ICYMI – Two PBM reports show dramatic slowdown in medicine spending growth

Newly released pharmacy benefit manager (PBM) data show medicine spending is growing at the slowest rate in years. After accounting for discounts and rebates negotiated with biopharmaceutical companies, PBMs report that medicine spending growth in 2017 was in the low single digits or slightly negative.

• Express Scripts reported spending on medicines grew just 1.5 percent in 2017, which is the smallest increase since they started tracking spending data 25 years ago. Looking forward, Express Scripts projects a one percent to three percent annual increase in total medicine spending in the commercial market over each of the next three years (2018 to 2020).
• Prime Therapeutics reported spending on medicines in the commercial market grew -0.2 percent in 2017. Spending on medicines in Medicare Part D and Medicaid was also negative, -0.8 percent and -5.4 percent, respectively.  

So where do the discounts go? 

A previous analysis by the Berkeley Research Group found brand biopharmaceutical companies retained just 63 percent of the list price for brand medicines. The rest – nearly 40 percent – is rebated back to insurance companies, PBMs and the government, or retained by other stakeholders in the supply chain. These discounts and rebates create savings of more than $100 billion, but insurers don’t always share these savings with patients who are facing rising out-of-pocket costs when they go to the pharmacy to get their medicine.  

Patients share the costs. They should share the savings. 

Learn more at LetsTalkAboutCost.org.