A New Normal? 870,000 Americans Used $50,000 Worth or More of Prescription Medicine in 2016

- New Express Scripts research shows in 2016, an estimated 870,000 Americans reached or exceeded a yearly medication cost threshold of $50,000, up 35 percent from 2014.

- Less than one-third of one percent of the U.S. population accounted for an estimated $80 billion of total U.S. drug spending.

- Despite the increase of this population, employers and Medicare plans experienced low year-over-year increases in overall drug spending in 2016, demonstrating the effectiveness of private-sector solutions to put medicine within reach of patients.

- Employers, insurers and government payers covered 98 percent or more of the costs for people whose prescription medication costs reached or exceeded $50,000 in 2016.

- In 2016, two out of every one million Americans had pharmacy costs of at least $1 million.

News provided by

Express Scripts

Oct 03, 2017, 06:00 ET

ST. LOUIS, Oct. 3, 2017 /PRNewswire/ -- A small but steadily growing number of Americans account for an increasingly significant amount of the nation's overall prescription drug bill, according to new research released today by Express Scripts (NASDAQ: ESRX).

The latest edition of the company's report, Super Spending: U.S. Trends in High-Cost Medication Use, examines trends for people with commercial, Medicare, Medicaid and Health Insurance Exchange coverage who had annual medication costs at or exceeding $50,000 in 2016.

Between 2014 and 2016, the number of people representing annual medication costs of $50,000 or greater increased by 35 percent. In 2016, about 3 out of every 1,000 people in the analysis accounted for more than 20 percent of total pharmacy spending. Extrapolating these data to the U.S. population, an estimated 870,000 Americans accounted for $80 billion of 2016 U.S. pharmacy spend.

Prescription drug cost category	Percent increase in population 2014-2016
$50,000-$99,999	40%
$100,000-$199,999	36%
$200,000-$499,999	56%
$500,000-$999,999	85%
$1 million+	100%

In contrast, nearly 83 percent of the people in the analysis generated less than $1,000 in annual drug costs in 2016, including 32 percent who had no drug costs at all.

"At a fraction of a percent of all Americans, this population may seem small. However, every person in America is on a first-name basis with at least one other person – a relative, friend, or colleague – who has annual drug costs that are nearly the same amount as the median U.S. household income," said Glen Stettin, M.D., Senior Vice President, Clinical, Research and New Solutions at Express Scripts.

This updated research also reveals a significant shift in what is driving spending among the population of people with high annual pharmacy costs. In 2014, compounded medications and new hepatitis C therapies drove much of the spending among people with $50,000 or more in annual pharmacy costs. In 2016, through our leadership, the cost of hepatitis C therapies declined and spending on compounded medications -- which have safer and lower-cost alternatives – virtually disappeared from this population, and treatments for cancer, multiple sclerosis, inflammatory cystic fibrosis and other complex and rare diseases emerged as the more prominent conditions in this population.

In 2016, more than a quarter of the medication costs for patients reaching or exceeding the $50,000 threshold were for cancer treatments.

"The good news is much of the spending at these levels is focused on treatments for rare and serious complex conditions with limited treatment options," said Stettin. "As we help payers effectively manage utilization and leverage competition, we create the headroom necessary to afford more costly therapies, as we saw with our commercial and Medicare plans that held year-over-year drug spending to just 3.8 percent and 4.1 percent, respectively, in 2016.

"However, employers, insurers and government payers, who absorb 98 percent or more of the costs, still need relief when it comes affording to care for this population. Lowering costs will require new entrants in categories with limited competition, more responsible pricing for these rare and complex therapies, and potentially different reimbursement strategies."

Cost Sharing
People with annual pharmacy costs exceeding $50,000 were four times as common in Medicare than in an employer-sponsored, Medicaid or Exchange plan, with eight out of every 1,000 Medicare beneficiaries reaching that threshold in 2016.

Plans covered nearly 98 percent of the costs for people whose prescription drug bills exceeded $50,000 in 2016, paying an average of $89,308 per person. For this population covered by Medicaid, 99.9 percent of the costs were covered in 2016.

Payers shouldered the majority of the cost burden, and kept members' total out-of-pocket cost share relatively flat. People with $50,000 or more in drug costs were responsible for 2.4 percent of their total 2016 pharmacy costs. The average annual out-of-pocket cost for this population was $2,156 in 2016, which may not account for manufacturer or foundational payment assistance.

Breaking the Million Dollar Barrier
People with $1 million or more in annual pharmacy spend are no longer one in a million: the number of Americans reaching that amount, while rare, doubled between 2014 and 2016.

Hereditary angioedema (HAE), a rare disorder characterized by recurrent and often life-threatening episodes of severe swelling, was the leading indication for treatment for people with $1 million in annual pharmacy costs in 2016, followed by enzyme deficiency disorders and hemophilia. There are only six approved therapies to treat the approximately 6,500 people in the U.S. who have HAE, with the cost ranging from $12,000 to $2 million per treatment. Prior to the discovery of these medications, one-third of people with HAE died of asphyxiation due to swelling in their airways.

Super Spending Across Generations
Baby Boomers (people aged 53 to 71) continued to account for nearly half of all Americans with annual pharmacy costs at or exceeding $50,000 in 2016, followed by Generation X (people aged 34 to 52), who accounted for a quarter of that population. Oncology, multiple sclerosis, inflammatory conditions and hepatitis C treatments are the leading spend drivers for both generations in this high-cost population.

Millennials (people aged 14 to 33) accounted for 10 percent of the population of Americans with $50,000 or more in annual pharmacy costs in 2016. The largest proportion of spend for this generation was for medications that treat cystic fibrosis.

Oncology treatments dominated spending among the Greatest Generation (people aged 73 or older), who had more than $50,000 in annual pharmacy costs last year.

About the report
The analysis examined the de-identified prescription drug claims for more than 26 million Americans with pharmacy coverage provided by an employer, Medicare, Medicaid or Exchange plan, and managed by Express Scripts, between 2014 and 2016. The analysis looked at gross cost, which includes both plan and patient out-of-pocket costs, after rebates.

To review the full report, please visit lab.express-scripts.com.

About Express Scripts
Express Scripts puts medicine within reach by practicing pharmacy smarter – taking bold action, delivering specialized care, creating innovative solutions and leveraging data insights - to make better health more affordable and accessible.

Headquartered in St. Louis, Express Scripts provides integrated pharmacy benefit management services, including network-pharmacy claims processing, home delivery pharmacy care, specialty pharmacy care, benefit-design consultation, drug utilization review, formulary management and medical and drug data analysis services. Express Scripts also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services.

For more information, visit Lab.Express-Scripts.com or follow @ExpressScripts on Twitter.

Media Contacts:
Jennifer Luddy, Express Scripts,
908-794-9226,
[email protected]

SOURCE Express Scripts