Express Scripts Outcomes Conference Begins

As with each annual Outcomes conference, Express Scripts (ESRX) has released their annual trend numbers. Here are a few of the highlights from the press release:

  • Overall pharmacy trend = 3.0% (down from 5.5% in 2007)
  • Estimate consumers and employers are paying $42B too much in 13 therapy classes by not optimizing generics.
  • On average, a generic drug is over $90 cheaper than a brand name drug.
  • Generic drug usage increased by 7.5 percent, while utilization of brand name medications decreased 11 percent.
  • 67.3 percent of all prescriptions that Express Scripts filled were for generic drugs by the end of 2008. [I didn’t like the comparison which was an average across the 12 months ending in Sept 2008 from IMS of 63.7%…not apples to apples.]
  • In 2009, at least 20 branded drugs are expected to become available generically.
  • Over the next five years, more than $66 billion worth of branded drugs are expected to lose patent exclusivity.

“Using generic drugs that are safe and effective can help lower costs while still driving value for patients and employers,” said Steven Miller, MD, senior vice president and chief medical officer at Express Scripts. “Our results indicate that cost control is achievable through careful management of appropriate use of drugs and delivery channels, without shifting costs to consumers. Although the trend is the lowest it has been in over a decade, significant opportunity to lower spending still exists.”

“Finding ways to reduce spending without compromising health outcomes is the top priority for healthcare reform, as the Obama administration recognizes,” said Alan Garber, MD, PhD, Henry J. Kaiser Professor and director of the Center for Health Policy at Stanford University. “We have long used financial incentives to try to eliminate waste. Now we’re finding that tools that build upon the insights of behavioral economics and psychology can have powerful, positive effects.”

“In today’s economy, we are not only tracking wasteful spending across the country but developing strategies to reduce it,” said George Paz, chief executive officer at Express Scripts. “By applying the principles of behavioral economics we are helping consumers make better and more cost-effective healthcare decisions. We understand we cannot eliminate waste alone and we are committed to working alongside likeminded organizations, such as the Federal Coordinating Council for Comparative Effectiveness Research, to continue to identify strategies to improve our healthcare system.”

“Studies have repeatedly shown that people work much harder to avoid losses than to pursue gains,” said Bob Nease, PhD, the company’s chief scientist. “This suggests that a ‘stop wasting money’ message is more effective than a message focused on potential savings. In addition, by applying evidence-based segmentation, we have practical insight into which members are likely to be most sensitive to loss aversion. One size does not fit all.”

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