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US Spending on Traditional Prescription Drugs Fell in 2012 for First Time on Record

ST. LOUIS, March 5, 2013 /PRNewswire/ -- For the first time in more than 20 years, there was a decrease in 2012 U.S. spending on traditional prescription drugs — primarily pills people take to treat more common diseases such as high cholesterol and high blood pressure — according to new data released today by Express Scripts (NASDAQ: ESRX).


Among the country's commercially insured population, total spending on traditional prescription drugs fell 1.5 percent in 2012. However, this decline was offset by an 18.4 percent increase in spending on specialty medications to treat more complex diseases such as rheumatoid arthritis, cancer and hepatitis C. Combined, total drug trend for the year was +2.7 percent, consistent with the rate of growth in 2011.

The Express Scripts 2012 Drug Trend Report quantifies annual changes in utilization, unit costs and overall prescription drug spending, based on Express Scripts claims data. Now an online publication, the full report is available at

"The first-ever decrease in traditional drug spending is the latest chapter of an ongoing success story for our utilization management programs and for an increased interest in generic medications, home delivery pharmacy and more focused retail pharmacy networks," said Glen Stettin , MD, Express Scripts senior vice president of Clinical, Research & New Solutions.

"These same principles of effective management solutions and increased drug competition are necessary to the country's effort to rein in specialty drug costs," Stettin said. "The plan sponsors who implement our specialty management programs are already seeing much lower growth in specialty drug costs than the national average. And increased drug competition, in the form of biosimilars, is necessary to offer more affordable medication for patients afflicted with these complex specialty conditions."

A Historic First in Traditional Prescription Drug Spending

Since 1993 when Express Scripts began recording annual drug trend, 2012 marks the first year where total spending on traditional drugs declined.

  • Last year's "patent cliff" ushered in lower-cost generic alternatives for many blockbuster medications and utilization increased for eight of the top 10 traditional therapy classes, while unit costs decreased in seven.
  • For the second consecutive year, the country spent more on prescription drugs for diabetes than for any other therapy class. Diabetes drug spending increased 11 percent in 2012, driven in part by unit cost increases for popular insulins.
  • Spending on medications to treat attention disorders increased 14.2 percent in 2012. Utilization increased 8.8 percent, due largely to an increased number of adult patients. Unit costs increased 5.4 percent as a result of a 2012 shortage of active ingredients contained in many of the medications in this class.

The Increasing Challenge of Specialty Prescription Drug Spending

Specialty medications often require specialized handling or administration, frequent dosing adjustments, and intensive clinical monitoring and patient assistance. While affecting fewer than 2 percent of the general population, specialty conditions in 2012 accounted for 24.5 percent of the country's total drug spend within the pharmacy benefit, the highest percentage on record.

  • Four of the country's 15 costliest diseases in drug spend are treated with specialty medications — inflammatory conditions, multiple sclerosis, cancer and HIV.
  • Inflammatory conditions such as rheumatoid arthritis, the costliest specialty category, saw spending increase an additional 23 percent. This increase was driven by both a 9 percent increase in utilization and a 14 percent increase in unit cost.
  • At 33.7 percent, hepatitis C experienced a larger 2012 increase in drug spend than any other major therapy class — traditional or specialty. The increase is due almost entirely to two new drugs introduced in May 2011. Express Scripts projects total spending on hepatitis C medications to increase 32.3 percent in 2013 and another 56.3 percent in 2014.
  • Utilization and costs for cancer medications increased by 3.4 percent and 22.3 percent, respectively. Much of the increase in costs is driven by new drugs developed to treat unique genetic profiles, a trend that increased in recent years.
  • In 2012, the Food and Drug Administration approved 22 new specialty drugs, many of which will cost more than $10,000 per month of treatment.

New Insights Into Medicare and Medicaid Populations

The Drug Trend Report also includes annual data and new research specifically related to Medicare and Medicaid populations.

  • New research shows that physicians are more likely to prescribe generic medications to Medicare patients if the prescriber is younger, if they see a large number of Medicare patients, and if they practice in Midwestern states such as Ohio, Illinois and Michigan.
  • Due to the rise in the number of Americans seeking treatment for drug and alcohol abuse, the largest percentage increase in Medicaid drug spend is attributed to chemical dependence. With spend increasing 24.3 percent in 2012, chemical dependence for the first time is among the top 10 Medicaid traditional drug spend therapy classes.
  • Utilization of cancer medications increased 11.8 percent for Medicare patients in 2012, contributing to an overall spending increase of 32.8 percent for this population.
  • Despite a 46.9 percent increase in unit costs for hepatitis C medications, Medicare patients increased utilization of these medications by 63.5 percent in 2012. Infection rates for the virus are more prevalent among patients born between 1945 and 1965.
  • Medicaid spends more on asthma medication than prescription drugs to treat any other single condition. Total asthma spend increased 6.2 percent, driven largely by increased utilization.

Widening Price Gap in Brand-Name and Generic Medications

According to the Express Scripts Prescription Price Index, prices on a market basket of the most highly utilized brand-name medications increased 12.5 percent in 2012, far outpacing the Consumer Price Index's 2012 inflation of 1.7 percent. During the same time frame, prices of generic medications declined 24 percent. This 36.5 percentage point net inflationary effect is the largest single-year widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.

About Express Scripts

Express Scripts (NASDAQ: ESRX) manages more than a billion prescriptions each year for tens of millions of patients. On behalf of our clients — employers, health plans, unions and government health programs — we make the use of prescription drugs safer and more affordable. Express Scripts uniquely combines three capabilities — behavioral sciences, clinical specialization and actionable data — to create Health Decision Science℠, our innovative approach to help individuals make the best drug choices, pharmacy choices and health choices. Better decisions mean healthier outcomes.

Headquartered in St. Louis, Express Scripts provides integrated pharmacy benefit management services, including network-pharmacy claims processing, home delivery, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services.

For more information, visit or follow @ExpressScripts on Twitter.


David Whitrap
Office: 314-684-6514
Mobile: 314-517-3605

SOURCE Express Scripts
Copyright©2012 PR Newswire.
All rights reserved

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