In 1998, pharmacy benefit costs increased 16.8 percent, the largest increase on record, according to a drug trend analysis from Express Scripts. Price increases alone accounted for nearly one-third of the benefit cost growth, the first time inflation has played such a prominent role in driving up the total pharmacy benefit cost.
The 1998 Drug Trends report is based on the Express Scripts prescription database representing drug usage for a monthly average of 7.2 million managed care and non-managed care members in 1997, and 8.8 million members in 1998.
According to the report, the PBM's 1998 annual per-member cost on an AWP basis before co-payments, discounts and active management was $329.48, up from $282.48 in 1997, an increase of 16.8 percent. The increase proportionately reflects increases in both utilization and per-prescription costs.
This year the per-prescription cost accounted for the largest piece of the increase- roughly two-thirds, said Fred Teitelbaum, Ph.D., vice president of outcomes, research and cost management at Express Scripts. This was driven by an increased inflation rate of 5.1 percent-double the 2.4 rate in 1997, and the largest since Express Scripts began tracking this in 1993.
All but one of the 50 most-prescribed drugs in the United States had a price increase between Jan. 1, 1997, and December 1998, the report noted-with many of the drugs seeing increases several times and often by double digits. The drugs with the largest price changes were Synthroid (20.4 percent), Vancenase (19 percent), Cipro (16.7 percent), Premarin (15.1 percent) and Rhinocort (15.8 percent).
Four therapy classes experienced rates of inflation greater than the fastest growing class of 1997, thyroid, which grew at 8.6 percent. The anti-anxiety class experienced by far the highest inflation rate in 1998--28.3 percent, primarily because of the 55.2 percent increase in the cost of generic anti-anxiety products combined, the report found.
The second-highest inflation rate was the 12.2 percent increase in the thyroid class, followed by diuretics, which had 10.4 percent inflation. Estrogens, dominated by Premarin and Prempro, had price increases that were among the most aggressive, the report noted, with an increase of approximately 13 percent between January 1997 and December 1998 for these drugs, and an 8.7 increase overall. Dermatologicals, especially products for the treatment of acne, rounded out the top five, with an inflation rate of 8.1 percent.
Utilization of common drugs, another component of the cost trend analysis, grew 3.4 percent, from 7.4 prescriptions per-member-per-year in 1997 to 7.7 PMPY in 1998. Of the top 25 therapy classes ranked by the number of prescriptions dispensed in 1998, six cough/cold/penicillins, anti-asthmatics, NSAIDs, calcium channel blockers and cephalosporins experienced declines in utilization.
Classes of drugs that had double-digit growth in utilization from 1997 to 1998 were antihistamines (17.5 percent), antihyperlipidemics (16.3 percent), antidepressants (11.5 percent) and antidiabetics (11.5 percent). The antihypertensive class maintained its position as the most used therapeutic class in 1998, growing by 9.7 percent.
Barrett Toan, chief executive of Express Scripts, noted that while there is no panacea for stemming the rise in drug costs, plan sponsors that actively managed their pharmacy benefit were able to cut cost increases in half by encouraging the use of lower cost but equally effective drugs.
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