products are no longer
included in the anti-rheumatics (NSAIDs) class. They have been moved into the specialty class.
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ANTICONVULSANTS
RANK 8
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
12.2%
9.7%
-1.9%
-2.2%
6.7%
8.7%
7.6%
1.0%
0
TOTAL
PMPY: $22.94
Rx PMPY: 0.23
Prevalence of Use: 3.1%
Average Cost/Rx: $100.80
# Rx/User/Year: 7.54
21.9%
Drug spend in the anticonvulsants class grew by 21.9% in 2004, down
from 28.9% in 2003. A slowdown in utilization was the main reason
for the overall trend decrease; however, the introduction of the first
Neurontin® generics also played a role. Drug inflation was 9.7%, the
second-highest of the top 25 therapy classes in this Report. Therapeuticmix trend is usually high in this category, and the 6.7% increase in
2004 was no exception, placing it third-highest among the top 25 classes.
Utilization growth slowed to 8.7% in 2004, down from 13.3% in 2003.
Generics remained the market-share leader in 2004, and their share
should rise considerably in 2005 as additional Neurontin market share
moves to generics. Among the brand drugs, both Topamax® and
Lamictal® gained in market share; their average costs per prescription
($182.04 and $220.70, respectively) are approximately twice the cost
per prescription of the class. The market share for Depakote® dropped
in 2004; all other brand products with a cost per prescription of $100
or greater and no generic competition showed market-share increases.
Anticonvulsants Market-Share Trend
40
Generics $35.68
35
Percent of Prescriptions
therapy class review
32916_43-96
Neurontin $136.59
30
25
Topamax $182.04
20
Lamictal $220.70
15
Depakote $116.48
10
Dilantin $25.42
5
0
2000
2001
2002
60 express scripts drug trend report 2004
2003
2004
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Anticonvulsants Projected Trend
35
Prescriptions
33.5
28.9
30
25
Percent
Cost
21.9
20
15.5
15
14.5
13.4
13.4
13.4
2006
2007
2008
2009
10
5
0
2002
2003
2004
2005
Anticonvulsants Pipeline
Brand
Sabril®
Generic
vigabatrin
rufinamide
lacosamide
Proposed Use
Seizures
Seizures
Seizures
Availability
2006
2006
2008
Anticonvulsants Patent Expirations
Brand
Depakote®
Lamictal®
Topamax®
Generic
divalproex sodium
lamotrigine
topiramate
Patent Expiration
July 29, 2008
Jan. 22, 2009
March 26, 2009
A handful of new anticonvulsant drugs are under development. Although they have unique
mechanisms of action for the treatment of epilepsy and other seizure disorders, they likely will
gain initial approval for use as adjunctive therapy for patients who are not adequately controlled
with current therapy. A relatively new drug, LyricaTM (pregabalin), was approved for treating
neuropathic pain in 2004. It should receive approval for epilepsy in 2005. Although a key patent
for Lamictal does not expire until 2009, its manufacturer has made an agreement that allows
generics to enter the market before its scheduled patent-expiration date.
61
therapy class review
LOOKING AHEAD
In 2005, drug trend for anticonvulsants is likely to be lower than it was in 2004, as Neurontin
generics take hold. In 2006 and beyond, cost-per-prescription trends should stay steady. Utilization
growth should also be relatively constant, perhaps slightly higher than in 2004. We project annual
growth leveling off to about 13.4% for 2007 through 2009.
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NARCOTIC ANALGESICS
RANK 9
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
8.5%
7.0%
2.6%
-5.8%
5.0%
3.3%
3.0%
0.3%
0
TOTAL
PMPY: $20.14
Rx PMPY: 0.52
Prevalence of Use: 16.1%
Average Cost/Rx: $38.87
# Rx/User/Year: 3.22
12.1%
Overall drug trend in the narcotic analgesics therapy class was 12.1%
in 2004, down from 24.8% in 2003. A significant decrease in perprescription costs was the primary reason for the overall trend decrease,
although declining utilization also played a role. Therapeutic mix, which
was quite high at 11% in 2003, fell to 5% in 2004, as prescription
switches to the two most expensive products in the class, Duragesic®
and OxyContin®, slowed. Utilization-trend growth slowed to 3.3%,
down from 7.4% in 2003.
Generics dominate the narcotic analgesics class, with a 2004 market
share of 88% and an average cost per prescription of $17.40. To better
show movement among the brand narcotic analgesics, generics have not
been included on the following market-share chart. Among the brands,
OxyContin led in market share; however, one strength of OxyContin
went generic in 2004. With generics to the remaining strengths expected
in 2005, a continued presence of the brand product is in question.
Duragesic also began to experience generic competition in early 2005,
so it will also drop from the charts next year, leaving Ultracet® as the
only brand with a market share greater than 1%.
Narcotic Analgesics Market-Share Trend
8
OxyContin $265.52
7
Percent of Prescriptions
therapy class review
32916_43-96
Ultracet $64.72
6
5
Duragesic $315.64
4
Percocet $96.36
3
Ultram $98.96
2
1
0
2000
2001
2002
62 express scripts drug trend report 2004
2003
2004
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therapy class review
LOOKING AHEAD
With patent expirations for OxyContin and Duragesic and few new products in the pipeline, costper-prescription trends should continue to slow in 2005 and beyond, while utilization growth in
this category should remain steady. We predict an average growth of about 7% through 2009.
Narcotic Analgesics Projected Trend
Cost
Prescriptions
24.7
25
21.9
Percent
20
15
12.1
8.2
10
7.1
6.1
7.1
7.1
2008
2009
5
0
2002
2003
2004
2005
2006
2007
Narcotic Analgesics Pipeline
Brand
Dilaudid-CRTM
OxytrexTM
Generic
hydromorphone
fentanyl lozenge
oxymorphone, extended-release
oxycodone and naltrexone
Proposed Use
Chronic pain
Pain
Moderate-to-severe pain
Moderate-to-severe pain
Availability
2005
2005
2006
2006
Narcotic Analgesics Patent Expirations
Brand
Actiq®
OxyContin®
Generic
fentanyl transmucosal
oxycodone, extended release
Patent Expiration
Feb. 5, 2007
Pending
Generics continue to dominate this therapy class, and products in the pipeline are merely
reformulations of existing products. Two expensive brand products, OxyContin and Duragesic,
both face increased generic competition in 2005. Generics to Duragesic were launched in January,
and a court case to determine the validity of the OxyContin patents should conclude by the middle
of the year. A generic version of the 80mg strength of OxyContin was launched in 2004, ahead
of the court ruling, because the generic company making it decided to launch it at risk. Lower
strengths were not launched at that time because the generic manufacturer that was approved
to release them chose to wait until after legal challenges were resolved.
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DERMATOLOGICALS
RANK 10
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
10.0%
9.0%
3.6%
-5.4%
3.0%
-0.7%
0.4%
-1.1%
0
TOTAL
PMPY: $18.78
Rx PMPY: 0.33
Prevalence of Use: 13.5%
Average Cost/Rx: $57.23
# Rx/User/Year: 2.44
9.2%
Dermatologicals are a relatively stable class from year to year, and 2004 was
no exception. Cost-per-prescription trend growth was 10% in 2004, down
slightly from 10.9% in 2003, while utilization growth was -0.7%, down
from 1.3% in 2003. Inflationary trends tend to be higher in this class than
in many others, and in 2004, the class inflation rate of 9% was the fourthhighest among the top 25 therapy classes. Generics continue to dominate the
class, with their combined market share reaching an all-time high of 52.3%
in 2004. The market share for brand drugs is spread over a large number of
products, with the top product, Elidel®, commanding only a 3.5% market
share, even though its use has grown quickly since it was released in 2002.
Each of the next four largest brands lost market share in 2004.
Recently, the safety of some dermatologicals has been questioned. Accutane®,
a frequently-used drug, has had black-box warnings for years because it causes
birth defects. In 2004, further warnings were added about its potential links
to depression, psychoses and suicidal behavior. Despite these serious side
effects, prescriptions for Accutane and its generics increased by slightly over
4% in 2004 — indicating that for many patients the benefits outweigh the
risks. In March 2005, the FDA issued a Public Health Advisory on potential
cancer risks associated with Elidel® and Protopic®, topicals used to treat
eczema. Prior to the advisory, both drugs were among the fastest-growing
dermatologicals, with 2004 growth rates of 16.1% and 7.6%, respectively.
Although these developments had no impact on 2004 trends, they will
surely be felt in drug trend for dermatologicals in 2005.
Dermatologicals Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
60
30
5
0
2000
2001
2002
64 express scripts drug trend report 2004
2003
2004
Generics $39.46
Elidel $91.86
BenzaClin $90.61
Differin $88.31
Bactroban $44.52
Accutane $556.09
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therapy class review
LOOKING AHEAD
The overall drug trend for dermatologic products shows little change from year to year, due to the
vast number of products in the therapy class and the resulting inability of any single product to
establish significant market share. We expect drug-trend growth to slow in upcoming years and
to hold steady at about 6% from 2007 through 2009.
Dermatologicals Projected Trend
14
Cost
Prescriptions
12.8
12
9.3
10
Percent
8
9.1
7.1
4.7
6.1
6.1
6.1
2007
2008
2009
6
4
2
0
-2
-4
2002
2003
2004
2005
2006
Dermatologicals Pipeline
Brand
Tazoral®
Dimericine®
PsorBan®
Generic
tazarotene oral
SB-275833
T4N5 liposome lotion
MX-594AN
cyclosporine conjugate topical
Proposed Use
Psoriasis
Bacterial skin infections
Xeroderma pigmentosum
Acne
Psoriasis
Availability
2006
2006
2007
2008+
2008+
Dermatologicals Patent Expirations
Brand
Pandel® cream
Apligraf®
Dovonex®
Generic
hydrocortisone probutate
skin substitute
calcipotriene
Patent Expiration
Feb. 26, 2005
May 27, 2006
June 29, 2008
With a multitude of generic and brand products in this therapy class, the impact of any single new
drug is not as noticeable as it might be for other classes. Additionally, many of the newer agents in
this class fall under the specialty-drug benefit and/or carry additional indications, such as treating
rheumatoid arthritis (RA), so their impact may not be noticed in the dermatologicals class. One of
the few new products in development, Tazoral, an oral form of a drug that is already available as
a topical product, was expected on the market in 2004, but safety concerns have delayed it until
at least 2006. Impending patent expirations are expected to have only a limited impact.
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MISCELLANEOUS ENDOCRINES
RANK 11
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
6.0%
7.3%
0
0
-1.2%
8.8%
5.8%
2.8%
0.3%
TOTAL
PMPY: $16.36
Rx PMPY: 0.23
Prevalence of Use: 2.8%
Average Cost/Rx: $70.99
# Rx/User/Year: 8.33
15.7%
After several years of 20%-plus growth, the miscellaneous endocrines therapy
class is showing signs of maturity, and 2004 drug trend slowed significantly.
While cost-per-prescription trends were up slightly, utilization trends decreased
from 21.8% in 2003 to 8.8% in 2004. Part of the slowdown is attributable
to a decrease in prevalence, as the class readjusts from the surge it experienced
when safety concerns were raised with estrogen products in 2002. Many
patients changed from estrogens to miscellaneous endocrines for the
prevention and treatment of osteoporosis. In addition, with the top three
drugs accounting for more than 90% of the market share, small shifts in
their use could affect trend growth more dramatically than in other categories.
The injectable products — such as growth hormones, most infertility drugs
and the osteoporosis drug Forteo® — that were formerly included in this
class are now in the specialty-drug therapy class.
As mentioned, three drugs dominate the class. Fosamax® continues to lead
in market share with just over 50% of total prescriptions — a share that has
remained steady in recent years. A similar product, Actonel®, is the fastestgrowing product in the class, with the majority of its share gains coming
at the expense of Evista®, which has seen market-share declines each year
since 2000. Also used to treat osteoporosis, Evista belongs to a different
subclass (selective estrogen receptor modulators or SERMs) of miscellaneous
endocrines than Fosamax and Actonel, which belong to the bisphosphonates
subclass. Generic market share, at 2.1% in 2004, is unlikely to get a significant
boost until 2008, when the Fosamax patent expires.
Miscellaneous Endocrines Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
60
Fosamax $65.90
Actonel $64.19
Evista $74.67
Miacalcin $78.12
Generics $54.73
40
20
0
2000
2001
2002
66 express scripts drug trend report 2004
2003
2004
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Miscellaneous Endocrines Projected Trend
30
25.6
Cost
Prescriptions
27.1
25
Percent
20
15.7
15.5
15.5
15.5
2004
2005
2006
2007
15
13.4
13.4
2008
2009
10
5
0
2002
2003
Miscellaneous Endocrines Pipeline
Brand
Oporia®
PrestaraTM
Generic
lasofoxifene
prasterone
bazedoxifene
Proposed Use
Osteoporosis
Systemic lupus erythematosus
Osteoporosis
Availability
2005
2005
2006
Miscellaneous Endocrines Patent Expirations
Brand
Geref®
Proscar®
Fosamax®
Skelid®
Generic
sermorelin
finasteride
alendronate
tiludronate
Patent Expiration
June 28, 2005
June 19, 2006
Feb. 6, 2008
July 30, 2010
Two well-established subcategories in this class could face new competition in 2005. First,
the bisphosphonate Boniva® approved in 2004 as a once-daily dosage form, was not competitive
with other products, Fosamax and Actonel, which are dosed once weekly. Additional studies were
conducted, and a new once-monthly dosing schedule for Boniva was approved in early 2005.
Secondly, the SERMs subclass, currently represented only by Evista® on the U.S. market, could
begin to see competition from lasofoxifene and bazedoxifene this year or next. Generics to Fosamax,
which is the leading drug in the class, are now expected in 2008 following an early 2005 court
decision against its manufacturer.
67
therapy class review
LOOKING AHEAD
With trend growth averaging 28% over the past three years, the dramatic drop in 2004 trend makes
the future of this class difficult to predict. The expected addition of several new products in the next
12 months to 24 months should stimulate growth. However, some of the new drugs are similar to
Evista, which is losing market share as physicians migrate toward the more potent bisphosphonates.
Generics will not play a role until 2008. We believe that the class will level off in 2005 and continue
to grow in the range of 15.5% annually until 2007, and then fall slightly.
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ANTIHISTAMINES
RANK 12
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
4.4%
5.0%
0.3%
-0.1%
-0.7%
-5.1%
-0.1%
3.4%
0
TOTAL
PMPY: $16.01
Rx PMPY: 0.29
Prevalence of Use: 7.7%
Average Cost/Rx: $56.03
# Rx/User/Year: 3.71
-0.9%
The antihistamines class rebounded in 2004 to achieve an overall trend
of -0.9%, which seems low but is actually an improvement over the -20.9%
trend observed in 2003. Both cost-per-prescription and utilization trends
were higher in 2004 than in 2003. These increases come as little surprise,
given the market adjustment that occurred in 2003 with the introduction
of OTC Claritin®. Actual utilization growth remained negative, as fewer
patients took prescription antihistamines in 2004 than in 2003.
Therapeutic mix, which was the lowest of the top 25 therapy classes
in 2003 at -10.1%, rebounded to -0.7%, as the removal of Claritin
from inclusion in prescription calculations brought greater price
equilibrium among the remaining products.
Much like the miscellaneous endocrines therapy class, the antihistamines
are dominated by three brands. Allegra®, which continues to be the market
leader, combines with Zyrtec® and Clarinex® for 90% of the market
share in the class. Although it is a small percentage of the overall market,
generic share continued to grow, with the first-generation generic product
promethazine being the primary contributor.
Antihistamines Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Allegra $65.71
40
Zyrtec $53.49
Clarinex $65.65
30
Generics $11.53
20
Claritin $25.79
10
0
2000
2001
2002
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2003
2004
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Antihistamines Projected Trend
40
Cost
Prescriptions
21.2
20
-0.9
-20.9
1.0
6.0
7.0
-46.0
-100.0
0
Percent
-20
-40
-60
-80
-100
-120
2002
2003
2004
2005
2006
2007
2008
2009
Antihistamines Pipeline
Brand
Xyzal®
Generic
levocetirizine
Proposed Use
Allergies
Availability
2007
Antihistamines Patent Expirations
Brand
Allegra®
Clarinex®
Zyrtec®
Generic
fexofenadine
desloratadine
cetirizine
Patent Expiration
Pending
2007 (generics anticipated in 2008)
Dec. 25, 2007
Patent expirations are the only news in the antihistamine class, since new product development
appears essentially stagnant. The one antihistamine in development, Xyzal, is not a truly new
product but a derivative of an existing product, Zyrtec. Whether Xyzal offers clinical benefits
is unclear — it may simply be an extension of the Zyrtec franchise. Legal proceedings to determine
the validity of Allegra’s patents begin in 2005. A loss by its manufacturer would mean that the
introduction for OTC versions of Allegra could be sooner than expected.
69
therapy class review
LOOKING AHEAD
Patent expirations rule the day in the antihistamines therapy class, with each of the leading
drugs facing generics in the next three years. Limited new product introductions, wide availability
of OTC loratadine products and plan-sponsor restrictions on prescription antihistamine use all will
contribute to minimal growth in upcoming years. We forecast growth recovering to the 6% to 7%
range through 2007, then a sharp drop that virtually eliminates the prescription status of the class
as additional OTC products come to market in 2008 and beyond.
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CALCIUM BLOCKERS
RANK 13
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
3.2%
3.7%
-0.4%
-1.4%
1.4%
1.9%
2.7%
-0.8%
0
TOTAL
PMPY: $15.22
Rx PMPY: 0.35
Prevalence of Use: 3.9%
Average Cost/Rx: $43.05
# Rx/User/Year: 8.96
5.2%
The story remains about the same for the calcium blockers therapy class,
as its 2004 trend of 5.2% closely resembles its 2003 trend of 3.7%. The
primary reason for the minor increase is a rise in cost-per-prescription
trend. Inflation, brand/generic mix and therapeutic mix were all slightly
higher in 2004, as well. Utilization also saw a small increase — from
1.7% to 1.9%. Although overall trend for the class has increased a little
in each of the past three years, no new indications or clinical guidelines
are expected that would cause a significant change in prescription growth.
Generics and one brand, Norvasc®, make up 91% of the therapy
class. Norvasc market share grew in 2004 to an all-time high of 47.2%.
Generics grew as well, although at a slower rate than in previous years.
With few brands left in the class, generic market share likely will stay
relatively constant until 2007, when Norvasc generics are expected.
Calcium Blockers Market-Share Trend
Norvasc $51.37
50
Generics $48.79
40
Percent of Prescriptions
therapy class review
32916_43-96
Plendil $48.91
30
Tiazac $57.83
20
10
0
2000
2001
2002
2003
2004
70 express scripts drug trend report 2004
50
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Calcium Blockers Projected Trend
Cost
7
Prescriptions
6.1
6
5.2
5.0
5
3.7
Percent
4
3
1.2
2
2.0
2.0
2008
2009
1.0
1
0
-1
-2
2002
2003
2004
2005
2006
2007
Calcium Blockers Pipeline
Brand
AmvazTM
Generic
amlodipine maleate
lercandipine
Proposed Use
Hypertension
Hypertension
Availability
2007
2008
Calcium Blockers Patent Expirations
Brand
Norvasc®
Lotrel®
Generic
amlodipine
amlodipine and benazepril
Patent Expiration
Jan. 31, 2007
Jan. 31, 2007
No new calcium channel blockers are expected on the market until 2007, when AmVaz, a new
formulation of Norvasc, is expected. The manufacturer of AmVaz tried to enter the market in 2004,
but a court ruling delayed its entry until the Norvasc patent expired. The approval of lercandipine
has been delayed repeatedly due to frequency of dosing and formulation issues. Its earliest
possible availability has been pushed back from 2006 to 2008.
71
therapy class review
LOOKING AHEAD
Current market-share trends will continue until 2007. At that time, almost the entire therapy class
will convert to generics, and trend growth will drop significantly. We expect growth rates to be in the
5% range through 2006, then falling to 1% or 2% from 2007 through 2009.
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BETA BLOCKERS
RANK 14
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
7.1%
3.5%
-0.6%
-0.4%
3.3%
8.5%
8.0%
0.4%
0
TOTAL
PMPY: $15.00
Rx PMPY: 0.57
Prevalence of Use: 6.4%
Average Cost/Rx: $26.31
# Rx/User/Year: 8.89
16.2%
In contrast to calcium blockers, the beta blockers class continues to grow
at a healthy rate. In 2004, the overall drug trend for beta blockers was
16.2%, which was down from 24.7% in 2003 but still greater than the
total PMPY trend. Both cost-per-prescription and utilization trends
decreased in 2004. A drop in inflation trend from 6.8% to 3.5% was the
main reason for the slowdown in cost-per-prescription trend. Utilization
growth was affected by decreases in prevalence and intensity. Beta blockers
remain one of the least expensive therapy classes, with the average cost
per prescription of $26.31 being the second-lowest of the top 25 therapy
classes (oral contraceptives were the lowest).
While a generic, atenolol, still leads the class in market share, generic
drugs are slowly losing ground to brand beta blockers. One brand product,
Toprol XL®, continues to grow each year, with its 2004 market share
of 31% almost double its 1999 share of 17%. Another brand product,
Coreg®, also is growing, although its market share is well under 10%.
The AWP cost per prescription of Coreg is more than three times the
class average.
Beta Blockers Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
atenolol $16.12
40
Topol XL $28.41
30
metoprolol $15.01
20
Coreg $94.81
10
Inderal LA $51.50
0
2000
2001
2002
72 express scripts drug trend report 2004
2003
2004
propranolol $14.75
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Beta Blockers Projected Trend
Cost
Prescriptions
30
27.7
25
19.6
18.8
20
19.9
17.7
Percent
16.2
16.6
15.5
15
10
5
0
2002
2003
2004
2005
2006
2007
2008
2009
Beta Blockers Pipeline
Brand
Generic
nebivolol
Proposed Use
Hypertension
Availability
2005
Beta Blockers Patent Expirations
Brand
Coreg®
Toprol XL®
Generic
carvedilol
metoprolol, extended release
Patent Expiration
Sept. 5, 2007
In litigation
The beta blockers class has been mature for several years, with utilization mostly from generic
products. One new product, nebivolol, is expected on the market in 2005 for the treatment
of hypertension. However, the long-term value of nebivolol may be for congestive heart failure,
because its slightly different mechanism of action and limited brand-name competition
may improve its market penetration. The exact timing of generic competition for Toprol XL
is unclear due to litigation issues.
73
therapy class review
LOOKING AHEAD
Beta blockers’ place in national treatment guidelines appears secure, and with the prevalence
of hypertension increasing, we expect solid growth to continue at least through 2007, when generics
to Coreg could have a modest effect. We project trend increases in the range of 18% to 20% through
2007, then slowing slightly to 15.5% by 2009.
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ANTIVIRALS
RANK 15
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
19.7%
10.4%
-1.7%
-0.2%
10.5%
-2.6%
-15.3%
15.0%
0
TOTAL
PMPY: $14.17
Rx PMPY: 0.07
Prevalence of Use: 2.0%
Average Cost/Rx: $205.18
# Rx/User/Year: 3.39
16.5%
The antiviral therapy class contains drugs that treat herpes, hepatitis,
HIV and influenza. In 2004, overall drug-trend growth for antivirals was
16.5%, up from 11.6% in 2003. Cost-per-prescription trends drove the
trend increase, with inflation rising 10.4% (versus 6.5% in 2003) and
therapeutic mix increasing 10.5% (versus -7.1%). One reason for higher
inflation was a 17% increase in the AWP per prescription for the leading
drug, Valtrex®. Therapeutic mix increased due to lower use of the less
expensive flu drug, Tamiflu®. The influenza outbreak in 2003, and the
resulting increase in Tamiflu use, did not repeat itself in 2004. Decreased
use of Tamiflu was also partly responsible for the decrease in utilization
seen among the antivirals in 2004. The prevalence and intensity rates
are almost a mirror opposite of 2003, which saw a 22.9% increase
in prevalence and an 8.3% decrease in intensity.
Valtrex, which is used to treat herpes infection, gained market share in 2004,
while the leading generic product, acyclovir, held steady. Together, these two
products command almost two-thirds of all prescriptions in the class. Among
the remaining products, Famvir® continues to lose market share each year,
while Viread® took over as the leading HIV drug. The impact of Tamiflu
in 2003 and 2004 is also illustrated on the graph below. A significant AWP
per-prescription price differential remains among products in this class, with
generic acyclovir and Tamiflu on the lower end in the $50 to $60 range,
and selected HIV drugs on the high end at over $600.
Antivirals Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
40
30
20
10
0
2000
2001
2002
74 express scripts drug trend report 2004
2003
2004
Valtrex $124.36
acyclovir $49.77
Famvir $157.18
Viread $412.29
Sustiva $412.90
Tamiflu $64.33
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Antivirals Projected Trend
50
Cost
Prescriptions
43.6
40
Percent
30
16.5
20
11.6
10
8.2
8.2
8.2
8.2
8.2
2005
2006
2007
2008
2009
0
-10
2002
2003
2004
Antivirals Pipeline
Brand
Aptivus®
Generic
tipranavir
capravirine
telbivudine
UK-427,857
Viramidine®
873140 (ONO-4128)
Proposed Use
HIV
HIV
Hepatitis B
HIV
Hepatitis C
HIV
Availability
2005
2007
2007
2007
2008
2008
Antivirals Patent Expirations
Brand
Retrovir®
Zerit®
Valtrex®
Trizivir®
Combivir®
Epivir®
Generic
zidovudine
stavudine
valacyclovir
abacavir, lamivudine and zidovudine
lamivudine and zidovudine
lamivudine
Patent Expiration
March 17, 2006
Dec. 24, 2008
Dec. 23, 2009
May 17, 2010
May 17, 2010
May 17, 2010
The HIV-drug pipeline is currently between cycles. Approved drugs are meeting the need for the
majority of patients, and new drugs with different mechanisms of action are a few years away.
Drugs in the short-term pipeline work similarly to existing therapies. In a sign of market maturity,
the first generic antiretroviral, didanosine (for Videx® EC), became available in 2004. Several
other generics are expected in the next few years. Hepatitis C treatment also appears stable in
the near term, with Viramidine, an oral product similar to ribavirin, the closest to market. Several
antiviral vaccines for conditions such as herpes zoster (the cause of shingles), rotavirus (which
results in diarrhea among infants), and human papilloma virus (a precursor to cervical cancer)
are also in development.
75
therapy class review
LOOKING AHEAD
The severity of the flu season seems to be the most influential factor on trend growth in this
category. Since flu severity is impossible to predict, guidance on trend for the drugs used to treat
flu is difficult. Trend growth for the other types of antiviral drugs (for herpes, hepatitis and HIV)
is not likely to be affected significantly by new drugs or patent expirations in the coming years.
On average, we expect trend growth to be 8.2% through 2009.
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ANTIPSYCHOTICS
RANK 16
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
11.0%
6.7%
-1.7%
-0.7%
6.6%
8.0%
4.7%
3.1%
0
TOTAL
PMPY: $11.89
Rx PMPY: 0.08
Prevalence of Use: 1.3%
Average Cost/Rx: $150.62
# Rx/User/Year: 5.92
19.8%
Like the trends seen in many other classes, overall trend for antipsychotics
dropped in 2004. The 2004 trend of 19.8% was a full 9% lower than
the 2003 trend of 28.8%. Therapeutic mix, usually the leading driver
of trend for this class, slowed in 2004, as the use of less expensive brands
and generics grew. The 2004 therapeutic-mix gain of 6.6% was half that
seen in 2003. The decrease in therapeutic mix could be a sign that the
newer, atypical antipsychotics have fully penetrated the category, and
that future shifts in mix will be among the newer products and not the
older ones. Utilization growth for 2004 was similar to 2003.
Seroquel® overtook Risperdal® for the brand market-share lead in
2004, while Zyprexa® slipped from second to third. The newest brand
product, Abilify®, doubled its market share. With an AWP of over $335
per prescription, Abilify is also the most expensive atypical antipsychotic.
The atypical antipsychotics represent approximately 70% of total market
share. Generic use in the class increased in 2004 due to the transition
of lithium brands to generics.
Antipsychotics Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Generics $21.80
40
Seroquel $158.61
Risperdal $167.25
30
Zyprexa $265.58
20
Abilify $336.46
10
Geodon $250.21
0
2000
2001
2002
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2003
2004
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Antipsychotics Projected Trend
30
26.9
Cost
Prescriptions
28.8
25
19.8
Percent
20
18.8
18.8
18.8
18.8
15.6
15
10
5
0
2002
2003
2004
2005
2006
2007
2008
2009
Antipsychotics Pipeline
Brand
Generic
asenapine
bifeprunox
osanetant
Proposed Use
Schizophrenia
Schizophrenia
Schizophrenia
Availability
2007
2007
2008+
Antipsychotics Patent Expirations
Brand
Geodon®
Risperdal®
Abilify®
Generic
ziprasidone
risperidone
aripiprazole
Patent Expiration
Sept. 2, 2007
June 29, 2008
April 20, 2010
While the past decade has seen the approval of several atypical antipsychotics that appear
to affect more receptors than older antipsychotics, the difficulty in treating patients with
psychoses lends itself to as many drug choices as possible. Recognizing that the treatment
of psychoses may require multiple drugs, as well as frequent adjustments in drug dosage
and/or combinations, pharmaceutical manufacturers continue to develop new compounds.
New antipsychotics may be particularly effective in combination with existing drugs or for
specific patient populations. The antipsychotics that are probably next in line for approval
are asenapine and bifeprunox, which are both potentially available as soon as 2007. Further
from the market is osanetant, which affects the brain’s neurokinin receptors, rather than
dopamine and/or serotonin receptors like most currently-marketed antipsychotics. Whether
osanetant’s difference is clinically meaningful has yet to be determined. Generics for Risperdal
should have a noticeable impact on the class in 2008. Conversely, legal challenges to the Zyprexa
patents, which expire in 2011, cloud the timing of generics for that widely-used product. Although
one of the key patents on Geodon expires in 2007, it is likely to receive a patent-term extension.
77
therapy class review
LOOKING AHEAD
If therapeutic-mix trends continue at their current pace, overall drug-trend growth among
antipsychotics may be lower than previously predicted. However, if the newer products, such
as Abilify, begin to take share from less-expensive products, such as Seroquel, therapeutic mix
could rise again. A newly-required warning that antipsychotics could be associated with serious
side effects may limit their use in conditions such as dementia. Several new products are expected
on the market in the next few years, however, and expanded indications for the existing products
will also keep trend levels high. Little generic pressure is expected until 2008. We project an
annual trend increase of approximately 18.8% through 2008, then a slight slowdown in 2009
to reflect the entry of generics to Risperdal.
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STIMULANTS/ANTI-OBESITY
RANK 17
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
15.8%
9.3%
1.0%
-0.8%
5.7%
16.4%
12.8%
3.2%
0
TOTAL
PMPY: $11.82
Rx PMPY: 0.13
Prevalence of Use: 1.9%
Average Cost/Rx: $94.08
# Rx/User/Year: 6.76
34.8%
This therapy class contains drugs for attention-deficit/hyperactivity
disorder (ADHD), narcolepsy and obesity. Following a remarkable
42.2% overall trend increase in 2003, the stimulant/anti-obesity class
recorded another impressive gain of 34.8% in 2004. Utilization growth
led the way, with a 16.4% increase in 2004, compared with 3.1% in
2003. Most of the utilization growth was due to an increase in prevalence.
A relatively new ADHD drug, Strattera®, is largely responsible for the
increase in PMPY spending in this class. Among the other types of drugs
in the class, Provigil® is the leading drug for narcolepsy, with an average
cost per prescription about double that of the ADHD therapies. Antiobesity drugs are not a meaningful contributor to trend in this class.
The top three brand drugs, all for ADHD, comprise 60% of total prescriptions in this class. Concerta® remains the class market-share leader,
although its share decreased slightly in 2004. Strattera has achieved a 16%
market share after only two years on the market. At $117.56, Strattera’s
cost per prescription is approximately 20% higher than the other brand
products. The impact of generics continues to decline, dropping from
40% in 2000 to 24% in 2004. Generic share should rebound in 2005
and 2006, however, as the two leading products face generic competition.
Stimulants Anti-Obesity Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Generics $36.77
40
Concerta $96.61
30
Adderall XR $99.69
20
Strattera $117.56
10
Provigil $225.14
Metadate CD $91.17
0
2000
2001
2002
78 express scripts drug trend report 2004
2003
2004
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therapy class review
LOOKING AHEAD
Future growth should continue at a similar pace to 2004, as newer products for narcolepsy and
obesity offset the generics expected for the ADHD drugs. We are forecasting that growth will creep
down from 31.1% in 2005 to 20.9% in 2008 and 2009.
Percent
Stimulants/Anti-Obesity Projected Trend
45
40
35
30
25
20
15
10
5
0
Cost
Prescriptions
42.2
36.7
34.8
31.1
28.8
24.3
2002
2003
2004
2005
2006
2007
20.9
20.9
2008
2009
Stimulants/Anti-Obesity Pipeline
Brand
Focalin XRTM
AcompliaTM
NuvigilTM
MethyPatch®
Axokine®
Generic
dexmethylphenidate,
extended release
rimonabant
armodafinil
SPD503
methylphenidate patch
modified ciliary neurotrophic factor (CNTF)
ABT-089
ATL-962
PYY3-36
Proposed Use
ADHD
Availability
2005
Obesity
Narcolepsy
ADHD
ADHD
Obesity
ADHD
Obesity
Obesity
2006
2006
2006
2006
2007
2007+
2008
2008+
Stimulants/Anti-Obesity Patent Expirations
Brand
Concerta®
Adderall XR®
Provigil®
Meridia®
Xenical®
Generic
methylphenidate, modified release
amphetamine salts, extended release
modafinil
sibutramine
orlistat
Patent Expiration
In litigation
In litigation
June 24, 2006
Dec. 11, 2007
Dec. 18, 2009
This therapy class includes drugs for several conditions, including ADHD, narcolepsy and obesity.
Among agents for ADHD, generics for the popular drug, Concerta, could become available in 2005 ,
and the one remaining brand in the Adderall® franchise could lose exclusivity in 2006. In narcolepsy
treatment, Provigil has gained momentum in recent years, and its manufacturer hopes that negative
effects of its 2006 patent expiration will be mitigated by the introduction of a new product, Nuvigil.
Clinically similar to Provigil, Nuvigil has a longer duration of action. Nuvigil’s patent is not expected
to expire until 2008.
The third subcategory of this class may be the one to watch. Spurred by publicity about a global
obesity epidemic, research on obesity drugs is intensifying at several pharmaceutical manufacturers.
A number of new anti-obesity drugs could be launched in the next five years. The first significant push
is likely to be in 2006 with the expected approval of Acomplia. Clinical trial data for Acomplia is
intriguing — the drug may suppress the desire to smoke and improve blood sugar and blood lipid
levels, in addition to limiting appetite. However, its ultimate success depends on the willingness
of plan sponsors to cover a drug approved initially for obesity and smoking cessation. Its manufacturer
is also seeking an additional indication for delaying the development of type 2 diabetes.
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ORAL CONTRACEPTIVES
RANK 18
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
-3.0%
8.2%
0
-14.5%
4.8%
0.3%
0.1%
0.2%
0
TOTAL
PMPY: $11.25
Rx PMPY: 0.46
Prevalence of Use: 5.6%
Average Cost/Rx: $24.58
# Rx/User/Year: 8.17
-2.7%
The oral contraceptive class experienced the full impact of generic
competition in 2004, as trend growth fell significantly from a 15.1%
increase in 2003 to a 2.7% decrease in 2004. Brand/generic mix, which
measures the impact of new generics, dropped by 14.5%, causing cost-perprescription trends to be negative, as well. This significant change in mix
was driven by new generics to Ortho Tri-Cyclen®, which had been the
leading brand product in the class. Utilization growth, which was essentially
flat in 2004, also contributed to the decrease in trend. The average cost
per prescription continues to decline for oral contraceptives, with the
2004 cost of $24.58 the lowest average cost in the top 25 classes.
The introduction of generics for Ortho Tri-Cyclen resulted in generics
capturing the majority of market share for the first time in 2004.
However, several brands continued to grow their market shares, despite
the generic competition. Ortho Evra®, the first contraceptive patch, and
Ortho Tri-Cyclen® Lo, a lower-dose oral product, are from the same
manufacturer as Ortho Tri-Cyclen. Their market-share gains partially
offset Ortho Tri-Cyclen’s loss to generics. Yasmin®, which contains a unique
progestin that also mimics the action of the diuretic spironolactone,
was also among the few brands showing increased use.
Oral Contraceptives Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
Generics $23.73
70
60
50
40
30
20
10
0
Ortho Evra $35.54
Ortho Tri-Cyclen Lo $35.26
Ortho Tri-Cyclen $33.42
Ortho-Novum $33.16
2000
2001
2002
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2004
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therapy class review
LOOKING AHEAD
With many different contraceptives available as generics, future trend growth will be tied to
changes in utilization, rather than cost per prescription. Changes in benefit design could also
play a role. After a negative trend of nearly 3% in 2004, we project stable growth of 9.2% from
2005 through 2009.
Oral Contraceptives Projected Trend
Cost
Prescriptions
25
19.6
20
15.1
Percent
15
10
9.2
9.2
9.2
9.2
9.2
2005
2006
2007
2008
2009
5
-2.7
0
-5
2002
2003
2004
Oral Contraceptives Pipeline
Brand
Yaz®
SeasoniqueTM
Seasonale® Lo
Totelle®
Generic
ethinyl estradiol and drospirenone
ethinyl estradiol and levonorgestrel
ethinyl estradiol and levonorgestrel
male contraceptive
tanaproget (NSP-989)
ethinyl estradiol and trimegestone
Proposed Use
Contraception
Contraception, extended-cycle
Contraception, extended-cycle
Contraception
Contraception
Contraception
Availability
2005
2005
2006
2007
2007
2008
The approval of the first extended-cycle oral contraceptive, Seasonale, and its popularity
among users have prompted its manufacturer to study additional extended-cycle formulations.
Seasonale Lo has a lower dose of both the estrogen and the progestin that it contains, and
another formulation (Seasonique) contains seven low-dose estrogen tablets instead of placebo
tablets, which are in the original Seasonale formulation. A reformulation of the already-marketed
contraceptive Yasmin, Yaz contains lower doses of the estrogen. With the full impact of generics
for Ortho Tri-Cyclen felt in 2004, generic products now represent a majority of prescriptions in
this therapy class. Despite delays in FDA authorization for a prescription-to-OTC switch, Plan B®,
an emergency contraceptive, is expected to go OTC in 2005.
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MISCELLANEOUS HEMATOLOGICALS
RANK 19
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
9.6%
7.6%
0.2%
-0.2%
1.9%
25.8%
18.5%
6.2%
0
TOTAL
PMPY: $10.88
Rx PMPY: 0.1
Prevalence of Use: 1.2%
Average Cost/Rx: $113.13
# Rx/User/Year: 8.09
38.0%
Miscellaneous hematologicals is new to the 2004 Drug Trend Report.
It contains anti-platelet drugs, which work to prevent blood clots from
forming. Typically not given as general preventive therapy, anti-platelet
drugs usually are prescribed for patients who have had a cardiovascular
or a peripheral vascular event. The class leapfrogged to 19th place over
several well-established classes due to its significant drug-trend growth
of 38% in 2004. While the cost-per-prescription trends were generally
unremarkable, the utilization increase of 25.8% was the highest of the
top 25 therapy classes. Because the class is dominated by one drug,
Plavix®, an increase in the use of Plavix is likely to result in similar
increases for the class.
With Plavix capturing over 80% of market share, little is left to discuss
about the remaining products in the class. The second-place brand, Pletal®,
is not a competitor for Plavix. Instead, it is used to treat peripheral vascular
disease. The first generic to Pletal was launched in 2004. Aggrenox®,
a combination of two older drugs (aspirin and extended-release dipyridamole),
competes with Plavix, but its side effects limit its use. Generic market
share has decreased in recent years — now representing only 8.1% of
the prescriptions in the class. Additional market-share losses for generics
are expected in the future as more brand products are in position
to enter this market.
Miscellaneous Hematologicals Market-Share Trend
100
Percent of Prescriptions
therapy class review
32916_43-96
Plavix $117.04
80
Generics $49.79
60
Pletal $96.24
40
Aggrenox $110.70
20
Trental $52.54
0
2000
2001
2002
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Miscellaneous Hematologicals Projected Trend
Cost
Prescriptions
70
59.1
60
Percent
50
42.2
38.0
40
28.7
30
23.2
18.8
20
16.6
16.6
2008
2009
10
0
2002
2003
2004
2005
2006
2007
Miscellaneous Hematologicals Pipeline
Brand
ExantaTM
Generic
ximelagetran
Bay 59-7939
prasugrel
razaxaban
odiparcil
BIBR-1048
AZD-0837
AZD-6140 (AR-C126532)
YM-150
Proposed Use
Anticoagulant
Antithrombotic
Anticoagulant
Anticoagulant
Anticoagulant
Antithrombotic
Antithrombotic
Antithrombotic
Antithrombotic
Availability
2006?
2008
2008
2008
2008+
2008+
2008+
2008+
2008+
Miscellaneous Hematologicals Patent Expirations
Brand
Plavix®
Generic
clopidogrel
Patent Expiration
2012 — Challenge pending
Several products are under investigation for use as oral anticoagulants, but they are years
away from reaching the market if development continues as planned. Exanta, the most-advanced
product in clinical development, hit a roadblock after clinical trials revealed its potential for
increased liver toxicity, which may outweigh its possible benefits. As a result, an FDA advisory
committee recommended against its approval in September 2004. On the patent front, the
largest-selling oral product in this category, Plavix, is facing patent challenges from several
generic manufacturers. Although the strength of later patents for Plavix has yet to be determined
in court, generics are not likely to reach the market until 2012.
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LOOKING AHEAD
Because 2004 is the first year that miscellaneous hematologicals has been in the top 25 therapy
classes, we have no history for forecasting its future growth. Even though last year’s utilization
growth seems high, an aging population that has multiple risk factors for heart disease should
stimulate continued growth in the class. New brand products and limited generic competition will
also keep cost trends high. We predict annual growth to slow as the market matures, however,
gradually falling from 38% in 2004 to 16.6% by 2008.
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DECONGESTANTS
RANK 20
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
7.1%
8.0%
-0.7%
-0.3%
0.1%
1.5%
-1.3%
2.9%
0
TOTAL
PMPY: $10.74
Rx PMPY: 0.17
Prevalence of Use: 5.8%
Average Cost/Rx: $61.83
# Rx/User/Year: 2.97
8.8%
The decongestants class includes mainly nasally-administered products,
mostly steroids. The overall drug trend of 8.8% in 2004 is down from
15.9% in 2003. Decreased utilization — specifically a decrease in the
prevalence of use — was responsible for the lower trend. Lower utilization
could also be a reflection of changing market dynamics in the larger
class of all respiratory agents. In 2003, decongestants benefited from
the introduction of OTC Claritin and the subsequent restrictions
placed on prescription antihistamines.
In this relatively small category, the top five products represent 95% of the
total market share. Flonase® continues to be the leading product, with its
use growing slightly in 2004. Generics to Flonase are possible in 2005 or
2006. The remaining products show few market-share changes from year
to year. Unlike most other members of the class, Astelin®, with a 5.9%
share in 2004, is not a nasal steroid but a nasal antihistamine.
Decongestants Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Flonase $60.97
40
Nasonex $66.50
Nasacort AQ $63.60
30
Rhinocort Aqua $63.77
20
Astelin $33.47
10
0
2000
2001
2002
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Decongestants Projected Trend
20
Cost
Prescriptions
17.4
15.9
Percent
15
8.8
10
7.1
5
4.0
4.0
2006
2007
5.1
5.1
2008
2009
0
2002
2003
2004
2005
Decongestants Pipeline
Brand
®
Allermist
Generic
loteprednol nasal
685698 nasal
Proposed Use
Allergic rhinitis
Allergic rhinitis
Availability
2006
2007
Decongestants Patent Expirations
Brand
Flonase®
Generic
fluticasone nasal
Patent Expiration
Expired (generics in 2005 or 2006)
Nasally-administered steroids are the primary products in this therapy class. Because the leading
product, Flonase, probably will face generic competition in 2005, recent cost-trend gains from this
class should slow. The pipeline offers no new drugs that appear better than currently-available
products. Furthermore, the manufacturer of at least one prescription decongestant could apply
for OTC status in the next few years.
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therapy class review
LOOKING AHEAD
The patent for Flonase was set to expire in May 2004, but last-minute action by the manufacturer
pushed the earliest possible generic entry into 2005 or 2006. If and when generics to Flonase
appear, cost-per-prescription trends should decrease for the class. While a generic for Flonase
is unlikely to have a significant impact on utilization growth, the end of direct-to-consumer
advertising for Flonase when it goes generic may curtail new prescriptions for the whole class.
We predict Flonase generics will have an impact on 2006 trend and beyond. Therefore, we forecast
annual growth will drop into the 4% to 5% range from 2006 through 2009.
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ANTINEOPLASTICS
RANK 21
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
10.8%
3.7%
0.8%
-4.0%
10.4%
8.4%
5.9%
2.3%
0.2%
TOTAL
PMPY: $10.15
Rx PMPY: 0.06
Prevalence of Use: 0.8%
Average Cost/Rx: $171.02
# Rx/User/Year: 7.17
20.3%
The antineoplastics, one of the broadest drug categories represented
in this Report, also carry a high average cost per prescription. In 2004,
overall trend increased to 20.3%, up from 15.2% in 2003. Cost-perprescription increases were the primary cause of the increase, particularly
in therapeutic mix. New oral drugs, such as Gleevec® and Temodar®
carry a substantially higher price than the rest of the class. Gleevec, for
example, is approximately $2,500 per prescription. Even though the
combined market share for these products is less than 3%, their dramatic
cost differences drove up therapeutic mix in 2004. Utilization-trend
increases were similar in 2003 and 2004.
The two leading products in the category, methotrexate and tamoxifen,
both generics, are also two of the lowest-cost products. Methotrexate
is widely used for rheumatoid arthritis (RA) in addition to treating
a variety of cancers. Arimidex® and Femara®, newer drugs that are
replacing tamoxifen for some breast cancer patients, each gained share.
Tamoxifen’s share is likely to decrease further in the coming years.
No other products had greater than a 5% market share in the class.
Antineoplastics Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
35
methotrexate $45.35
30
tamoxifen $62.54
25
Arimidex $209.41
20
Femara $214.38
15
mercaptopurine $69.56
10
5
0
2000
2001
2002
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Antineoplastics Projected Trend
25
Prescriptions
24.4
20.3
20
Percent
Cost
15.2
15
16.6
16.6
16.6
16.6
16.6
2005
2006
2007
2008
2009
10
5
0
2002
2003
2004
Antineoplastics Pipeline
Brand
DacogenTM
Zarnestra®
XinlayTM
RevlimidTM (formerly RevimidTM)
Sutent®
OrathecinTM
TelcytaTM
AffinitakTM
Generic
decitabine
tipifarnib
atrasentan
lenalidomide (CC-5013)
nelarabine
SU-11248
sorafenib (BAY-43-9006)
lapatinib (GW572016)
satraplatin
tirapazamine
rubitecan
ixabepilone
TLK286
ISIS 3521
vatalanib
temsirolimus (CCI-779)
edotecarin
AMG 706
Proposed Use
Myelodysplastic syndromes
RAS-dependent tumors
Prostate cancer
Multiple myeloma
Leukemia/Lymphoma
GI stromal tumors/Renal cell carcinoma
Renal cell carcinoma
Solid tumors
Prostate cancer
Non-small cell lung cancer
Pancreatic cancer
Breast cancer/ Prostate cancer
Ovarian cancer
Non-small cell lung cancer
Metastatic colorectal cancer
Renal cell carcinoma/Breast cancer
Glioblastoma
GI stromal tumors
Availability
2005
2005
2005
2005
2005
2006
2006
2006
2007
2007
2006
2006
2006
2006
2007
2007
2007
2008
Antineoplastics Patent Expirations
Brand
Doxil®
Camptosar®
Casodex®
Arimidex®
Gemzar®
Hycamtin®
Generic
doxorubicin liposome injection
irinotecan
bicalutamide
anastrozol
gemcitabine
topotecan
Patent Expiration
June 28, 2006
Feb. 20, 2008
Oct. 1, 2008
June 27, 2010
Nov. 15, 2010
Nov. 28, 2010
Cancer-drug research has become a leading focus for several pharmaceutical and biotechnology
companies. Many new compounds are in development, including some that could alter the course
of the disease significantly. In the near future, cancer may be regarded as a chronic disease, similar
to RA or HIV. Like other chronic conditions, certain cancers may soon be kept at bay for years by
regular treatments with chemotherapy or biologic agents. In addition, factors such as limited generic
exposure and relative ease of reimbursement from plan sponsors make antineoplastics one of the
few classes that promise long-term financial viability for the pharmaceutical industry. New drugs
are likely to be available in the next few years for several cancers, such as renal cell carcinoma,
glioblastoma and non-small cell lung cancer, which currently have limited treatment options.
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therapy class review
LOOKING AHEAD
The oncology field contains some of the most promising drugs in the pipeline, with potential treatments
for many different kinds of cancer in various stages of development. With new drugs come higher costs,
however. As evident in 2004, even a small market share for a new product can have a noticeable
impact on overall trend in this class. Generic exposure is limited in coming years. As stated previously,
tamoxifen share may decrease over time as newer products replace it. We project annual trend increases
in the range of 16.6% for the next five years.
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MIGRAINE PRODUCTS
RANK 22
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
5.4%
6.4%
-0.4%
-0.2%
-0.4%
2.8%
2.3%
0.5%
0
TOTAL
PMPY: $8.73
Rx PMPY: 0.06
Prevalence of Use: 1.5%
Average Cost/Rx: $139.19
# Rx/User/Year: 4.16
8.4%
Few changes were observed in the migraine category in 2004, although
the overall trend of 8.4% was slightly higher than the 6.2% increase seen
in 2003. An increase in utilization was responsible for the overall-trend
increase, but the utilization trend of 2.8% was still well below the average
for all therapy classes. Drugs in this category are in large part well
established, with little generic competition.
Although Imitrex®, the first of the triptan drugs to be approved, continues
to lead in market share, its lead shrank a bit in 2004. Depakote® ER,
which is not a triptan but a drug for migraine prevention, gained share,
as did the newest triptan, Relpax®. The rest of the triptans showed little
change in 2004. Additionally, as mentioned above, generics are not
a factor in this class, representing only 11% of total prescriptions.
Migraine Products Market-Share Trend
Percent of Prescriptions
therapy class review
32916_43-96
50
Imitrex $179.40
40
Depakote ER $111.86
Zomig $145.54
30
Generics $12.89
20
Maxalt $152.45
10
0
Relpax $126.69
2000
2001
2002
2003
2004
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40
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therapy class review
LOOKING AHEAD
The upcoming patent expiration for Imitrex will certainly affect cost-per-prescription trends,
but this impact is not expected until 2008. We expect below-average growth trends to continue
at 7.1% through 2007, and then drop to 5.1% in 2008, when Imitrex generics become available.
Migraine Products Projected Trend
20
Cost
Prescriptions
17.4
Percent
16
12
8.4
8
7.1
6.2
7.1
7.1
5.1
5.1
2008
2009
4
0
2002
2003
2004
2005
2006
2007
Migraine Products Pipeline
Brand
MT-100TM
MT-400TM
Generic
metoclopramide and naproxen
sumatriptan and naproxen
Proposed Use
Acute migraine
Acute migraine
Availability
2006
2006
Migraine Products Patent Expirations
Brand
Imitrex®
Generic
sumatriptan
Patent Expiration
June 28, 2007
New drug development in this therapy class is limited, because the several members of the
triptan family of drugs already on the market are effective for the majority of people with migraine
symptoms. The only products in the migraine pipeline, MT-100 and MT-400, are both combinations
of currently-approved drugs. Partly due to concerns about possible side effects, MT-100 was found
“not approvable” by the FDA in May 2004. Its manufacturer plans to resubmit, however. Imitrex,
the first triptan approved by the FDA, is facing generic competition in 2007. Whether all or only
some of the dosage forms of Imitrex will lose patent protection at that time is not yet clear.
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OPHTHALMIC PRODUCTS
RANK 23
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
10.4%
7.7%
-0.9%
-1.3%
4.8%
3.2%
-0.3%
3.5%
0.6%
TOTAL
PMPY: $8.55
Rx PMPY: 0.19
Prevalence of Use: 6.5%
Average Cost/Rx: $46.05
# Rx/User/Year: 2.86
14.6%
The ophthalmic category is new to this year’s Drug Trend Report. Drugs
in this class are primarily used for glaucoma, eye infections and ophthalmic
symptoms of allergies. As expected, a wide range of drugs is available
to treat eye conditions, and only one ophthalmic product had a market
share of greater than 10%. At 14.6%, however, the overall trend for
ophthalmic products is higher than the trend observed for all classes.
Cost-per-prescription trends were driven by inflation and therapeuticmix increases that were higher than average. While utilization trends
were unremarkable, one new drug, ElestatTM, an ophthalmic antihistamine
that was released during 2004, contributed 0.6% to overall trend.
Because the ophthalmic class is so diverse, market-share shifts are more
difficult to achieve. Xalatan®, a glaucoma drug that has led the class for the
past few years, increased its market share slightly. CosoptTM, a combination
drug for glaucoma, also showed modest gains. Another leading brand
glaucoma medication, Alphagan® P, saw its market share decrease slightly
in 2004 due to competition from newer products. The leading prescription
ophthalmic antihistamine, Patanol®, has seen its use level off as more
antihistamines for the eyes move OTC.
Ophthalmic Products Market-Share Trend
Generics $13.50
40
35
Percent of Prescriptions
therapy class review
32916_43-96
Xalatan $52.48
30
Patanol $74.00
25
20
Cosopt $71.94
15
Alphagan P $67.07
10
5
TobraDex $58.32
0
2000
2001
2002
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2004
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LOOKING AHEAD
This is the first time that we are forecasting ophthalmic-drug growth. Because the class includes
so many products with so many different uses, the impact of any single product, brand or generic,
is limited. We expect trend growth in this category to mirror overall trend growth closely in the
coming years — returning to 11.2% after a slight rise in 2006.
Ophthalmic Products Projected Trend
Cost
Prescriptions
25
19.8
Percent
20
15
14.7
12.4
11.2
12.3
11.2
11.2
11.2
2007
2008
2009
10
5
0
2002
2003
2004
2005
2006
Ophthalmic Products Pipeline
Brand
Xalcom®
Alphagan® Z
ExtravanTM
AzaSiteTM
Generic
latanoprost and timolol
brimonidine
bimatoprost and timolol
travoprost and timolol
azithromycin
dexamethasone and moxifloxacin
Proposed Use
Glaucoma
Glaucoma
Glaucoma
Glaucoma
Conjunctivitis
Anti-inflammatory/Anti-infective
Availability
2005
2005
2005
2005
2006
2007
Ophthalmic Products Patent Expirations
Brand
Alphagan® P
Livostin®
Emadine®
Alocril®
Trusopt®
Zymar®
Vexol®
Acular®
Generic
brimonidine
levocabastine
emedastine
nedocromil
dorzolamide
gatifloxacin
rimexolone
ketorolac tromethamine
Patent Expiration
In litigation
June 7, 2005
Feb. 14, 2006
April 2, 2007
Oct. 28, 2008
June 25, 2008
Jan. 22, 2009
Nov. 5, 2009
Development of new products in this category is dominated by combinations of currently-available
products — usually a prostaglandin with a beta blocker — for the treatment of glaucoma. Since
most patents for the prostaglandin eye drops are protected for some time, this strategy probably
is not intended to extend their patent lives. It demonstrates, instead, the need for combination
therapy to better control glaucoma. Although many ophthalmic products are scheduled to lose
patent protection over the next few years, equivalent formulation and stability issues may limit
the number of generic competitors. The FDA generally requires manufacturers of ophthalmic
products to follow production standards that are more stringent than those for other drug
manufacturers. In addition, liquid products, such as ophthalmic suspensions and solutions,
often can be more difficult to develop and produce than solid oral dosage forms.
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QUINOLONES
RANK 24
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
-4.4%
5.4%
-1.0%
-9.1%
0.7%
-3.6%
-0.4%
-3.2%
0.1%
TOTAL
PMPY: $8.53
Rx PMPY: 0.11
Prevalence of Use: 7.0%
Average Cost/Rx: $79.23
# Rx/User/Year: 1.53
-7.8%
Quinolones, which are antibiotics used primarily for respiratory and
urinary tract infections, saw an overall trend decrease of 7.8% in 2004,
down from a positive trend of 15.4% in 2003. Both cost-per-prescription
and utilization trends were down. The decrease in cost-per-prescription
trends is largely attributable to the introduction of generics to Cipro® in
mid-2003. Greater use of Cipro’s generic equivalents affected both inflation
and brand/generic-mix trends. Utilization growth was also negative,
most likely due to the less severe flu season in 2004. While quinolones
are not used to treat flu directly, they are often used to treat bacterial
infections sometimes associated with flu.
Levaquin® continues to be the market leader, but its market-share
growth plateaued in 2004. Generic ciprofloxacin, which was the first
generic in the category, showed the greatest gain in share. Avelox®, which
is marketed by the same company that marketed Cipro, saw its market
share increase, mostly at the expense of a rival product, Tequin®, which
has decreased in share each year since 2001.
Quinolones Market-Share Trend
Percent of Prescriptions
therapy class review
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50
Levaquin $90.97
40
Generics $50.16
Avelox $83.76
30
Cipro $77.74
20
Tequin $78.01
10
0
Floxin $92.80
2000
2001
2002
92 express scripts drug trend report 2004
2003
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Quinolones Projected Trend
Cost
Prescriptions
20
15.4
15
10
8.8
6.9
6.9
6.9
6.9
Percent
4.9
5
-7.8
0
-5
-10
2002
2003
2004
2005
2006
2007
2008
2009
Quinolones Pipeline
Brand
Generic
prulifloxacin
garenoxacin
sitafloxacin (IV only)
Proposed Use
CAP*/Sinusitis
CAP/Sinusitis
Drug-resistant infections
Availability
2006
2006
2006
*Community-acquired pneumonia
Quinolones Patent Expirations
Brand
Maxaquin®
Tequin®
Avelox®
Zagam®
Generic
lomefloxacin
gatifloxacin
moxifloxacin
sparfloxacin
Patent Expiration
Aug. 21, 2006
Dec. 25, 2007
Dec. 30, 2009
Aug. 4, 2010
Barring unexpected clinical data that prove otherwise, drugs in the quinolone pipeline have limited
commercial potential, since generics to Cipro are already on the market. Additional patent expirations
will dent the market share for branded quinolones even further in the next five to six years. The
patent for Levaquin, the current market leader, is not expected to expire until December 2010.
However, if litigation concerning possible patent infringement goes in favor of the generic
manufacturer, generics for Levaquin could enter the market well before 2011.
93
therapy class review
LOOKING AHEAD
Little growth is expected for quinolones, since the therapy class is maturing. The next major patent
expiration, for Levaquin, is not due until 2009, when we expect trend to fall below 5%. Until then,
we project growth to be about 7% — slightly less than the average trend growth for all classes.
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MACROLIDES
RANK 25
COMPONENTS OF TREND
Cost per Prescription
Inflation
Units per Prescription
Brand/Generic Mix
Therapeutic Mix
Utilization
Prevalence
Intensity
New Drugs
KEY FACTS
5.9%
6.5%
0.8%
0
-1.4%
-12.2%
-8.6%
-4.0%
0
TOTAL
PMPY: $8.19
Rx PMPY: 0.18
Prevalence of Use: 12.3%
Average Cost/Rx: $46.07
# Rx/User/Year: 1.45
-7.1%
This is probably the final year that the macrolides will be among the
top 25 classes in the Drug Trend Report, because generic introductions
are likely to decrease 2005 PMPY costs significantly. In 2004, drug-trend
growth was negative. Much like the quinolones, the macrolides suffered
from a milder flu season in 2004; however, macrolide utilization was
affected to a greater degree, with a decrease of 12.2% in utilization
trend. At 5.9%, cost-per-prescription trends in 2004 were similar
to those in 2003.
Biaxin® and Zithromax®, which represent 84% of 2004 market share,
are both expected to lose patent protection in 2005. Whether or not
Biaxin® XL preserves its brand status, it is expected to lose more ground
because at least some Biaxin XL prescriptions are likely to be converted
to Biaxin generics. Market share for Biaxin XL declined slightly in 2004.
Erythromycin products are not a meaningful market-share contributor.
Macrolides Market-Share Trend
80
Zithromax $42.75
70
Biaxin XL $78.90
60
Percent of Prescriptions
therapy class review
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50
Biaxin $84.07
40
Generics $5.07
30
20
10
0
2000
2001
2002
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therapy class review
LOOKING AHEAD
While we expect utilization trends to bounce back to nearly 4% in 2005, overall trend for
the macrolides is not expected to out pace the market. In 2006, when generics for Biaxin
and Zithromax are on the market, expect trend to drop under 1%, remaining at that level
in 2007 and beyond.
Macrolides Projected Trend
20
Cost
Prescriptions
17.1
15
10
-7.1
4.8
3.9
Percent
5
0.9
0.9
0.9
0.9
2006
2007
2008
2009
0
-5
-10
-15
-20
2002
2003
2004
2005
Macrolides Pipeline
Brand
Zithromax® SR
Generic
azithromycin, sustained release
azithromycin and chloroquine
Proposed Use
Bacterial infections
Drug-resistant malaria
Availability
2005
2006
Macrolides Patent Expirations
Brand
Biaxin®
Zithromax®
Generic
clarithromycin
azithromycin
Patent Expiration
May 23, 2005
Nov. 1, 2005
Generics to immediate-release Biaxin are expected in May 2005; but generics to the extendedrelease formulation, Biaxin® XL, may not be launched until later because the XL formulation
may carry additional patents. Although generic competition for the market leader, Zithromax,
is expected in November, its manufacturer hopes to blunt the impact of generics by launching
a sustained-release formulation, Zithromax SR, before the 2005-2006 respiratory infection
season. For most infections, Zithromax is taken for one, three or five days. Zithromax SR
is designed for a one-time dose; however, its other potential clinical benefits are unclear.
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Notes
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Express Scripts Drug Trend Report 2004
PHARMACY BENEFIT GUIDE
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Formulary Development:
The Essential Element of Trend Management
The first two editions of the Pharmacy Benefit Guide described the
essential role of formulary development. It is still true that a welldesigned formulary optimizes a plan sponsor’s ability to provide the
most valuable clinical benefits at the least cost. When coupled with
effective benefit tools, such as a three-tier copayment, the formulary
helps guide the ways that physicians prescribe and the ways that
members use their benefits. Over time, formulary decisions will
have a tremendous impact on a plan’s long-term cost.
Express Scripts uses Generic Product Identifier (GPI) codes maintained
by the Facts and Comparisons division of Wolters Kluwer Health
to analyze the clinical value and cost of individual drugs. Currently,
the list comprises 99 therapy classes of drugs with comparable
effectiveness against certain diseases.
Each of these therapy classes is further divided into subclasses of drugs
with similar chemical structure and activity. For example, subclasses of
anti-ulcer drugs include histamine-2 receptor agonists and proton pump
inhibitors. After each drug is evaluated for relative safety, toxicity, patient
convenience and overall cost, the most cost-effective agents are selected
for formulary inclusion.
Express Scripts continues to use four steps to select the formulary
drugs for each therapy class:
1. Assess Clinical Benefit
Through careful analysis of published literature, drugs in each
therapy class are ranked according to the relative ability of each agent
to achieve the goal of therapy. Side-effect profiles, potential toxicities
and drug interactions are used to distinguish among the agents.
The Express Scripts National Pharmacy and Therapeutics (P&T)
Committee, an independent group of practicing physicians who are not
employed by Express Scripts, makes the final decision on which drugs
should be included on the formulary. P&T Committee members do
not take cost into account when determining clinical benefit.
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2. Consider Cost
Because prescription drugs within a therapy class usually have
different average wholesale price (AWP) costs, those cost differences
are considered for formulary selection when drugs are equal in benefit.
Lower-cost drugs are selected only when their clinical benefits for a
substantial group of patients have been established as equal to or better
than other agents in the class. Formulary drugs may actually be higher
in cost than other drugs in the class when their clinical benefits are
superior to the lower-cost drugs.
3. Account for Market Share
A drug’s market share is important for two reasons. Eliminating
a widely-used drug (one with a high market share, for example)
from the formulary may create unacceptable levels of disruption for
patients, physicians and participating (retail) pharmacies. In addition,
market-share considerations may have a significant impact on total
costs for the therapy class. For instance, if drugs with high negotiated
discounts are made nonformulary in favor of potentially lower-cost
drugs that have little market share, costs for the therapy class may
actually increase, depending on the market-share movement.
4. Account for Market Dynamics Over an Extended Time Frame
Patent expirations and expected introductions of new drugs within
a class can have a significant impact. A heavily-prescribed but more
expensive brand drug that will lose patent protection relatively soon may
stay on formulary to make rapid conversion easier once genericallyequivalent products are introduced. Such conversions have little
potential for member and physician disruption. See the Therapy
Class Review section of this Report for our forecasting on how
market dynamics likely will affect the top 25 therapy classes
over the next five years.
For a complete description of the Express Scripts formulary
development process, refer to: http://www.express-scripts.com/
ourcompany/news/formularyinformation/development/formulary
Development.pdf.
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IS THERE ONLY ONE FORMULARY?
Since no one formulary can meet the needs of all plan sponsors,
Express Scripts builds its formularies on a class-by-class basis. Using
a priority approach based on the contribution of each class to total drug
spend, Express Scripts consults with each plan sponsor to analyze its
members’ prescription utilization patterns. The result is a cost-effective
formulary that meets the needs of the plan.
Exhibits 20 and 21 show how a plan sponsor can select a few, most
or all prescription drugs within a class for its formulary. First, each
drug is rated based on its relative clinical benefit and cost.
Exhibit 20
Clinical Benefit vs Cost
HI
Relative Clinical Benefit
Drug A
Drug B
Drug C
Drug D
Drug E
Drug F
LO
$0
20
40
60
80
100
120
Cost of 30-Day Supply (AWP)
140
160
180
A plan can take a passive approach and include all drugs on formulary.
In an active formulary approach, a plan includes many but not all
drugs on the formulary (in this example, drugs A through D would
be formulary). A plan that takes a low-cost approach covers the generics
and lowest-cost brands that meet clinical needs, which would include
Drugs D and A in the example shown in Exhibit 21.
Exhibit 21
Clinical Benefit vs Cost
Low Cost (Two drugs on formulary)
HI
Relative Clinical Benefit
INCREASING
COST-EFFECTIVENESS
Active (Four drugs
on formulary)
Passive (All drugs
on formulary)
LO
$0
20
40
60
80
100
120
Cost of 30-Day Supply (AWP)
140
160
180
99
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IMPLICATIONS
• Formularies are developed by determining clinical value, considering
cost, and analyzing market share and market dynamics. Express Scripts
uses this effective method for building formularies that meet the
needs of varying plan-sponsor populations.
• These formulary-building steps allow Express Scripts to develop
multiple formularies that help plan sponsors balance the goals of
maximizing cost-savings opportunities and minimizing member,
prescriber and dispenser disruption.
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GenericsWorkSM: NEW LEARNINGS
RESULTS: LOW TRENDS WITHOUT COST-SHIFTING TO MEMBERS
What’s not to like about a formulary program that can hold annual trend growth
below 5% — without shifting costs to members or negatively affecting member
health? And what client wouldn’t be interested in potential savings of $25 million
(per 100,000 lives) in the first three years of the program?
GenericsWork demonstrates that waste can be taken out of the system. GenericsWork
is a complete package of clinical tools built around the Express Scripts High
Performance Formulary (HPF), a comprehensive formulary focused on generics.
About 25% of the drugs on the HPF are low-cost brands. Designed to ease member
and physician transition to a mostly-generic formulary, GenericsWork includes:
• Copayment guidelines
• Grandfathering (exempting members on existing drug regimens from new
requirements that may affect their therapy)
• Step therapy with automated prior authorization and RapidResponse letters
• Zero Dollar Copay waiver, a member-friendly solution that encourages members
to shift appropriate drug utilization from higher-cost brand drugs to lower-cost
generic drugs. Drug benefits are not changed, but generic copayments are
waived for a short time for specific drug classes.
GenericsWork comes with a comprehensive communication package that includes
information for both patients and clients. For patients, educational materials may
be distributed as letters, in interactive voice response (IVR) messages or through
online programs such as Express PreviewSM.
GenericsWork helps plan sponsors achieve and maintain low per member per month
(PMPM) prescription-drug trend. Some clients using the HPF actually are seeing negative
trends. At the end of 2004, ingredient costs for plan sponsors using the HPF averaged
54% of those seen for clients with three-tier benefits.
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Some plan sponsors use the CoreRx product for a more gradual application
of the GenericsWork concept. CoreRx allows proactive management
of therapy classes that contain brands expected to go generic or OTC
in the near term by locking out me-too drugs and higher-cost brands
with low market share. Clients using CoreRx choose which classes
to target. CoreRx then funnels utilization in these drug classes to OTCs,
generics and low-cost brands. The result is a step-by-step process that
results in a high-performing formulary.
More than 5 million Express Scripts members are now in plans using
CoreRx. On average, the generic fill rate for plan sponsors using CoreRx
is five percentage points higher than our three-tier clients.
Exhibit 22
PMPM Ingredient Cost Spend Express Scripts Book of Business 2004
$
65
60
Three-Tier
55
50
CoreRx
45
40
HPF
35
30
25
20
Jan
Feb
March
Apr
May
Jun
Jul
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Oct
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The key reason for the negative trend that results from using the
HPF is the generic fill rate (Exhibit 23).
Exhibit 23
Generic Fill Rate Express Scripts Book of Business 2004
65
HPF
60
CoreRx
Percent
55
50
Three-Tier
45
40
35
Jan
Feb
March
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Savings opportunities from increased use of generic drugs have never
been greater. Moreover, the opportunities are expected to continue
through 2010 as more than $55 billion in brand drugs are scheduled
to lose patent protection over the next six years.24
The savings from generic use accrue to both plan sponsors and members.
On average, a generic drug costs approximately $45 less than a brand
drug, and each 1% increase in generic fill rate is estimated to decrease
pharmacy spend by nearly 1%. Members also pay a lower copayment
for a generic, saving an average of $10 per prescription compared
with brands.25
24
25
Express Scripts analysis of information from Drug Topics, J.P. Morgan Securities, Inc. Industry Update. Prescription Pad
and manufacturer press releases. Express Scripts, Inc. February 25, 2005.
Geographic variations in generic fill rate. Express Scripts. No date given. Available at: http://www.expressscripts.com/
ourcompany/news/outcomesresearch/onlinepublications/regionalgenericvariation/regionalgenericvariation.pdf. Accessed
February 28, 2005.
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Geographic Variation in Generic Fill Rate: NEW LEARNINGS
To better understand variations in generic fill rate, Express Scripts researchers
analyzed generic fill rate by state for a random sample of approximately 3 million
commercially-insured members during 2003.26
KEY STUDY FINDINGS
• The generic fill rate ranged from a low of 39.5% in New Jersey
to a high of 51.3% in Massachusetts.
• The extent of generic-drug use varied 1.3-fold across states.
• The variation in generic use exceeded the variation in overall
prescription-drug use.
Possible explanations for the variations include the differing use of cost-sharing
and other clinical programs that encourage greater use of generics. For example,
the generic fill rate was highest for Massachusetts, where Express Scripts clients
have been aggressive in adopting low generic copayments, using step therapy
and physician consultation programs, and locking out me-too drugs. Mandatory
generic substitution laws do not appear to be a key driver of geographic variation.
The generic fill rate for states with such laws mirrors that of states without such
laws (45% and 45.3%, respectively).
IMPLICATIONS
Significant variations in the use of generic medications exist across states, even
greater variation than that seen previously for overall prevalence of prescription
use (Exhibit 24). These findings suggest that opportunities exist to achieve greater
savings through adoption of programs designed to increase generic use in states
with lower generic fill rates.
Exhibit 24
2003 Age-Gender Adjusted Fill Rate
39.5%-41.8%
41.9%-44.2%
44.3%-46.5%
46.6%-48.9%
49.0%-51.3%
26
Geographic variations in generic fill rate. Express Scripts. No date given. Available at: http://www.expressscripts.com/
ourcompany/news/outcomesresearch/onlinepublications/regionalgenericvariation/regionalgenericvariation.pdf.
Accessed February 28, 2005.
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While formularies are the cornerstone of pharmacy-benefit design, the
strategies that best control trend incorporate a variety of programs — all
aimed at improving generic penetration. Likewise, a strategic trend plan
should be a multi-year process of funneling utilization to over-thecounter (OTC) drugs (usually not included in the prescription-drug
benefit), generics and low-cost brands.
ENLIST A VARIETY OF TREND INTERVENTIONS
It’s time to debunk the old adage that benefits and plan designs can only
be changed every few years. Well-managed clients continually add to and
fine-tune their strategies to bring continuing trends into the single digits.
A typical, well-managed client:
• Develops a strategic communication plan using Express Scripts tools —
including a variety from our Web site, www.express-scripts.com.
• Adopts a three-tier benefit design that uses Generics Preferred, our
mandatory generic policy. Every dollar spent on brand drugs that
have an equivalent generic is a dollar that could be spent on other
important therapies (cancer drugs, for example). Employees expect
a fair drug benefit, not an excessive one.
• Implements between one and three step-therapy programs yearly.
Our average step-therapy client has seven step-therapy programs
in place. Now in effect for about 35% of Express Scripts members,
step therapy promotes the use of lower-cost generics before stepping
up treatment to more-costly brand drugs.
• Consolidates the volume of drugs going generic or OTC by putting
the brakes on potential brand competitors (me-too drugs, for example)
with the Express Scripts CoreRx product. CoreRx targets therapy
classes to lock out nonformulary drugs, focusing on those classes
with brands that have generics and/or OTCs on the near horizon.
The result is a more incisive approach — a step-by-step process
that results in a high-performing formulary.
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Principles for Plan Design
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• More than 5 million Express Scripts members are now in plans
using CoreRx. On average, the generic fill rate for clients using
CoreRx is five percentage points higher than our three-tier clients.
• Incorporates member-friendly strategies — such as the Zero Dollar
Copay program, grandfathering and RapidResponse — in the
mix of programs.
COMMUNICATE, COMMUNICATE, COMMUNICATE
A plan sponsor can have the richest of drug benefits, but if member
communication is not part of that plan’s strategy, members will not
appreciate the generosity of the plan. Watson Wyatt found that employers
with rich benefits but poor communications had turnover rates five
percentage points higher than employers that combined less-costly
benefits with good, continuous communication. The combination
of good benefits and good communications resulted in a further
drop in turnover.27
In the face of sometimes staggering promotional spending by pharmaceutical manufacturers for brand drugs, one consistent message is needed
around generic drugs. Express Scripts designs formulary notifications
to deliver this message to members:
Generics and OTCs are safe, cost-effective alternatives.
WHAT IS A FORMULARY NOTIFICATION?
Formulary notifications are a practical and effective strategy to increase
formulary adherence when drugs are being moved to a nonformulary
status. Targeted letters alert members to future changes and encourage
them to participate in drug-therapy decisions.
Express Scripts formulary-notification letters:
• Explain the change in formulary status
• List alternative drugs, including generics and OTCs
• Identify the out-of-pocket implications of not switching to an
OTC, generic or formulary brand
27
Communication plays critical role in improving retention power of health benefits. [Press release] Watson Wyatt Worldwide;
February 23, 2005. Available at: http://www.watsonwyatt.com/news/press.asp?ID=14303. Accessed March 24, 2005.
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Member Communications: NEW LEARNINGS
In late 2003, Express Scripts conducted a pilot with a large, Midwestern health
plan to answer the question, “Do formulary-notification letters impact members’
selections of drugs?”
The plan was changing formulary status for 30 maintenance drugs. Express Scripts
researchers randomized plan members who were using a three-tier formulary and
receiving any of the affected drugs to either an intervention group or a control group.
Members who had at least one claim for a targeted drug between September and
November 2003 were followed for the first five months of 2004 to determine whether
they switched to a formulary alternative or called an Express Scripts Patient Care
Contact Center. Proportions of patients changing to a formulary alternative were
determined. Multivariate regression modeling was performed to adjust for baseline
differences between the study groups.
KEY STUDY FINDINGS
• Members who received the letter were 1.4 times more likely to switch to a formulary
alternative than those who did not get a letter. Among those with a claim:
n
n
36.3% of those with a letter switched to a formulary alternative
21.8% of members who did not receive a letter switched to a
formulary alternative
• Home-delivery users who received a letter were twice as likely to switch to a formulary
alternative as home-delivery users in the control group.
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The Express Scripts member Web site includes information about specific
savings that members may realize by using generics. Price Check, our
online price-comparison tool, gives members information to help them
convert to generics. Our Web site also offers a “For Your Physician Visit”
tool that provides materials that members can complete and use to
discuss generics during their next office visit.
Not surprisingly, doctors need communications, too. According to the
results of one study, more than 65% of physicians responding to a survey
were not even aware of the general price range for 50 commonlyprescribed medications. The prices of brand drugs were underestimated
almost 90% of the time, and generic-drug prices were overestimated
more than 90% of the time.28
Recently, another physician survey was conducted online by the
American Association of Retired Persons (AARP). Weekly visits from
representatives of brand pharmaceutical manufacturers were reported
by 80% of the respondents. Ninety-six percent of the physicians who
answered the AARP survey said that pharmaceutical representatives
had given them brand-drug samples. Despite the pressure to prescribe
brands, the pendulum appears to be swinging in favor of generics.
In the AARP survey, 69% of the participating physicians reported
that patients asked for generics frequently or sometimes.29
• In the Express Scripts Physician Consultation program, clinical
pharmacists update physicians on the latest generic opportunities
and treatment guidelines. When surveyed for comments, the
majority (94%) of prescribers who consulted with an Express Scripts
clinical pharmacist said they found the information useful in their
practice, and 93% were interested in meeting with the clinical
pharmacist again. Physician Consultation is used by some of our
clients to support their physician-incentive programs.
28
29
Ernst ME, Kelly MW, Hoehns JD, et al. Prescription medication costs: a study of physician familiarity. Archives of Family
Medicine. 2000;9(10):1002-1007.
Barrett LL. Physicians’ attitudes and practices regarding generic drugs. AARP Knowledge Management. March 2005.
Available at: http://assets.aarp.org/rgcenter/health/phys_generic.pdf. Accessed April 8, 2005.
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COST SHARING
Overall, plan sponsors should develop a trend strategy that gives members
confidence that they will continue to be able to afford maintenance
drugs. Surveys indicate that members do not yet have that confidence.
In fact, 26% of employees worry that they will not be able to afford
the prescriptions they need.31
Express Scripts recommends that plan sponsors set overall member
financial contributions between 20% and 35% of drug-ingredient cost.
As shown in Exhibit 25, average copayments for members using our
two-tier, three-tier and CoreRx formularies are well within those guidelines. However, plan sponsors should consider annual caps on member
payments (member stop-loss) to protect the sickest patients from very
high out-of-pocket spending.
Exhibit 25
Average Copayment per Prescription Express Scripts Book of Business 2004
$
18
17
CoreRx
16
15
14
Three-Tier
13
12
Two-Tier
11
10
9
8
30
31
Jan
Feb
March
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Barrett LL. Physicians’ attitudes and practices regarding generic drugs. AARP Knowledge Management. March 2005.
Available at: http://assets.aarp.org/rgcenter/health/phys_generic.pdf. Accessed April 8, 2005.
Employer health benefits 2003 survey. Kaiser Family Foundation and the Health Education and Research Trust.
September 9, 2004. Available at: http://www.kff.org/insurance/ehbs2003-1-set.cfm. Accessed February 8, 2005.
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• Express Scripts is committed to providing doctors with information
that supports the appropriate use of generics. Communications appear
to have a major impact on physician-prescribing behavior. In the
AARP survey, 84% of physicians acknowledged being encouraged
frequently or sometimes by pharmacy benefit managers (PBMs)
to prescribe generics.30
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EMERGING PLAN DESIGNS
Highly-publicized prescription-drug withdrawals due to side effects not
recognized during the drug’s development have focused attention on
safety issues. The recent caution on new drugs could also be applied
to some of the new plan designs currently being promoted. Before
clients bite, they should consider all aspects of the proposed plan
design, including whether the new design really lowers the cost of drug
therapy, creates adverse selection or merely shifts costs to the member.
Exhibit 26
Member Impact of Plan Design and Trend Programs
Higher
High Performance Formulary
Express Choice
Cost-Effective Use
pharmacy benefit guide
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SM
Reference Pricing
Four-Tier
Three-Tier
Defined Contribution
High Deductible
Two-Tier
Reverse Copayment
Lower
Lower
Higher
Member Risk and Cost-Shift Potential
Reference Pricing. The plan sponsor pays only the cost of the lowestprice drug (the reference drug) in a therapy class; the member pays the
full difference between the cost of the reference drug and the ingredient
cost of any higher-priced drug prescribed.
High Deductible. Copayment benefits are designed for members
to assume annual deductibles of $1,000 or more.
Reverse Copayment. The plan sponsor defines an amount it pays for
each tier; the member pays the difference between the ingredient cost
and the plan contribution.
Defined Contribution. The plan agrees to pay a limited annual amount.
Ingredient costs above the plan-stipulated annual contribution are borne
by the member.
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Generally, point-of-service (POS) programs are the most effective
and most efficient way to optimize prescription utilization because they
are based on financial incentives, occur at the time the prescription is
dispensed and usually do not require additional resources to implement.
Accordingly, plan sponsors should ensure that they have taken advantage
of all POS programs before implementing retrospective programs, which
typically involve more effort and less savings. The following section
examines key POS programs, including:
• Generic Policy
• Prior Authorization
• Step Therapy
• Quantity Limits
GENERIC POLICY
For a generic drug to receive an “A” rating from the U.S. Food and
Drug Administration (FDA), it must have the same efficacy, safety
and purity profile as its brand-name equivalent. Given the typical
$39 ingredient-cost difference across the Express Scripts book of
business between multisource brands (brands with a generic equivalent
available) and their generic counterparts, promoting the use of generics
represents an important trend-management tool.
Generics Preferred is Express Scripts’ mandatory-generic plan design. It
requires a member to pay the price difference between a brand and
generic if the member chooses to get a brand medication when an FDAapproved generic equivalent is available. The rationale behind this
approach is that the generic is an FDA-approved equivalent to the
brand; thus the plan sponsor has no clinical reason to pay for the more
expensive brand medication. Clients can also implement a restricted
generic policy (Generics Preferred-Physician’s Choice) in which the
member does not have to pay the price difference between the brand and
generic when the physician issues a dispense-as-written order.
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DO CONSUMERS TRUST GENERICS?
A study by AARP in the fall of 2002 found that 95% of survey respondents are familiar
with generics. Of those, most (65%) think there is no difference between generics and
brand-name prescription drugs.32
Exhibit 27
Type of Generic Policy: Express Scripts Clients Fourth Quarter 2004
Generics Preferred,
Physician s Choice
None (Voluntary)
33.9%
47.8%
18.3%
Generics Preferred
PRIOR AUTHORIZATION
With a prior authorization (PA) program, approval from the plan
sponsor (or its agent) is required before the drug is covered. Typically,
approval is contingent upon one of the following:
• A relevant clinical characteristic or risk factor that makes the
drug medically necessary
• Documentation of a specific diagnosis (such as hypopituitarism
for growth hormone)
• Participation in a wellness program (such as educational and
exercise classes for anti-obesity medications)
32
Barrett LL. Prescription drug use among persons age 45+: a chart book. AARP Knowledge Management. June 2002.
Available at: http://research.aarp.org/il/rx_charts.html. Accessed February 28, 2005.
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The cost-effectiveness of PA for prescription drugs has been questioned.33
For such programs to be cost-effective, the cost of the program to the
plan sponsor must be less than the resulting drug savings. One way
to help achieve cost-effectiveness for PA is to automate approval criteria
when appropriate. Defining medical conditions by well-established
drug markers can help automate the approval process through online
adjudication. During prescription adjudication, the system checks the
patient’s claims history for specific medications. If one of the drug markers
is found in the drug profile, the claim is paid. Automated assessment for
age limits or gender-specific drugs is also common. The following NEW
LEARNINGS section describes an automated PA.
Exhibit 28
Drugs Commonly Placed on Prior Authorization
Alpha-1 Antitrypsin Replacement
Antifungals
Botulinum Toxin
Diabetic Foot Ulcer Medication
Epilepsy Medications (Frequently Used Off-Label for Pain or Migraines)
Growth Hormone
Injectable Arthritis Drugs
Injectable Asthma Treatment
Injectable Osteoporosis Treatment
Narcolepsy Drugs
Psoriasis Treatments
Red Blood Cell Enhancers
Topical Tretinoin and Tazarotene
33
Reissman D. What is the real cost of prior authorization? Drug Benefit Trends. 2000;12(10):22, 24.
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PA is often used to manage the dispensing of drugs that are relatively
expensive and that also may have a significant potential for inappropriate
use. Simply being high-cost is not sufficient reason to place a drug
on PA. However, PA can be used to limit coverage of drugs to those
patients for whom no alternative drug is appropriate, while disallowing
coverage for patients for whom other, less-expensive treatments are
suitable. Clinical reasons may also affect a drug’s PA status. For example,
a drug that requires close monitoring because of potentially serious side
effects could be placed on PA to facilitate the monitoring.
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Automated PA for Erectile Dysfunction: NEW LEARNINGS
An Express Scripts study published in the International Journal of Impotence Research
reported that use of Viagra® (sildenafil) was growing fastest among younger men.34
Between 1998 and 2002, the number of men under the age of 46 who received a
prescription for Viagra increased as much as threefold. Recently, new medications for
treating erectile dysfunction (ED) — Cialis® and Levitra® — entered the marketplace.
To limit inappropriate use while still assuring that essential prescriptions were filled
and member disruption was minimal, Express Scripts developed an automated PA
program to identify drug markers that cause erectile dysfunction. Examples of
medications that cause erectile dysfunction include drugs that treat depression,
prostate hypertrophy and Parkinson’s disease.
In reviewing results for plan sponsors that have adopted various types of management
strategies for ED drugs, we compared four strategies:
• No program
• Limiting the quantity dispensed to six tablets per prescription
• Limiting the quantity dispensed to six tablets per 30 days
• Automated PA with a quantity limit of six tablets per prescription35
RESULTS
The automated PA combined with a per-prescription quantity limit produced the greatest
savings at $0.61 PMPM. Somewhat lower was a quantity limit per 30 days at $0.28
PMPM, followed by a quantity limit per prescription at $0.23. The slightly higher PMPM
savings for a quantity limit per 30 days was due to the small number of members who
obtained more than two fills within a 30-day period. A member’s ability to circumvent
quantity limits that are based on a specified number of days depends upon what the
pharmacist enters for days’ supply — given that drugs for ED are often dosed on an
as-needed basis.
Exhibit 29
PMPM Client Savings From Automated Prior Authorization
$
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Quantity Limit
Per Prescription
34
35
Quantity Limit
,
Per Day s Supply
Automated Prior Authorization
With Quantity Limit
Delate T, Simmons VA, Motheral BR. Patterns of use of sildenafil among commercially insured adults in the United States:
1998-2002. International Journal of Impotence Research. 2004;16(4):313-318.
Trend management strategies for management of erectile dysfunction therapy. Express Scripts. No date given. Unpublished.
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What Is Step Therapy?
Step therapy is designed to encourage use of therapeutically-equivalent,
lower-cost alternatives (first-line therapy) before stepping up to more
expensive therapy (second-line therapy). Administered at the point of
service, step therapy involves real-time checks of the member’s prescriptionclaims history for prior use of a first-line agent, as well as for previous use
of brand agents (a practice known as grandfathering). In both of these
instances, a plan automatically will provide coverage for the brand agent.
A study published in Health Affairs analyzed data from the 2000 Medicare
Current Beneficiary Survey for enrollees aged 65 years old and older
who participated in fee-for-service plans.36 The study concluded that
increasing risk of gastrointestinal problems is associated with greater
odds of being prescribed a cyclooxygenase 2 inhibitor (COX-2). However,
it also found that generous drug coverage has a much larger impact. All
else being equal, patients with the most generous insurance coverage had
more than double the chance of getting COX-2s compared with those
having no third-party coverage. If a step-therapy program had been in
place for COX-2s, their use could have been channeled more appropriately
in both clinically-sound and cost-effective ways.
Exhibit 30
How Step Therapy Works
If history is present,
claim pays
System checks
for history of
first-step drug(s)
Doctor and patient visit
Rx written
RPh
PBM
If no history,
claim rejects
Prior authorization required. Call MD. Must try first-step drug first.
36
Doshi JA, Brandt N, Stuart B. The impact of drug coverage on COX-2 inhibitor use in Medicare. Health Affairs.
Web Exclusive. February 18, 2004. Available at: http://content.healthaffairs.org/webexclusives/index.dtl?year=2004.
Accessed February 25, 2005.
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STEP THERAPY
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In early 2005, 27% of employers surveyed had either implemented
step therapy or were adopting it for one or more therapy classes.
An additional 38% were considering step-therapy programs for their
employees.37 From December 2002 to January 2005, the number
of members enrolled in a plan with at least one step-therapy program
grew from 4.5 million to 13.2 million at Express Scripts. Additionally,
the average number of step-therapy modules per client using step-therapy
programs increased from 2.5 to 7.2 modules (Exhibit 31).
Exhibit 31
Members Enrolled in Plans With Step Therapy
15
12
Average Number of
Step-Therapy Modules
9
6
Members
(In Millions)
3
0
December 2002
January 2005
The growth in step-therapy programs is being fueled by the growing
number of therapeutically-equivalent treatment alternatives available for
many health conditions. However, it is important to point out that having
a less expensive generic product in the therapy class does not automatically
make a drug category an appropriate candidate for step therapy. The
first-line drug must be therapeutically equivalent to second-line drugs.
Therapy classes that are candidates for a step-therapy program are
shown in Exhibit 32.
37
Employer health care expectations. Future strategy and direction – 2005. Hewitt Associates. November 17, 2004.
Available at: http://was4.hewitt.com/hewitt/resource/spkrsconf/subspkrsconf/teleconferences/tapes/11-17-04_slides.pdf.
Accessed February 9, 2005.
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Step-Therapy Opportunities
DRUG CLASS OR SUBCLASS
FIRST-LINE DRUG OR SUBCLASS (EXAMPLE)
SECOND-LINE DRUG OR SUBCLASS (EXAMPLE)
Agents for Allergic Rhinitis
Oral NSAs (loratadine)
Leukotriene pathway inhibitors (Singular®)
Agents for ADHD
Generic stimulants
(methylphenidate)
Strattera®
Aldosterone Blockers
spironolactone
InspraTM
Antiasthmatics
albuterol
Xopenex®
Antidepressants
Generic SSRIs (fluoxetine)
Brand SSRIs (Zoloft®)
Brand SNRIs (Effexor® XR, Cymbalta®)
Antidepressants
bupropion SR
Wellbutrin XLTM
Antidiabetics
metformin
Glucophage XR®
Antihypertensives
Generic ACEIs (lisinopril)
Brand ACEIs (Altace®)
ARBs (Diovan®, Cozaar®)
Anti-inflammatory Agents
Generic NSAIDs (ibuprofen)
Brand NSAIDs
COX-2s (Celebrex®)
Antipsychotics
Atypical antipsychotics
(Risperdal®)
SymbyaxTM
Antivirals
Generic acyclovir
Brand antivirals (Valtrex®, Famvir®)
Anxiolytics
Generic benzodiazepines
(diazepam)
Brand benzodiazepines (Xanax® SR)
Bile Acid Sequestrants
cholestyramine, colestipol oral
WelcholTM
suspensions and micronized tablets
Calcium Channel Blockers
Generic CCBs
Brand CCBs (Norvasc®)
Cholesterol-lowering agents
Minimum-dose statins
Generic statins (lovastatin)
ZetiaTM
Brand statins (Zocor®, Lipitor®)
Gastrointestinals
Generic PPIs (omeprazole)
Brand PPIs (Nexium®, Prevacid®)
Topical corticosteroids
Generic topical steroids
(augmented betamethasone
dipropionate)
Brand topical steroids
(Aclovate®, Elocon®, Halog®)
Topical Immunomodulators
Generic corticosteroids
(augmented betamethasone
dipropionate)
Elidel®
Protropic®
Abbreviations
NSAs – Non-sedating antihistamines
ADHD – Attention-Deficit/Hyperactivity Disorder
SSRIs – Selective serotonin reuptake inhibitors
SNRIs – Selective norepinephrine reuptake inhibitors
ACEIs – Angiotensin-converting enzyme inhibitors
ARBs – Angiotensin-2 receptor blockers
NSAIDs – Non-steroidal anti-inflammatory drugs
COX-2s – Cyclooxygenase 2 inhibitors
CCBs – Calcium channel blockers
PPIs – Protron pump inhibitors
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Exhibit 32
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Step Therapy for Statins: NEW LEARNINGS
Historically, some clients were concerned that lovastatin, the generic first-line statin,
may not decrease low-density lipoproteins (LDL) as much as some of the brand statins.
However, statins are used for multiple purposes. For primary prevention, they are taken
to help keep patients with high cholesterol but with no coronary heart disease from
having their first cardiovascular events, such as heart attacks or strokes. Patients
taking a statin for secondary prevention have already experienced a cardiovascular
event. These patients are trying to reduce the chance of additional events.
While several of the brand statins are both cost effective and warranted for secondary
prevention, clinical research has shown that their general use for primary prevention
is not cost effective at brand prices.38, 39, 40 In addition, the average cholesterol-lowering
results achieved with lovastatin are well within the recommended levels for primary
prevention defined by the National Cholesterol Education Program.41 For primary
prevention, generic lovastatin is usually the most cost-effective statin choice.42
Therefore, Express Scripts developed our statin step-therapy program to target members
with new prescriptions for a low-dose, brand statin. We found that 51% of these new
low-dose statin users were probably using the statin for primary prevention, because
they had no other drug markers indicating secondary prevention. Accordingly, these
members were good candidates for the use of generic lovastatin, and their prescriptions
triggered a message to the dispensing pharmacist. Of those targeted during the
analysis period, 52.5% switched to lovastatin.
38
Moghadasian MH, Mancini GB, Frohlich JJ. Pharmacotherapy of hypercholesterolaemia [sic]: statins in clinical practice.
Expert Opinion in Pharmacotherapy. 2000;1(4):683-695.
Prosser LA, Stinnett AA, Goldman PA, Williams LW, Hunink MG, Goldman L, Weinstein MC. Cost-effectiveness of cholesterollowering therapies according to selected patient characteristics. Annals of Internal Medicine. 2000;132(10):769-779.
40
Pickin DM, McCabe CJ, Ramsay LE, Payne N, Haq IU, Yeo WW, Jackson PR. Cost effectiveness of HMG-CoA reductase inhibitor
(statin) treatment related to the risk of coronary heart disease and cost of drug treatment. Heart. 1999;82(3):325-332.
41
National Cholesterol Education Program (NCEP). Third Report of the NCEP Expert Panel on Detection, Evaluation, and
Treatment of High Blood Cholesterol in Adults (Adult Treatment Panel III). Executive Summary. Bethesda, MD: NIH; 05/01.
NIH Pub No. 01-3670.
42
Perreault S, Hamilton VH, Lavoie F, Grover SA. Treating hyperlipidemia for the primary prevention of coronary disease are
higher dosages of lovastatin cost-effective? Archives of Internal Medicine. 1998;158:375-381.
39
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Calcium channel blockers (CCBs) represent another therapy class that has been
dominated by brand presence. Norvasc® (amlodipine) is by far the most prescribed
member of a CCB subclass known as dihydropyridines (DHPs). Although direct
generics for Norvasc are not scheduled to be available until 2007, lower-cost generic
alternatives, such as extended-release nifedipine, are available currently. Generic DHPs
are considered therapeutically equivalent to Norvasc for the majority of indications
(angina, essential hypertension and hypertension in combination with certain other
conditions). Yet Norvasc market share continues to grow, in part due to successful
clinical differentiation in a subset of patients with congestive heart failure (CHF).
When Express Scripts examined medical data and pharmacy claims for a large
managed-care organization, we found that 6.2% of Norvasc users had a diagnosis
of CHF, which would warrant the use of Norvasc. Further evaluations were done
to discover the most effective ways to identify Norvasc users who are not diagnosed
with CHF. We found that by identifying specific drug markers that indicate treatment
for CHF, we exclude more than 70% of CHF patients from even receiving a step-therapy
edit for Norvasc. As a result, we have been able to develop a clinically-sound steptherapy program that minimizes member disruption and channels the generic and
brand alternatives to appropriate patients.
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Step Therapy for Calcium Channel Blockers: NEW LEARNINGS
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HOW MUCH DOES STEP THERAPY SAVE?
Savings from step-therapy programs are significant. In Express Scripts’
experience, clients can save 10% or more on overall drug spend when
implementing all of the step-therapy programs. Savings build over time
because they result not only from initial prescriptions for new users,
but also from refills for patients who received an edit and changed
to a first-line drug in previous months. The amount of time needed
to reach a steady level of savings varies by therapy class.
As POS programs, step-therapy edits are delivered by computerized
messages to the pharmacist who dispenses the prescription. Additionally,
because step-therapy programs grandfather current users, their only impact
is on new users of a medication. Therefore, educating members before
they receive step-therapy edits is difficult. On the other hand, because step
therapy affects a very small percentage of most groups, communicating
to all members of the plan is not practical. Furthermore, even if steptherapy communications go out to all members of a group, most will
not remember the details if they eventually receive a step-therapy edit.
WHAT IS THE MEMBER RESPONSE?
Express Scripts research in 2003 found some member confusion
about step therapy and the options after receiving a step-therapy edit.
Very few members, however, reported not receiving a prescription
at all. Most members without a claim in our system reported obtaining
the medication through another source — including samples from
the physician, paying out of pocket or obtaining OTC medication
(Exhibit 33).
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Member-Reported Outcomes After a Step-Therapy Edit
35
30
Percent
25
20
15
10
5
0
Source: Motheral BR, Henderson R, Cox ER. Plan-sponsor saving and member experience with point-of-service prescription step therapy.
American Journal of Managed Care. 2004;10(7) 457-464.
Based on these findings, Express Scripts developed a RapidResponse
program specifically to educate members who do not have another claim
within two days of receiving a step-therapy edit. We send the member
a letter with information on step therapy, an explanation of the options,
and a list of first- and second-line drugs. A controlled, randomized
study, which we conducted in 2004, found that members receiving
RapidResponse letters elected to fill a generic drug more frequently than
those not designated to receive a RapidResponse letter. The client realized
an additional savings of $0.10 PMPM, and members were better
informed about their therapy alternatives.
Exhibit 34
Outcomes After a RapidResponse Letter*
GROUP
BRAND
Treatment Group (N=3,689)
Control Group** (N=3,672)
63.5%
70.7%
*Among those with a prescription claim after the edit.
GENERIC
36.5%
29.3%
** Randomly assigned.
QUANTITY LIMITS
To minimize waste and stockpiling, prescriptions filled in local
participating (retail) pharmacies frequently are limited to a defined
amount per dispensing or a specified days’ supply — typically a 34-day
supply per fill. Beyond these standard supply limits, additional quantity
limits can be used to ensure that quantities supplied are consistent with
both clinical dosing guidelines and the plan sponsor’s benefit design.
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Exhibit 33
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For example, quantity limits are sometimes used for inhalers and other
drug-delivery devices that contain specific numbers of doses. Another
obvious use of quantity limits is for lifestyle products, such as drugs
that treat erectile dysfunction.
Quantity limits can also be used to prevent billing errors. When the
days’ supply figure keyed in by the pharmacist is unreliable (inhalers
charged by the gram instead of by the device, for example), a quantity
limit on the units dispensed can be used to ensure that errors are caught.
Finally, quantity limits can be used to encourage dose consolidation —
the use of a single unit of one strength of a drug in place of two units
that are half that strength. Manufacturers sometimes use a price parity
structure — meaning that their products have little or no difference
in price among various strengths. In some cases, encouraging dose
consolidation is appropriate. Lately, retrospective dose consolidation
has received attention as a strategy for plan sponsors to control drug
cost,43 but Express Scripts research has shown that these programs are
not as effective as they were originally thought to be. See the following
NEW LEARNINGS section for more information.
Drug classes for which quantity limits are frequently used include:
• Allergy Medications (oral and injectable)
• Erectile Dysfunction Agents
• Inhalers and Nasal Sprays
• Migraine Products
• Patches
• Vaginal Creams and Suppositories
When a quantity exceeding the plan sponsor’s limit is detected at the
time of dispensing, a message indicating the quantity limitation is sent
to the pharmacist’s computer. The pharmacist may either contact the
doctor to discuss a possible change in quantity that is consistent with
the dosage guidelines, or dispense the prescription until the physician
can be reached. The physician may also request an override if the quantity
limit is not applicable to the patient and the condition being treated.
43
Calabrese DC, Baldiner SL. Dose-optimization intervention yields significant drug cost savings. Journal of Managed Care
Pharmacy. 2002;8(2):146-151.
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In an article that received the 2004 Award for Excellence as the Paper of the Year
from the Journal of Managed Care Pharmacy, Express Scripts researchers reported
on a randomized, controlled research study designed to evaluate retrospective dose
consolidation for a large mid-Atlantic health plan.44 Pharmacy claims were reviewed
for three consecutive months (from November 2002 through January 2003) to identify
inefficient (more than once-daily) regimens for any one of 68 strengths for 37 singlesource medications with a once-daily dosing recommendation. Prescribers were
randomized to one of two intervention groups or a control group.
In both intervention groups, prescribers received personalized letters outlining their
patients’ regimens and suggesting dose-consolidation options. In one intervention
group, patients also received a letter. In the control group, no interventions were done.
Prescription-drug claims for patients in all three groups were examined 180 days after
the date of the intervention to determine how many prescriptions were converted
to a more efficient (once-daily) regimen.
The rate of consolidation was highest (10.2%) for the group in which both physicians
and patients received a letter. The physician-only group had a 7.3% conversion rate,
compared with the control group’s rate of 3.9%. Approximately 30% of the regimens
identified for all three groups in the study were never refilled after being identified.
Savings were found to be only $0.02 to $0.03 PMPM when they were calculated using
realistic compliance rates. Factoring in costs to administer the program lowered the
savings even more. Review of the therapy classes that were targeted in the study showed
few opportunities to justify implementing a retrospective dose-consolidation program.
Important points to consider when evaluating programs and reported results include:
• Did the study use a control group to factor out background rates of change?
• Was the control group equivalent to the treatment group?
• Were false assumptions made in modeling savings or effectiveness?
• Was the cost of the program taken into account?
44
Delate T, Fairman KA, Carey SM, Motheral BR. Randomized controlled trial of a dose consolidation program.
Journal of Managed Care Pharmacy. 2004;10(5):396-403.
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Dose Consolidation: NEW LEARNINGS
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Consumer-Driven Healthcare
Interest in healthcare consumerism has never been greater. As plan
sponsors continue to look for strategies to better manage spiraling
healthcare costs, many are looking to consumer-driven healthcare
(CDHC) as a possible solution. At the core of CDHC is consumerism,
which is defined in the healthcare context as approaches designed to
inform, empower or provide incentives for consumers to play a more
active role in making cost-effective decisions about their healthcare.
While CDHC has been part of the U.S. healthcare delivery system for
some time — although more in theory than in practice — two major
factors contribute to the heightened interest it has received recently.
First, consumers generally are more prepared to participate in decisions
for themselves and their families. In particular, consumers are more
aware of choices in the healthcare market. Typically, most healthcare
decisions have been left up to a third party — a doctor, an employer,
an insurance company — with little or no input from the member.
With increasing Internet use, however, consumers are more proactive
about seeking information on healthcare-coverage options, insurance
carriers and potential treatments.
According to results of a recent Harris Interactive study, approximately
three-fourths of all Internet users (accounting for more than half of
all adults in the U.S.) have researched health information online.45
In addition, pervasive direct-to-consumer (DTC) advertising for
prescription drugs and healthcare services also raises consumer awareness
of treatments. Moreover, patients are more willing to discuss health
information with their doctors — even requesting specific drugs by
name in many cases. In 2001, about 30% of the adults participating
in a survey indicated they had talked with a doctor about a drug they
had seen advertised, and 44% of the people who talked with a doctor
received a prescription for the advertised drug.46 Most importantly,
an increasing number of employees have been given the choice
of more options for their employer-sponsored health benefits.
45
46
Taylor H, Leitman R, eds. No significant change in the number of “cyberchondriacs” – those who go online for health care
information. Health Care News. Harris Interactive Health Care Research. 2004;4(7):1.
Kaiser Family Foundation. Understanding the effects of direct-to-consumer prescription drug advertising. November 2001.
Available at: http://www.kff.org/rxdrugs/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=13876.
Accessed March 3, 2005.
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According to a survey conducted by the trade publication Inside
Consumer-Directed Care, approximately 3.2 million people were
covered by an account-based, consumer-driven health plan (CDHP)
on Jan. 1, 2005.47 This figure represents only 2% of the estimated
160 million Americans who have employer-sponsored health insurance.
While the actual number of current enrollees in CDHPs is low, the
demand for this plan design is growing among employers. Exhibit 35
on the following page differentiates the three main types of CDHP
spending accounts currently available in the U.S.
47
Davis S, ed. CDH enrollment nearly triples to 3.2 million; traditional payers, new players tout gains.
Inside Consumer-Directed Care. Atlantic Information Services. 2005;3(1):1.
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Secondly, the idea of individual accountability for actions and decisions
has begun to take hold among plan sponsors. Despite limited adoption
of medical savings accounts in the mid-1990s due to their restrictive
requirements, modifications in the accounts offered today have renewed
interest in them. The Health Reimbursement Arrangement (HRA),
introduced in 2002, has gained popularity among plan sponsors as an
employer-funded spending account that — unlike the “use it or lose it”
provision of Flexible Spending Accounts (FSAs) — allows for unspent
funds to be rolled over from year to year. This flexibility gives members
an incentive to limit discretionary spending so they have more funds
available in future years. The Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 established Health Savings Accounts
(HSAs), which the current administration is promoting heavily. Extensive
media coverage of HSAs, along with the tax advantages they offer
(contributions, earnings and distributions are all tax-free), has caught
the attention of plan sponsors and consumers, generating further interest
in CDHC and the High Deductible Health Plans required with HSAs.
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Exhibit 35
CDHP Spending Accounts
FSA
HRA
HSA
Description
Tax Break
Employer I.O.U.
Healthcare 401(k)
Funding
Employee
Employer
Both
Rollover
No
Yes
Yes
Portable
No
No
Yes
Investments
No
No
Yes
Plan Restrictions
No
No
Yes (HDHP)
Stand-Alone Rx Plan
Yes
Yes
No (HDHP)
Substantiation for Payments
Yes
Yes
No
FSA: Flexible Spending Account; HRA: Health Reimbursement Arrangement; HSA: Health Savings Account
CDHC includes much more than financial considerations, however.
The true spectrum of CDHC is holistic — it concerns the whole
individual and emphasizes personal responsibility for all the factors
influencing health. CDHC ranges from wellness programs and disease
management to sophisticated online decision-support tools (Exhibit 36).
While changes in benefit design may be one effective way to distribute
costs more equitably between employers and employees, benefit designs
must be combined with other elements of consumerism to create the
kinds of long-term behavioral changes that will sustain both cost
containment and the ability for employers to continue providing
prescription-drug benefits.
Exhibit 36
The Consumer-Driven Healthcare Spectrum
Decision
Support
Custom
Health Plan
Member
Education
Wellness & Disease
Management
Financial
Incentives
126 express scripts drug trend report 2004
Benefit
Design
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Express Scripts addresses the holistic nature of CDHC through a variety
of initiatives designed to encourage responsible consumer behavior at
all points in the CDHC spectrum. Although the following discussion
relates each program to a distinct sector of the spectrum, the programs
are all interrelated, with considerable overlap among them.
For members to make cost-effective decisions about their healthcare,
they must have easy access to critical drug and benefit information.
Express Scripts provides this information through a variety of online
decision-support and member-education tools. Our online tools provide
pricing information and describe cost-saving opportunities to help
members manage their deductible and accurately estimate annual outof-pocket expenses. Plan sponsors can access a variety of informative
materials for their members on our online Member Communications
Catalog. Additionally, both clients and members can view noncommercial
drug information at www.DrugDigest.org, the evidence-based, consumeroriented Web site that Express Scripts maintains in cooperation with
faculty from the St. Louis College of Pharmacy.
An important goal of consumerism is to encourage members to take
more active roles in managing their health — especially members
who are seriously ill or who have family members with serious health
conditions. To educate members about health conditions, Express Scripts
offers care-management programs with patient interventions that
range from Web service to letter-based communications. For member
populations that would benefit from individualized health consultations,
Express Scripts works directly with LifeMasters to provide diseasemanagement services. When authorized, Express Scripts also shares
claims data with clients — and their approved vendors — that want
to conduct their own disease-management programs. In addition to helping
members manage their conditions, Express Scripts offers online healthrisk assessments, which are available through www.DrugDigest.org.
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EXPRESS SCRIPTS SUPPORTS CDHC
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Research consistently demonstrates that consumers who have choices
are more satisfied with the outcomes, especially with medical- and
prescription-benefit plan choices. The goal of custom health plans is
to let consumers select the benefit structure that best suits their needs.
Express Scripts offers customization through Express ChoiceSM, a product
that allows plan sponsors to offer multiple prescription-drug plans with
varying degrees of aggressiveness. Members select the most appropriate
plan for their given situations. Then, throughout the plan year, members
experience the effects of their own decisions regarding cost, coverage and
flexibility while the plan sponsor continues to manage drug expenditures.
Express Choice provides an opportunity for plan sponsors to promote
consumerism without moving completely away from traditional benefit
designs. In addition, because members have been given the freedom of
choice, plan sponsors can manage trend aggressively without sacrificing
member satisfaction. In fact, one client using Express Choice reduced its
PMPM drug spend by 20% while keeping member satisfaction above 90%.
To help members make decisions, an online tool is available during
open enrollment. This tool presents the prescription-drug plan choices
in a personalized way that demonstrates how each plan could affect the
individual member’s out-of-pocket costs. When applicable, it also shows
members how they can get the most from their benefit dollars by using
generics and home delivery.
Plan sponsors that use Express Choice have demonstrated consistent
and significant savings, as demonstrated in the following NEW
LEARNINGS section.
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One health plan successfully used Express Choice to move members into more
aggressive prescription-drug plans and to promote consumerism. When the client
adopted Express Choice in 2003, member options expanded from one plan to three,
adding two plans that were more aggressive than the original offering:
• Premium Plan: The client maintained its 2002 benefit as its richest offering. The
plan offered low copayments, the broad Express Scripts National Preferred formulary
and Express Scripts’ broadest participating (retail) pharmacy network.
• Standard Plan: The middle plan used the same pharmacy network but had
slightly higher copayments, changed to the more restrictive Express Scripts Prime
formulary and added Exclusive Home Delivery (mandatory-mail service) for selected
maintenance medications.
• Basic Plan: The most restrictive plan also used the Express Scripts Prime formulary
and Exclusive Home Delivery, but added even higher copayments and a limited
participating pharmacy network.
To reward members for choosing the more restrictive plans, the Standard and Basic
Plans offered the lowest member premiums (previously, prescription-drug and medical
premiums had been bundled). Thus, members had an incentive to choose a more tightlymanaged plan. The client still controlled costs while allowing those members who
wanted a richer benefit to choose the Premium Plan at a higher cost.
Over the next two years, the client made a few plan-design changes — most notably
adding several step-therapy modules and switching from retail copayments to coinsurance
in 2004 (Exhibit 37).
Exhibit 37
Summary of Client’s Plan Design for 2005
BASIC
STANDARD
PREMIUM
Formulary
Narrow
Narrow
Broad
Network
Narrow
Broad
Broad
Exclusive Home Delivery
Yes
Yes
No
Retail Coinsurance
30%
25%
20%
$25/$40/$80
$20/$30/$75
$15/$30/$70
Low
Medium
High
Home-Delivery Copayment
Member Premium
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PLAN SELECTION: MOVING IN THE RIGHT DIRECTION
In addition to providing members with incentives to make more
cost-effective decisions, Express Choice serves as an effective changemanagement tool by giving members the option to choose more restrictive
plan designs if those designs suit their needs. As shown in Exhibit 38,
the client has seen a significant move from the Premium Plan to the more
aggressive Standard and Basic Plans since 2003. Enrollment in the more
cost-effective plans grew from 55% in 2003 to 71% in 2005.
Exhibit 38
,
Members Choice of Plan Designs 2003 to 2005
Percent
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100
90
80
70
60
50
40
30
20
10
0
45.1
29.2
39.6
Premium
35.7
27.0
28.0
2003
Standard
29.7
Basic
35.1
30.7
2004
2005
Express Choice enabled the client to promote consumer choice while
managing the prescription-drug benefit aggressively. In 2004, the client’s
PMPM cost declined by 6% compared with PMPM cost in 2003.
When member premium contributions are factored in, the savings
are even greater.
In 2004, the client also saw home delivery grow by nearly a third and
generic utilization grow by 15.9%. More movement from the Premium
Plan to the Standard and Basic Plans, which both have Exclusive Home
Delivery, may result in similar additional increases in 2005.
2004 Results
• Plan drug spend
• Home delivery
• Generic utilization
-6%
+32.6%
+15.9%
2005 Projections
• 115,000 incremental home-delivery prescriptions (+40%)
• 15% increase in generic utilization
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At the heart of CDHC are financial incentives that influence consumer
healthcare decisions. Express Scripts supports the administration of
spending accounts and high deductibles through data integration with
health plans and debit-card vendors.
EXPRESS SCRIPTS SUPPORTS CONSUMER-DRIVEN HEALTH PLANS
Express Scripts exchanges data in two ways that support CDHPs.
In the first process, pharmacy claims information that Express Scripts
sends to health plans allows the administration of integrated medical
and pharmacy CDHPs, typically HSA-qualifying, high-deductible health
plans. Medical data are sent to Express Scripts and pharmacy data are
sent to the health plans in a nightly batch process (Exhibit 39). Realtime data exchange is not relevant for integrated deductible management
because pharmacy claims are already processed weeks, if not months,
ahead of medical claims. Both the plan sponsor and Express Scripts
track the integrated deductible and maximum out-of-pocket costs
so that future claims can be processed using up-to-date totals. The
process does not involve the movement of actual HSA or HRA funds;
it is simply a mechanism for benefit administration.
Exhibit 39
Integrated Deductible Claims — Batch Process
MEMBER
Fills Rx
at pharmacy
Goes to doctor
Updates
integrated
deductible
EXPRESS SCRIPTS
Adjudicates Rx claim
based on integrated
deductuble
Sends Rx claim info
(batch)
PLAN SPONSOR
Adjudicates medical
claim based on
integrated deductuble
Sends medical
claim info (batch)
Updates
integrated
deductible
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When considering whether to implement CDHC, plan sponsors
frequently focus on benefit design — specifically on high-deductible
plans with spending accounts. A benefit plan structured around
coinsurance also fits within the consumerism framework because
it exposes the member to the true cost of products and services.
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In the second process, Express Scripts sends data that support
plan sponsors who choose to offer their members debit cards linked
to FSAs or HRAs. Debit-card use is growing because it offers members
convenient access to their HSAs without needing to file a paper claim for
reimbursement. To offer a debit card, a plan sponsor must contract with
a debit-card vendor through an FSA or HRA administrator. Express Scripts
does not interface directly with the plan sponsor. Instead, Express Scripts
sends real-time pharmacy-claims information to the debit-card vendors.
The vendor can substantiate members’ purchases and deduct them
automatically from FSAs and HRAs at the point of sale. Members
are not required to substantiate payments from HSAs.
By providing clients with tools that give their members healthcare
options, inform them about the possible implications of different
choices and allow them to make personal tradeoffs, the array of CDHC
opportunities offered by Express Scripts promotes efficient use of the
prescription-drug benefit, rather than imposing restrictions on it.
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Even though medical benefits — including prescription-drug benefits —
are common, they have very personal implications. Decisions about
providing drug coverage become clearer when viewed in the same way
other products are procured. Many companies, for example, purchase
supplies or equipment from a preferred vendor that provides the right
balance of cost and service. The employer selects the vendor based
on criteria important to the specific environment.
A similar approach can be applied to providing medical benefits —
particularly prescription-drug benefits. Over the past few years, the
focus for controlling prescription-drug cost has been on drug mix —
moving utilization from expensive brand drugs to generics or lowercost formulary brands. New mix opportunities exist for many clients,
but managing mix may not be enough as trend continues to increase.
In 2005 and beyond, focus is shifting to appropriate distribution of
prescriptions through local participating (retail), home-delivery, specialty
and other pharmacy channels. To manage prescription dispensing,
some clients have even started building pharmacies inside or near
their production facilities. Moving prescriptions to the appropriate
distribution channel is crucial to finding the right balance for
clients and members.
Optimizing the distribution channel has numerous benefits. The
primary advantage is savings; but convenience, service and the ability
to continue offering benefits long-term are also prime considerations
for many clients.
HOME DELIVERY
Home delivery (mail service) allows patients to have their prescriptions
for maintenance drugs filled at an Express Scripts Pharmacy location,
then delivered to their doorsteps. Home delivery is convenient and costeffective. The advanced technologies used by the Express Scripts Pharmacies
help both clients and patients save money while maintaining high levels
of service and quality. The challenge is that although home delivery
of prescriptions is a standard offering in today’s market, 43% of patients
do not even know that their benefits include home delivery.48
48
Roe C. 2001 Mail order survey. Final report. Express Scripts, Inc. May 3, 2001. Unpublished.
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Prescription Distribution
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With appropriate plan design, home delivery represents a fiscally-responsible
solution for plan sponsors and members who use maintenance medications.
On average, across the Express Scripts book of business, each prescription
filled through home delivery costs up to 10% less than the same prescription
filled at a local participating pharmacy. Currently, approximately 22%
of our clients’ members are still filling their maintenance medications
at local participating pharmacies. In total, 58% of all claims processed
by Express Scripts are for maintenance medications, which have an average
wholesale price of $120 per claim. To channel the appropriate prescriptions
from retail to home delivery, clients are using two broad strategies:
1. Promoting home delivery through general and targeted
patient-education materials
2. Implementing plan designs that encourage or require members
to use home delivery
In response to monthly patient surveys conducted by Express Scripts in
2004, 98% of patients using home delivery for their prescriptions said
they used home delivery because it is less expensive than other options.
In the same study, 84% of the respondents found home delivery more
convenient than going to a local participating pharmacy. In fact, respondents
over 55 years old cited convenience as their number one reason for
choosing home delivery. In follow-up research, Express Scripts found
that members often equate convenience with having to fill the prescription
only four times per year. These findings are consistent with other
Express Scripts research that showed the patient’s age and copayment
savings as primary drivers of home-delivery use.
Other analyses, which looked at retention of home-delivery users,
revealed that 90% of patients who used home delivery in the first half
of the year continued to use home delivery in the following six months.
Of the patients who stopped using home delivery:
• 2% were no longer taking maintenance medications
• 3% did not get a subsequent claim through either home
delivery or a local participating pharmacy
• 5% continued to fill maintenance prescriptions
at a local participating pharmacy
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Given the cost savings associated with home delivery, comparing it with
the retail channel is critical in three key areas:
1. Persistency
2. Generic Fill Rate
3. Waste
Persistency
Some controversy exists over the value that home delivery provides to
employers when compared with local participating (retail) pharmacy
use. During this debate, assertions have been made that consistency rates
are considerably worse for patients who use home-delivery pharmacies
compared with patients who use retail pharmacies.49
To test this assumption, researchers at Express Scripts performed an
analysis on medication use for more than 2 million randomly-sampled,
continuously-eligible members from the Express Scripts book of business.50
Researchers examined records for patients who started a maintenance
medication in May, June or July 2002. Patients were followed for 11
months to determine their medication refill rates.
Patients who used home delivery refilled their medications at a substantially
higher rate than patients using local participating (retail) pharmacies
(Exhibit 40). In fact, the researchers found that after results were
controlled for age and gender, new users of maintenance medications
who used local participating (retail) pharmacies were approximately
50% less likely to be refilling their medications 11 months after the
first fill, compared with patients using home delivery.
49
50
PBMs push mail-order penetration rates, but employers should be wary of incentives. Managed Care Week.
September 15, 2003.
Delate T, Svirnovskiy Y. Compliance among retail pharmacy users lower than mail pharmacy users. Express Scripts, Inc.
January 2004. Unpublished.
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COMPARING RETAIL AND HOME-DELIVERY PHARMACIES
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Exhibit 40
Persistency Among New Users of Local Participating (Retail) and Home Delivery (Mail)
120
100
Percent Still Refilling
pharmacy benefit guide
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Home Delivery
(Mail)
80
60
Local
Participating
(Retail)
40
20
0
1
2
3
4
5
6
7
8
9
10
11
12
Months of Therapy
These findings clearly show that among this sample, patients using
home delivery are not less compliant than local participating (retail)
pharmacy users.
Generic Fill Rate
Previous studies, some funded by the retail-pharmacy industry, have
also pointed to disparities in the generic-dispensing rate between
home-delivery and retail pharmacies as evidence that pharmacy benefit
managers (PBMs) steer consumers toward more expensive brand drugs.
In a fully-independent study, however, Harvard economists found that
in reality, PBM-owned home-delivery pharmacies dispense and substitute
generics at essentially the same rates as retail pharmacies. The authors
differentiated generic dispensing (the number of claims that are filled
with generics compared with the total number of drug claims — whether
or not the drug dispensed has a generic equivalent) and generic substitution
(the number of generic claims compared with the number of opportunities
to fill with a generic).
The study, which was published online, examined 670 million prescriptiondrug claims that were processed by five large PBMs during the first six
months of 2003.51 Although claims for home-delivery prescriptions
represented only about 10% of the total number of prescriptions, they
accounted for about one-third of the total days’ supply of drugs.
51
Wosinska M, Huckman R. Generic dispensing and substitution in mail and retail pharmacies. Health Affairs.
Web Exclusive. July 28, 2004. Available at: http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.409v1?maxtoshow
=&HITS=10&hits=10&RESULTFORMAT=&author1=wosinska&andorexactfulltext=and&searchid=1109282481483_
4094&stored_search=&FIRSTINDEX=0&resourcetype=1&journalcode=healthaff. Accessed February 25, 2005.
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In the area of generic substitution, the researchers found that PBMowned home-delivery pharmacies actually have a slightly higher genericsubstitution rate (93%) than local participating pharmacies (92%).
The authors suggest that home-delivery pharmacies may have more
opportunity to request generics because they usually have prescriptions
in hand for a longer time than participating pharmacies.
Exhibit 41
Generic Dispensing and Generic Substitution Rates*
Retail Pharmacies vs Home-Delivery Pharmacies
100
Percent
80
Retail
60
40
Home-Delivery
20
0
Generic Dispensing Rate
Generic Substitution Rate
*Adjusted to control for differences in the therapeutic mix of drugs dispensed by home-delivery and retail pharmacies.
Source: Wosinska M, Huckman R. Generic dispensing and substitution in mail and retail pharmacies. Health Affairs.
Web Exclusive July 28, 2004. Available at: http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.409v1?maxtoshow=&HITS=
10&hits=10&RESULTFORMAT=&author1=wosinska&andorexactfulltext=and&searchid=1109282481483_4094&stored_search=
&FIRSTINDEX=0&resourcetype=1&journalcode=healthaff. Accessed February 25, 2005.
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Generic-dispensing patterns at PBM-owned home-delivery pharmacies
were compared to those at retail pharmacies, controlling for differences
in consumer use of the two types of pharmacies. Consumers typically use
home-delivery pharmacies to obtain medication needed on a continuing
basis for treating chronic conditions, such as high blood pressure.
Medication used to treat acute conditions, such as infections, is typically
obtained through local participating pharmacies because it is usually
needed quickly. After correcting for these differences, the study found
that the adjusted generic-dispensing rate at home-delivery pharmacies
is 39%, nearly the same as the 40% adjusted generic-dispensing rate
at local participating pharmacies.
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The Question of Waste
Other questions that often arise are whether to offer a 90-day
local participating (retail) pharmacy plan and whether that option
creates additional waste.
In 2004, researchers at Express Scripts examined the financial impact
of a 90-day retail benefit for two plan sponsors52 (Exhibit 42).
Exhibit 42
Summary of Benefits for Two Plan Sponsors
CLIENT
RETAIL BENEFIT
RETAIL COPAYMENT
HOME-DELIVERY COPAYMENT
90-day
90-day
90-day = 1 x 30-day
90-day = 3 x 30-day
90-day = 1 x 30-day retail
90-day = 2 x 30-day retail
Client A
Client B
To calculate waste from 90-day dispensing at local participating pharmacies,
the number of 90-day prescriptions that did not have at least one refill
was multiplied by two-thirds of the net cost of the prescription. This
approach was based on the assumption that patients who did not have
at least one refill used only the equivalent of a 30-day supply of their
dispensed drug. In other words, they wasted the remaining 60-day
supply. Empirical analyses of refill patterns for new retail-pharmacy
users who received both 30-day and 90-day prescriptions
supports this assumption (Exhibit 43).
Exhibit 43
Waste: Retail 90-Day vs Retail 30-Day
120
Percent Still Refilling
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100
Retail 90-Day
80
60
Retail 30-Day
Waste
40
Waste
Waste
20
0
1
52
2
3
4
5
6
7
Months of Therapy
8
9
10
Added prescription-drug cost of 90-day retail coverage. Express Scripts. 2004. Unpublished.
138 express scripts drug trend report 2004
11
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Client B also experienced financial loss due to waste, but its loss was
smaller because it charged three copayments for a 90-day supply of the
prescription from a local participating pharmacy. Therefore, the total
waste was much less.
Exhibit 44
Summary of Client Experiences With 90-Day Retail Benefits
90-DAY
RETAIL COPAYMENT
WASTE
FINANCIAL LOSS/(GAIN)
COST-SHARE
DISPENSING FEE
NET
LOSS
Client A
1 x 30-day
$42.14
$54.59
($11.13)
$85.60 PMPY*
(10.0% of net spend)
Client B
3 x 30-day
$5.83
-
($1.52)
$4.31 PMPY
(1.1% of net spend)
*PMPY: per member per year
Consequently, plan sponsors who contemplate offering coverage
of a 90-day supply of medication through local participating pharmacies
should consider the negative financial impact that results from medication
waste and reduced member cost-share. These financial losses totaled
1.1% and 10% for the two clients studied.
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Offering a 90-day retail benefit resulted in significant drug waste for
client A (Exhibit 44). Client A’s waste occurred for two main reasons.
First, a significant proportion of new prescription-drug fills — including
prescriptions with lowered discounts for acute medications — for
client A were dispensed as 90-day supplies. Secondly, approximately
40% of client A’s members who purchased a 90-day medication
supply apparently discontinued the medication after 30 days or less.
Client A’s increased drug waste was a direct result of using the same
copayment for 90-day and 30-day supplies of medication. This copayment
design encouraged members to fill a 90-day supply even if they were
unsure they would continue taking the medication. Client A experienced
additional financial loss due to reduced member cost-share.
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An optimal plan design provides coverage for a 30-day supply at retail
and allows for coverage of a 90-day supply only by home delivery.
Waste in 90-day home-delivery plans is mitigated because approximately
80% of prescriptions are first filled as a 30-day prescription at a local
participating pharmacy. The proportion of members who do not
refill decreases.
In addition, offering a 90-day supply through local participating
pharmacies does not provide the advantages of deep discounts and
reduced (or waived) fees found in home delivery. As a result, home
delivery of 90-day supplies offers less waste and greater savings because
it provides larger discounts and lower fees than 90-day supplies from
local participating pharmacies.
EXCLUSIVE HOME DELIVERY
According to a Hewitt Associates employer survey in 2004, 22% of the
employers surveyed had a mandatory-mail prescription program in place,
and another 51% were considering adding some type of mandatory-mail
offering.53 To respond to these changing market dynamics, Express Scripts
launched Exclusive Home Delivery, our recommended mandatory-mail
prescription program. Using the best practices from clients that have
been using this benefit design, Exclusive Home Delivery produces an
average total PMPY savings of approximately $35. With percentages
depending on the client’s plan design, these savings are shared by
patients, the plan sponsor or both.
Exclusive Home Delivery maximizes savings while increasing homedelivery use by about 25 percentage points. The recommended offering
has a standard drug list that includes approximately 10% fewer drugs
than the First DataBank list of maintenance medications because it excludes
seasonal drugs, controlled substances and other drugs for which home
delivery may not be appropriate. We also recommend an edit at the point
of sale after two retail fills of the same drug. Allowing two fills not only
gives Express Scripts and the plan sponsor time to educate patients,
it also minimizes the number of patients who receive reject edits.
53
Employer health care expectations. Future strategy and direction – 2005. Hewitt Associates. November 17, 2004.
Available at: http://was4.hewitt.com/hewitt/resource/spkrsconf/subspkrsconf/teleconferences/tapes/11-17-04_slides.pdf.
Accessed February 9, 2005.
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5
research studies
RESEARCH STUDIES
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PHARMACY BENEFIT DESIGN
Cox ER, Mager DE. Geographic variation in generic fill rate. 2003.
The purpose of this study was to evaluate the geographic variation in generic
fill rate by state. Data were extracted from a 2003 database containing
ambulatory administrative pharmacy-claims and eligibility information for a
random sample of approximately 3 million commercially-insured members.
The generic fill rate was adjusted for age and gender using a generalized
linear model. The generic fill rate ranged from a low of 39.5% in New Jersey
to a high of 51.3% in Massachusetts. Possible explanations for the variations
include differences in prescribing patterns, state regulations and disease
prevalence, and varying use of drug-benefit designs that encourage generic
use. These findings suggest that opportunities exist to achieve greater
savings through adoption of programs designed to increase generic use
in states where the generic fill rates are lower.
Cox ER, Svirnovskiy Y, Mager DE, Fairman KA. Trends in the
prevalence of antidepressant use in children: 2003-2004.
In a study published by Express Scripts in 2004, the use of antidepressants
among children 18 years old and younger increased 9.2% each year from
1998 to 2002. In 2003, the FDA issued a Public Heath Advisory warning
of increased suicidal thoughts and behavior in children taking certain
antidepressants. To determine whether the warning affected the use
of antidepressants in children, Express Scripts researchers evaluated
prescription-claims data for 2003 and the first half of 2004. The study
sampled more than 5 million commercially-insured children ranging
in age from birth to 19 years old. Results indicate that antidepressant
use in children continued to rise through the first half of 2004. The
overall rate of antidepressant use in children grew from 1.47% in the
first quarter of 2003 to 1.61% in first quarter 2004 — a 9.4% increase
in the prevalence of use. While overall growth continued, rates of use
appeared to moderate for teens and decrease for children under 9 years
old in second quarter 2004. It is unclear whether the decrease in use
among children 9 years old and under was due to the FDA Advisory,
because the studies documenting increased risk were in children no
younger than 7 years old (the youngest group studied ranged from 7 years
old to 9 years old). Physicians can be anticipated to use greater caution
when prescribing antidepressants for children, but a dramatic drop in
antidepressant use is unlikely to be seen, due to the use of antidepressants
for other mental health conditions in children and to the limited availability
of therapeutically-equivalent alternatives.
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Express Scripts Research Studies: 2002 to 2005
research
studies
RESEARCH
STUDIES
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Delate T, Mager DE, Sheth J, Motheral BR. Clinical and financial
outcomes associated with a proton pump inhibitor prior-authorization
program in a Medicaid population. American Journal of Managed
Care. 2005;11(1):131-139.
The purpose of this study was to examine the outcomes associated
with a proton pump inhibitor (PPI) prior-authorization (PA) policy.
Using a time-series analysis, a six-month pre- and post-design was used
to estimate clinical and financial effects of the policy. Results indicated
that expenditures per member per month (PMPM) decreased 91% for
PPIs and increased 223% for histamine 2-receptor antagonists (H2As)
in the month immediately following the policy implementation. Analysis
showed that enrollees who received an H2A or no antisecretory drugs
were no more likely to have incurred greater total medical expenditures
than enrollees who received a PPI. The use of PA for PPIs encouraged
the use of lower-cost H2As and reduced the use of high-cost PPIs
without evidence of adverse medical consequences.
Delate T, Fairman KA, Carey SM, Motheral BR. Randomized controlled trial of a dose consolidation program. Journal of Managed Care
Pharmacy. 2004;10(5):396-403.
The purpose of this study was to evaluate the effectiveness and
financial impact of a drug dose-consolidation program using a letterbased communication intervention. Using a randomized, controlled
research design, three study arms were evaluated: a letter-based intervention
with both physicians and members, a letter-based intervention with
physicians only, and a control group with no intervention to members
or physicians. The letters, which were personalized to the member or
physician, contained information about the inefficiency of prescribed
regimens and suggested dose-consolidation options. A review of pharmacyclaims data was performed for three consecutive months. Data identified
inefficient regimens for any one of 68 dosage strengths of 37 single-source
maintenance drugs, which all have once-daily dosing recommendations.
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Cox ER, Henderson R, Motheral BR. Health plan member experience
with point-of-service prescription step therapy. Journal of Managed
Care Pharmacy. 2004;10(4):291-298.
The purpose of this study was to better understand the experience
of members with point-of-service step-therapy edits and the outcomes
associated with these edits in terms of the drug received. Self-administered
surveys were mailed to members who experienced a step-therapy edit for
proton pump inhibitors or non-steroidal anti-inflammatory drugs. Based
on the results of the mailed survey, a telephone survey was conducted
among a separate group who experienced a step-therapy edit and did
not have a subsequent claim. Results of this study show that 59.4%
of members received a medication covered by their health plan following
a step-therapy edit. Among remaining members, 11.2% paid the total
cost out of pocket, 11.2% did not fill the prescription at all and received
no other similar medications, 8.1% received an over-the-counter medication,
3.6% obtained samples, and 6.6% didn’t remember or filled their
prescriptions another way. Results suggest that opportunities exist for
better member and provider communications that help increase the
use of first-line drugs and reduce the number of members who pay
out of pocket or receive no medication.
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Study results found that the rate of consolidation to a suggested dose was
higher for both intervention groups compared with the control group;
however, the rate was higher for the physician/member intervention
group compared with the physician-only group. Financial modeling
indicated that a dose-consolidation intervention could save $0.03
to $0.07 (in 2003 dollars) PMPM with full medication compliance,
but only $0.02 to $0.03 PMPM when savings were calculated with
realistic, partial-compliance rates. Findings indicated, therefore, that the
letter-based dose-consolidation program did not decrease prescriptiondrug expenditures appreciably.
research
studies
RESEARCH
STUDIES
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Motheral BR, Henderson R, Cox ER. Plan-sponsor savings and
member experience with point-of-service prescription step therapy.
American Journal of Managed Care. 2004;10(7 Pt 1):457-464.
The study examined the effect of prescription step-therapy programs
on plan-sponsor saving and member experience at the point of service.
A quasi-experimental case-control study design was used to measure plansponsor savings. Member experience with step therapy was measured
through a self-administered, mailed survey. Results of this study show
a decrease of $0.83 in net cost after implementing step therapy in the
intervention group, while the comparison group had an increase of
$0.10 PMPM for these therapy classes. Members who did not receive
a medication were less likely to be satisfied with their pharmacy benefit,
compared with those who received first-line therapy or those who paid
out of pocket for the brand medication. The study shows that step therapy
can have significant drug savings; however, opportunities exist to further
members’ and providers’ understanding of step-therapy programs.
Delate T, Henderson RR, Motheral BR. Financial impact of benefit
design choice for non-sedating antihistamines. January 2004.
All forms and strengths of Claritin® — a prescription non-sedating
antihistamine (NSA) — became available for sale over the counter (OTC)
in December 2002. No generic for Claritin entered the market, and
comparable drugs remained available by prescription only. As a result,
health plans have a number of trend-management options for OTC
Claritin and the prescription NSA products. This study presents
an evaluation of the financial impact on health-plan decisions
regarding NSA coverage.
This study is available at www.express-scripts.com.
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Roe CM, Heinle SM, Cox ER. Design of a three-tier benefit
and cost trend. Drug Benefit Trends. 2002;14(8):21-26.
This study explored how the design of a three-tier prescription benefit
correlates to drug trend. Pre- to post-period change in payer cost was
examined for 20 plans that switched from a two-tier to a three-tier
copayment design. Pre- to post-period trends in PMPM net costs decreased
when the aggressiveness of the three-tier structure and copayment per
prescription increased. This study suggests that more aggressive three-tier
structures are associated with lower net-cost trend.
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Fairman KA, Motheral BR, Henderson RR. Retrospective, long-term
follow-up study of the effect of a three-tier prescription drug copayment
system on pharmaceutical and other medical utilization and costs.
Clinical Therapeutics. 2003;25(12):3147-3161.
The purpose of this study was to examine the effect of a three-tier
copayment system on utilization and cost of both prescription-drug and
medical benefits. The study followed a group of commercially-insured,
preferred-provider organization members for 30 months after the threetier system was implemented. Results showed reduced growth in net cost
and lower utilization of third-tier medications. The intervention and
comparison groups did not differ significantly with respect to numbers
of office visits, emergency department visits or inpatient hospitalizations.
research
studies
RESEARCH
STUDIES
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COST-EFFECTIVENESS OF PHARMACEUTICALS
Cox ER, Motheral BR, Mager D. Verification of a decision analytic
model assumption using real-world practice data: implications for
the cost effectiveness of cyclo-oxygenase 2 inhibitors (COX-2s).
The American Journal of Managed Care. 2003;9(12):785-794.
This study evaluated the gastroprotective agent (GPA) rate assumption
used to model cost-effectiveness for COX-2s and to re-estimate model
outcomes using GPA rates from actual practice. This study found the
rate of GPA use is positive and marginally higher among COX-2 users
than among nonselective non-steroidal anti-inflammatory (NSAID)
users. Findings suggest a re-evaluation of COX-2 cost-effectiveness
models is warranted.
Cox ER, Motheral BR, Frisse M, Behm A, Mager D. Prescribing
COX-2s for patients new to cyclo-oxygenase inhibition therapy.
The American Journal of Managed Care. 2003;9(11):735-742.
The purpose of this study was to profile the pattern of COX-2 use,
including length of therapy, medical conditions treated and gastrointestinal
(GI) risk. Medical- and prescription-claims data from a large, preferredprovider organization were used to evaluate diagnostic conditions and
patterns of use among new COX-2 users. Approximately 19% of
patients did not have a diagnosis associated with COX-2 therapy; 65%
did not have an indication of being at risk for GI events; and 68% had
no history of trying a lower-cost nonselective NSAID before beginning
COX-2 therapy. Overall, 45% did not have a GI risk factor or prior use
of nonselective NSAID therapy. Findings suggest that opportunities
exist to encourage cost-effective prescribing of COX-2 therapy.
Fairman KA, Motheral BR. Do decision-analytic models identify
cost-effective treatments? A retrospective look at Helicobacter pylori
eradication. Journal of Managed Care Pharmacy. 2003;9(5):430-440.
This study was a retrospective examination of whether H. pylori pharmacoeconomic models lead to cost-effective therapeutic choices by
decision-makers.When model assumptions were replaced with empirical
data from a multi-payer claim database, model results were found to have
overstated the cost-effectiveness of PPI-clarithromycin and understated
the cost-effectiveness of bismuth-metronidazole-tetracycline (BMT).
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Cox ER, Frisse M, Behm A, Fairman KA. Over-the-counter pain
reliever and aspirin use within a sample of long-term cyclo-oxygenase 2
users. Archives of Internal Medicine. 2004;164(11):1243-1246.
The purpose of this study was to estimate the co-medication rates for
aspirin, ibuprofen, acetaminophen and naproxen sodium among long-term
COX-2 users. A telephone survey was used to measure co-medication use.
The survey was conducted by nurses trained in survey administration.
Members were asked about their use of COX-2s and OTC pain-relieving
agents over the past 30 days. They were asked to report the number
of days they took each medication, the dose or strength of the drugs
and, for those taking aspirin, the reason for its use. Study results show
a high rate of co-medication with aspirin for cardioprotection (99%)
and a sizeable percentage of co-medication with OTC pain relievers (76%).
These co-medication patterns, which have implications for patient
gastrointestinal safety, may suggest the need for better pain management.
Motheral BR, Heinle SM. Predictors of satisfaction of health plan
members with prescription drug benefits. American Journal of HealthSystem Pharmacy. 2004;61(10):1007-1014.
This study examined relationships between socio-demographic and healthplan characteristics, and member satisfaction with their prescription-drug
benefits. Surveys were mailed to a stratified, random sample of members
to assess knowledge of their prescription-drug benefits, as well as their
experience and satisfaction with those benefits. Of the 14,141 surveys
mailed, 3,819 were returned (27% response rate). Respondents were more
likely to be home-delivery users and less likely to be enrolled in a plan
with a closed formulary. Results indicated that the most important feature
of the prescription-drug benefit is out-of-pocket cost. Lower satisfaction
was associated with higher copayments, coinsurance, closed formularies,
intensive managed care, large healthcare premiums, a recent increase
in copayments and a recent denial of coverage. Greater satisfaction
was associated with excellent health and home-delivery use.
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POPULATION HEALTH AND PHARMACEUTICALS
research studies
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Delate T, Simmons VA, Motheral BR. Patterns of use of sildenafil
among commercially-insured adults in the United States: 1998-2002.
International Journal of Impotence Research. 2004;16(4):313-318.
This study profiled the use of sildenafil (Viagra®) in the U.S. The
percentage of Express Scripts members who used sildenafil increased
substantially from 1998 to 2002. Males aged 18 years old to 45 years
old — the current target of direct-to-consumer advertising — were the
fastest-growing segment of sildenafil users. The proportion of users
with an underlying medical reason declined in all age groups over
the five years. The finding that a stable number of sildenafil tablets
was dispensed per prescription over the study period suggests that
plan-sponsor use of benefit strategies can help manage trend for
this therapy class.
Delate T, Gelenberg AJ, Simmons VA, Motheral BR. Trends in the use
of antidepressant medications in a nationwide sample of commercially
insured pediatric patients, 1998-2002. Psychiatric Services.
2004;55(4):387-391.
The purpose of this study was to determine contemporary estimates
for the prevalence of ambulatory antidepressant medication (ADM) use
among commercially-insured children and adolescents. Results indicated
that the growth in the prevalence of ADM use in these populations
appears to be continuing at rates similar to those seen earlier for
second-generation ADMs.
Cox ER, Motheral BR, Henderson RR, Mager D. Geographic variation
in the prevalence of stimulant medication use among children 5 to 14
years old: Results from a commercially insured US sample. Pediatrics.
2003;111(2):237-243.
This study evaluated geographic variation in the use of stimulant
medications in a sample of commercially-insured children aged 5 years
old to 14 years old. The study also evaluated age, gender, income,
urban or rural residence, and other factors thought to influence the
use of stimulants in children. The study found significant variation
in use of stimulants across geographic regions, with lower use in the
West and higher use in the South and the Midwest.
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This study is available at www.express-scripts.com.
Cox ER, Henderson RR. Prescription use behavior among Medicare
beneficiaries with capped prescription benefits. Journal of Managed
Care Pharmacy. 2002;5(8):360-364.
The purpose of this study was to evaluate the strategies Medicare
beneficiaries adopt to manage their out-of-pocket prescription-drug
costs if their prescription-drug plan has a capped annual benefit of
$500 or $1,000. A total of 786 surveys were mailed to Medicare+Choice
members. Of the 28% response rate, 70% of respondents participated
in at least one strategy — obtaining samples from their physicians, for
instance — to manage prescription-drug costs. This strategy raises the
question of whether prescription-drug samples may discourage the
prescribing of lower-cost therapeutic alternatives.
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research studies
Teitelbaum F, Parker AR, Frear RS, Vargas SL. The change in the
use of hormone replacement therapies (HRT) combination products,
estrogens and other agents used to treat osteoporosis since the release
of HERS II and WHI findings. January 2003.
In July 2002, the Journal of the American Medical Association published two
studies questioning the relative safety of combination estrogen/progestin
hormone replacement therapy (HRT) products. To assess physician and
member reaction to these studies, Express Scripts researchers analyzed
the use of combination HRT products before and after the issuance of
the HERS II and WHI information. More specifically, Express Scripts
addressed the extent to which the use of estrogens, HRT combination
products (Prempro® and Premphase®) and other agents (such as Evista®,
Fosamax® and Actonel®) used to treat osteoporosis changed after these
highly-publicized studies were released.
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Roe CM, McNamara AM, Motheral BR. Use of chronic
medications among a large, commercially-insured U.S. population.
Pharmacoepidemiology and Drug Safety. 2002;11(4):301-309.
This study examined how medications for chronic conditions are used
in everyday life. Results showed that females were more likely than males
to use medications for chronic conditions during the study year, and
that medications commonly used to treat chronic conditions accounted
for 53% of total drug costs for both sexes. Generally, the likelihood
of using medications for chronic conditions increased with age for
both sexes. Additionally, of those who took drugs to treat chronic
conditions, 14% used combination therapy.
Roe CM, McNamara AM, Motheral BR. Gender- and age-related
prescription-drug use patterns. The Annals of Pharmacotherapy.
2002;36(1):30-39.
The purpose of this study was to summarize gender- and agerelated prescription-drug utilization patterns among a large, diverse,
commercially-insured population within the U.S. Results indicated
that most gender differences in medication use appear after or around
the puberty years. Women were more likely to use several classes
of medications, including antidepressants, anti-anxiety agents
and pain medications.
Motheral BR, Cox ER, Mager DE, Henderson RR. 2000 Prescription
Drug Atlas. January 2002.
This study was the first comprehensive state-by-state analysis of prescriptiondrug use. Age and gender have always been among the best indicators
of prescription-drug use, but results from this study show that where
one lives is also a good indicator of which and how many medications
one uses. Prescription-drug use was tracked for a random sample of
commercially-insured members who were continuously enrolled
throughout 2000. Results showed that general prescription-drug
use was lower in the Northeast and West, and higher in the South
and Midwest. Even greater variation was found when the prevalence
of prescription-drug use was evaluated for 23 of the most commonlyprescribed therapy categories. In observing prescription use for children,
the study found that children exhibited greater overall variation than
adults for most therapy classes.
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research studies
Lead Authors
Brenda Motheral, PhD, MBA, RPh
Brian Kolling, PharmD
Andy Parker, MBA
Ruth Martinez, RPh
Contributing Authors
Bernadette Eichelberger, PharmD
Raulo Frear, PharmD
Karen Leeker, MBA
Julayna Meyer, MBA, RPh
Chris Peterson, PharmD
George Van Antwerp, MBA
The authors would like to acknowledge valuable assistance from
members of several Express Scripts departments, including Clinical,
Research, Product Management, and Modeling and Analysis.
151
ordering
information
ORDERING
INFORMATION
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Express Scripts Drug Trend Report
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2004 Drug Trend Report – June 2005 ($150 per copy)
2003 Drug Trend Report – June 2004 ($100 per copy)
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