Hepatitis Pills Spark Biggest Jump In Drug Costs In A Decade

New pills to treat hepatitis C that are hailed for their effectiveness and bemoaned because of their costs were a big contributor to a 13 percent increase in drug spending last year, according to a new report from drug benefit firm Express Scripts (ESRX).

It was the biggest percentage increase in total spending on prescription drugs in more than a decade, said Express Scripts, which administers drug benefits for some of the nation’s largest employers. Excluding hepatitis C pills and compounded medications, Express Scripts said the year over year increase in per capita drug spending was just 6.4 percent.

“For the past several years, annual drug spending increases have been below the annual rate of overall healthcare inflation in the U.S., but that paradigm is shifting dramatically as prices for medications increase at an unprecedented and unsustainable rate,” Dr. Glen Stettin, Express Scripts senior vice president of clinical, research and new solutions said in a statement accompanying the report.

The pharmacy benefit manager’s 2014 drug trend report, released today, showed hepatitis C pills accounted for almost half of the percentage increase in so-called “specialty drug spend.” Specialty prescriptions, which are generally high cost biologic drugs to treat everything from multiple sclerosis to cancer accounted for almost one-third of total drug spending, the Express Scripts report said.

Hepatitis C pills Harvoni and Sovaldi, which are sold by Gilead Sciences (GILD), and Viekira Pak, sold by Abbvie (ABBV), are triggering pharmacy benefit firms like Express Scripts, CVS/Caremark (CVS), health insurers and Medicaid programs to negotiate exclusive deals with one drug maker or the other to blunt the costs of pills that are $1,000 each. In some states, Medicaid programs are severely restricting access to such Hepatitis C pills or not covering them at all.

Express Scripts struck a deal with Abbvie that is reportedly much below Viekira’s $83,000 list price for a 12-week course of treatment though neither Abbvie nor Express Scripts would disclose the size of the discount. Express Script said the deal, which excludes Gilead drugs on the preferred list of medicines known as a formulary, would save its customers $1 billion in 2015. Express Scripts’ deal with Abbvie wasn’t signed until the end of 2014.

Express Scripts, which manages pharmacy benefits for 85 million Americans, said its annual drug trend report looked at more than 750 million pharmacy claims, or more than half of its “entire book of business,’’ a company spokesman said.

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