A tiny but growing population of individuals with complicated illnesses and special treatment needs are accounting for an increasingly significant amount of the nation’s overall prescription drug costs, according to a report from ExpressScripts, “Super Spending: U.S. Trends in High-Cost Medication Use.”

“We live in a fortunate time when science has delivered amazing therapies and made it possible for people with complex, chronic diseases to live a little more normal life,” Glen Stettin, M.D., senior vice president, clinical, research and new solutions at Express Scripts, writes in the report’s foreword note.

“Over the past five years, 118 specialty treatments have come to market for these conditions, and the medication pipeline is rich, with about 25 new specialty drugs expected to receive approval each year for the next five years,” Stettin writes. “We’re also entering an era where customized gene therapies offer hope for a cure for serious cancers and other rare, fatal diseases. Because these therapies target small patient populations, are administered once and demonstrate premium outcomes, they will command premium prices.”

The St. Louis-based pharmacy benefit manager analyzed prescription drug use data for 134,008 members of plans it manages, and found that about 3 out of 1,000 people met or exceeded $50,000 in prescription drug costs – a 35 percent increase from 2014 – and accounted for more than 20 percent of total prescription drug costs.

Several years ago, compounded medications and new hepatitis C therapies drove much of the spending for this group, but ExpressScripts’ authors write “through our leadership in reducing drug costs,” payers in 2016 spent less on the hepatitis C therapies, and opted for safer and lower-cost over-the-counter alternatives to compounded medications.

Now, the top cost drivers are treatments for cancer, multiple sclerosis, inflammatory conditions, cystic fibrosis and other complex and rare diseases, according to the report. In 2016, more than a quarter of the prescription drug costs for people with $50,000+ in prescription drug costs were for cancer drugs.

Many of the individuals were in Medicare plans – in fact, this population was four times as common in Medicare plans than in employer-sponsored, Medicaid or exchange plans, with eight out of every 1,000 Medicare beneficiaries reaching $50,000 in prescription drug costs in 2016.

For all people with $50,000 or more in 2016 prescription drug costs, the majority of costs were borne by the employer, health plan or government entity. Employers and commercial health plans paid 97.7 percent of the prescription drug costs, similar to the portion paid by Medicare and exchange plans. Medicaid plans paid 99.9 percent.

On average, people with $50,000 or more in prescription drug costs paid $2,156.46 annually out of pocket, compared to $228.62 for those with prescription drug costs of $49,999 and less. For all patients with prescription drug costs over $50,000, 97.6 percent of costs are paid for by plans.

“While there’s more to do to make costly treatments more affordable, we’re working with payers to pull all available levers for managing spend in other areas to create headroom for covering patients who need more costly therapies,” the report’s authors write. “This includes effectively managing utilization, leveraging competition within formularies, providing greater care and clinical support, and embracing new strategies for reimbursement.”

Despite the increase in the size of this population, employers and Medicare plans held the increase in overall drug spending to just 3.8 percent and 4.1 percent, respectively, in 2016, demonstrating the effectiveness of private-sector solutions to make medicine more accessible and affordable.

Plans covered nearly 97.6 percent of the costs for people with prescription drug costs of $50,000 or more in 2016, paying an average of $89,308 per person. Payers also kept members’ total out-of-pocket cost share relatively flat. In 2016, people with $50,000 or more in prescription drug costs had average annual out-of-pocket costs of $2,156 (2.4%), excluding patient assistance from manufacturers or foundations.

Instant Insights /

Increasing number of individuals spending $50,000+ annually on prescription drugs

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