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Diabetes Drugs Emerge as Top Force in Drug Spending Growth

- Generics Lead to Plunge in Cholesterol Drug Spending Despite Higher Use -

- Cancer Drug Spending Seen Surging 46-53 Percent Through 2010 -

- Drug Trend Drops to All-time Low 2 Percent -

FRANKLIN LAKES, N.J., May 15 /PRNewswire-FirstCall/ -- Diabetes treatments are now the leading driver of prescription drug spending growth, displacing lipid-lowering drugs which fell precipitously after a decade of reigning in the top position, as generic drugs cut the cost of treating high cholesterol. These new findings were reported by Medco Health Solutions Inc. (NYSE: MHS), the nation's leading pharmacy benefit manager, in its just-released 2008 Drug Trend Report, a comprehensive analysis of prescription drug spending and utilization.

The report shows that despite continued growth in the use of cholesterol drugs, spending fell 8.5 percent in 2007 as usage of lower-cost generic versions of Pravachol and Zocor expanded in the marketplace, resulting in lipid-lowering medications experiencing the greatest spending decline of all drug categories. Meanwhile, spending on diabetes drugs increased 12 percent due to shifts toward higher-cost treatments, brand-name drug price inflation, and moderate growth in the number of patients receiving treatment.

For a decade, cholesterol drugs were the largest driver of drug trend -- a measure of spending growth for pharmacy benefit plans. These medications still account for a sizable 10.8 percent of all prescription costs with utilization rising 5.9 percent last year as new clinical guidelines expanded the population that can benefit from these treatments.

"Generic drugs have been a tremendous asset in controlling runaway health care costs," Medco Chairman and CEO David B. Snow Jr. said. "Generic cholesterol medications have helped contain our drug trend to a new all-time low of 2.0 percent. Patients and our clients are reaping the benefits of generics as we enable them to hold down costs and make prescription drugs one of the few areas where spending trails overall health care inflation."

Diabetes patients move away from older treatments

While utilization of diabetes medications only increased a moderate 2.3 percent during 2007, the cost of diabetes treatments rose sharply as patients shifted to newer drugs. These recently introduced medications have advantages over older drugs since they are faster-acting and can help patients better maintain consistent blood sugar levels to prevent complications from the disease. A sharp drop in Avandia use due to safety concerns, withdrawal of an inhalable form of insulin, and declining unit costs for many generic versions of diabetes drugs were not enough to offset the trend toward higher-cost treatments.

"The diabetes epidemic and the introduction of new products are reshaping prescription spending patterns," said Medco Chief Medical Officer Dr. Robert S. Epstein. "The number of people diagnosed with diabetes is increasing by about a million patients per year -- meaning more people need complex drug therapies to control their blood sugar. While medications are critical for controlling the disease, many of these cases could have been prevented or delayed with lifestyle changes, such as diet or exercise."

Two- or three-drug combinations are frequently being used to reduce the complications associated with diabetes, which affects about 21 million Americans. However, only 7 percent of patients with the disorder achieve target goals for blood glucose, cholesterol and blood pressure.

Reflecting the need for advanced pharmacy care, the Medco Therapeutic Resource Centers(R) (TRCs) with more than 1,100 specialist pharmacists, were developed to help patients with diabetes and other chronic and complex conditions. Specialist pharmacists help address prescription safety, medication compliance, and side effects, and engage patients and physicians about other elements of care. Specialist pharmacists help patients with diabetes manage their complex drug regimens and supply needs, as well as the monitoring of the disease itself. The Medco Diabetes Resource Center was a finalist in URAC's Best Practices in Consumer Empowerment and Protection for its initiatives to show how specialist pharmacists can improve patient safety in the dispensing of supplies for diabetes patients.

Specialty drug trend decelerates

Medco's 2008 Drug Trend Report also reveals that specialty drug spending continues to grow rapidly, but at a slowing rate. Spending rose 12.3 percent in 2007, with specialty drugs accounting for 11.4 percent of all pharmacy plan spending, an increase from 10.4 percent last year. Autoimmune conditions, cancer, multiple sclerosis and respiratory conditions were key drivers of specialty drug trend. Declines in spending for anemia and hepatitis C treatments helped mitigate some of the growth.

"Specialty drugs, which span many categories of treatments, were the largest contributor to drug trend last year," Epstein said. "These high-cost treatments can be life-changing for people with complex conditions and highlight the important innovations coming from the biotech industry. However, the use of these drugs needs to be managed so people gain the full benefit of treatment in a cost-efficient way."

The overall rate of specialty drug trend has slowed in recent years. In 2006, Medco reported a 16.1 percent growth rate and as recently as 2003, the rate was 26.6 percent. However, cancer treatments are expected to continue rapid spending growth, driven by increased use of costly targeted therapies. Spending for oncology agents is expected to increase 46 to 53 percent through 2010 on a compounded basis, driven by treatment regimens with monthly costs that can exceed $10,000.

Specialty drug utilization increased 3.9 percent in 2007. This increase stemmed from the introduction of new specialty medications, new indications for drugs currently on the market, and a wider use of multiple-drug therapy for some conditions. A portion of the utilization growth reflects client efforts to shift some specialty drug coverage to the pharmacy benefit rather than under major medical insurance, a move that can help control costs.

Drug safety concerns cause declines

Health risks from prescription drugs had a significant bearing on spending and utilization on antidepressants, hormone replacement therapy and specialty anemia treatments:

* Safety warnings on Procrit(R), Epogen(R) and Aranesp(R) -- a group of

drugs designed to improve red blood cell counts -- have led to a 15.1

percent drop in spending in this category. These drugs are often used

to treat anemia in patients with cancer or kidney disease, but a study

showed these drugs may be detrimental in many patients with these


* An 8.4 percent decrease in spending on antidepressants reflects a

decline in unit costs with generic versions of Zoloft(R) and Wellbutrin

XL(R) entering the market. The use of antidepressants increased slowly

during 2007, which may continue to reflect concerns about the possible

risk of suicidality in children and young adults that surfaced in 2005

with Food and Drug Administration (FDA) warnings;

* Use of hormone replacement therapy (HRT) has been on the decline over

the past six years over health risk concerns, and it fell an additional

9.2 percent in 2007. The Women's Health Initiative first reported

increased risk of heart attack and stroke in 2002.

About Medco

Medco Health Solutions, Inc., (NYSE: MHS) is the nation's leading pharmacy benefit manager based on its 2007 total net revenues of more than $44 billion. Medco's prescription drug benefit programs, covering one-in-five Americans, are designed to drive down the cost of pharmacy health care for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by the Medicare Part D Prescription Drug Program. Medco, the world's most advanced pharmacy(TM), is positioned to serve the unique needs of patients with chronic and complex conditions through its Medco Therapeutic Resource Centers(R); its diabetes pharmacy care practice, Liberty Medical; and its specialty pharmacy operation, Accredo Health Group, Inc. Medco is the highest-ranked independent pharmacy benefit manager on the 2007 Fortune 500 list. On the Net: .

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

SOURCE Medco Health Solutions Inc.
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