2012 Drug Trend Data Shows 1st Spending Decline for Traditional Prescription Drugs in 20 Years

by Bert Kollaard



For the first time in over 20 years, spending on traditional prescription drugs among those with commercial insurance declined 1.5% in 2012, according to latest Drug Trend Report just released by Express Scripts.

Much of this decrease can be attributed to broader availability, growing use, and lower prices of generic medications.  While spending for brand name drugs rose 12.5% in 2012, this increase was more than offset by a spending decline of 24% for generic medicines.

* 2012 = January – December 2012 vs. same period, 2011,   Q4 = October – December, 2012 vs. same period, 2011
Source, Express Scripts 2012 Drug Trend Report

Spending on specialty medications on the other hand continued to increased during 2012, jumping 18.4%, and contributed to an overall annual prescription drug upward spending trend of 2.7%.  With the Food and Drug Administration approval of 22 new specialty medications in 2012, many of them with very high price tags, this trend is likely to continue.

In total, specialty medications accounted for 24.5% of total per member per year (PMPY) spending on prescription drugs in 2012.   Increased usage and significantly higher costs for new hepatitis C therapies, drugs for inflammatory conditions such as rheumatoid arthritis, and unique cancer treatments were key contributors.

It is also worthwhile to note that spending for diabetes prescription drugs accounted for the single biggest share of spending on any treatment class, rising 11% in 2012 versus a 7% increase in 2011.  With diabetes diagnosis increasing dramatically, according to a new study by the Centers for Disease Control and Prevention (CDC), it is likely the proportional share of overall drug spending for diabetes drugs will continue to rise in the coming years.

A great deal of more in-depth information on these prescription drug spending topics and trends can be found on the Drug Trend Report 2012 web site.