What Is Drug Trend and How to Manage it

Controlling drug trend every year is always a high priority for plan sponsors who are looking for ways to make access to medications more affordable for their plans and their members..

What is drug trend and how is it calculated

Drug trend is calculated as the percentage change in total drug costs from one year to the next. Total drug costs represent the total cost of the medication (ingredient costs, taxes, dispensing fee and administrative fees) paid per person by plan sponsors and plan members.

Typically, drug trend for plan sponsors is broken out into two components: unit cost trend and utilization trend. Unit cost trend is the rate of change in unit costs due to the combined impact of inflation, discounts and drug mix. Utilization trend is the rate of change in total days’ supply of medication dispensed across all prescriptions and a good indicator of adherence.

The impact of specialty drug trend and spend

Even though less than 2% of the population uses specialty drugs, those prescriptions account for a staggering 51% of total pharmacy spending¹. Since specialty medications typically impact drug trend the most addressing the high cost of specialty medication is crucial.

At a member level, plan sponsors see an average annual cost of $38,000 to cover a specialty patient’s drugs compared to just $492 for the coverage of a non-specialty patient’s costs. That is 75x more to cover a specialty patient over the course of a year.¹ For most patients, these are life-sustaining, and even life-saving therapies, which presents the challenge of balancing affordability with the access to care.

Additionally, plans will continue to be impacted from the COVID-19 pandemic and delayed care resulting in delayed diagnoses of specialty conditions. For example, oncology patient doctor visits declined approximately 20% for some of 2021, while cancer screenings also significantly declined (mammograms by 87%, colonoscopies by 90% and pap smears by 83%). This indicates that the market is expecting a rebound of visits and specialty patients to come, which could continue to drive up specialty drug trend.

How to manage pharmacy-billed specialty drug trend and costs

Since 65% of specialty medications are paid under the pharmacy benefit, pharmacy trend controls are core strategies that all plans should have in place to manage spend now and in the future. Some of these include:

• A formulary that directs patients from costly specialty medications to clinically comparable, lower cost alternatives
• Utilization management that ensures a therapy and dosing are appropriate for the patient
• Value-based programs in high cost disease states that reimburse plan sponsors for events like early discontinuation of therapy
• Copay solutions that drive year-over-year savings for plans while offering a $0 patient out of pocket cost for most specialty therapies.
• Network optimization strategies via exclusive or limited pharmacy partnerships and channel optimization strategies to understand and route therapies to the lowest cost channel – either the pharmacy or medical benefit, depending on the therapy and other factors

By taking a more holistic view of a population’s specialty pharmacy utilization, plan sponsors can help eliminate the perpetual challenge of balancing care vs. affordability and control their overall drug trend. In fact, in 2021, plans who implemented all available Express Scripts PBM solutions to manage pharmacy-billed specialty spend saw on average -6.4% specialty trend compared to peers not applying the same strategies (7.2%)².