Generic pharmaceuticals have maintained their laggard status compared to branded and specialty drugs with respect to rising prices.
According to the Truveris National Drug Index, the price of generics rose only 1.4% during the first three months of 2015, compared to 5.7% for branded and 2.5% for specialty products.
In 2014, the inflation rates for those three drug categories were 4.9%, 14.8% and 9.7%, respectively. The combined total increase in drug prices last year was 10.9%. That exceeds the 9% general medical trend number in the U.S. (based on an AonHewitt survey), and 1.7% for the general inflation rate.
Truveris CEO Bryan Birch said the overall high inflation rate for pharmaceuticals necessitates that benefit plan managers act now to reevaluate benefit plan designs for 2016, or contemplate stop-loss insurance to cover this mounting liability.
The medical conditions associated with the highest increase in drug prices were
infertility (12.2%), menopause (8.8%) and hormone deficiency (8.5%), according a Truveris analysis. Those numbers are based on composite calculations of brand, specialty and generic medications.
In an exception to the overall pattern, generic drugs for menopause notably jumped by 11.1%, a higher inflation rate than the composite calculation.
OptumRx, a large pharmacy benefit manager that offers a stop-loss arrangement, emphasizes the prospect of spiking costs of specialty drugs. Specialty medications account for 34% of the total pharmacy spend today, but will grow to 44% over the next 15 years, the PBM estimates.
There are more than 900 biotech drugs in the development pipeline to treat cancer, infectious and autoimmune disease, HIV/AIDS and other costly conditions, according to OptumRx.
When more and more of them hit the market, some employers could face unexpectedly high claims when an employee develops a condition considered be treatable by a particular specialty drug.
The stop-loss product it recommends to PBM customers kicks in once drug spending hits 125% of expected claims, although the attachment point can be as low as 115% and as high as 130%, according to the company.
The Truveris National Drug Index is updated monthly, based on prices paid by private insurers, self-insured organizations, government, unions and uninsured patients. In March, the NDI showed increases of 0.14% for generics, 0.31% for branded and 0.41% for specialty drugs.
Truveris is a venture capital fund-backed drug analytics company on a mission to democratize data and access through technology, the company states. It uses a software-as-a-service platform to allow clients to assess PMBs and drug price trends.
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