February 19, 2018

The Five Most Expensive Prescriptions for Employers

As a self-insured employer covering specialty medications, you’ve probably experienced the sad truth of the American pharmacy industry: there are no limits on how high drug companies can charge for prescriptions. Drug companies argue that high prices cover innovation and research, but examples like Daraprim and EpiPen’s price hike tell a different story.

Costs of prescription drugs are expected to increase at double-digit rates, leading organizations to scramble to find ways to save money. Here’s where data comes in. Employers and consultants can use Rx claims data to find cost drivers, make formulary adjustments, and keep drug costs reasonable for employers and employees.

Using the Artemis Platform, we were able to figure out the priciest prescriptions employers are covering under their plans.

Let’s take a look.

From our data, we can see the the most expensive prescriptions are:

  • Humira
  • Embrel
  • Gilenya
  • Tecfidera
  • Truvada

The drugs on this list are specialty medication: drugs used to treat chronic illnesses. Some speciality medications require special handling, monitoring or approval before they are prescribed. Looking at the graph, we see that twenty eight people take Humira, costing the employer $895,806. That is a whopping $31,993 per person!

So why are these drugs so expensive?

Both Humira and Enbrel, used to treat rheumatoid arthritis, fall in the class of drugs called “biologics.” These are speciality drugs that are manufactured from a living organism like a plant or animal cell or human tissue.

The drug manufacturers argue that biologic drugs are incredibly complex and sometimes impossible to replicate. Because of this, the FDA has labeled generic versions of the drugs as “biosimilars,” rather than generics. This distinction delays these medications from entering the market because pharmaceutical companies that create biosimilars need to prove that their products create the same effects as the drug they are replicating, forcing them to fund case studies and tests with real patients.

In the case of Gilenya and Tecfidera, used to treat MS flare-ups, competition in the speciality medication market can also actually drive costs up. According to the American Academy of Neurology, the change of price for MS treatments from $8,000 to $60,000 per year was a result of new disease-modifying therapies (DMT) entering the market with a higher price point and as a result, older therapies increased their prices to match their competitor.

Patents are also an issue. According to the New York Times, while the main patent of Humira expired the end of 2016, AbbVie, the company behind Humira, has amassed about 70 new patents covering the drug that could keep away biosimilars until 2022.

Truvada, a prescription to help prevent HIV infections in people who are HIV negative, is a combination of two HIV antiretroviral drugs: emtricitabine and tenofovir. Combining these drugs together creates a treatment therapy known as pre-exposure prophylactics or PrEP. As of 2017, Truvada is the only FDA approved HIV prevention therapy on the market. When taken consistently, Truvada has been shown to reduce the risk of HIV infection in people who are at high risk by up to 92%.

A prescription for Truvada cost $17,258 per person a year in the U.S. in 2017. Compare this to a generic version of the pill sold in India that costs $67 per person.

The manufacturer of Truvada, Gilead, owns U.S. patents for emtricitabine and tenofovir, which are both needed to make Truvada. While their patent for tenofovir expired late 2017, their patent for emtricitabine does not expire until 2021.

So the question is how can employers protect themselves from the high cost of specialty medications like these?

In our Artemis infographic, we discussed ways to avoid overspending on speciality medication. Some of these tips include:

  • Ensuring your employee is diagnosed properly and if the speciality medication is appropriate for managing their chronic condition.
  • Reviewing and comparing dosage strengths to make sure they are receiving the proper quantity of medication.
  • Monitoring therapies to review treatment duration for speciality medications to avoid Rx overfills and minimize waste once the therapy is discontinued.

Speciality drugs can drive up employer healthcare costs, but there are ways to address this spending. Data analytics is the first step to finding what kinds of specialty drugs are being prescribed, how many employees are using these medications, and how these drugs impact your healthcare spend. They say an apple a day keeps the doctor away. We’d add that robust health data analytics also keep the inefficient spending away.

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