Medco 2010 Drug Trend Report

Today, Medco Health Solutions released their 2010 Drug Trend Report (which looks at 2009 data). I haven’t had time to read the entire report, but here are a few highlights and comments from a conference call:

  • Overall drug trend was 3.7%. [They use their top 200 clients for analysis.]
    • Trend was 0.1% for clients with greater than 50% spend at mail.
    • Trend was 1.7% for Medicare.
    • [I still point out here that the question is whether trend is good or bad.] Dr. Epstein and David Snow pointed out that they work with clients on this to track metrics on adherence at the TRCs (Therapeutic Resource Centers) and report on this. The key here is knowing what classes show measurable impact to overall costs and outcomes by improving adherence and increasing costs.
    • Another point I thought was interesting was a comment that if the FDA saw the actual adherence on some drugs that require sustained utilization to achieve an outcome that they might make different decisions about drug approvals.
  • Inflation for branded drugs was 9.2% which was the highest in a decade. Generic inflation was 0.3%.
    • On a conference call, David Snow validated that this was associated with the tax on brand pharma so yes the high inflation on brand drugs was tied to reform. Someone asked a question about patent expiration (which historically drives prices up), but that doesn’t explain all the inflation here.
  • They saw a 3.4% increase in generic utilization.
  • Prescription utilization was up a minor 1.3%.
    • 5% for children 0-19.
    • 0.2% for seniors.
  • Specialty drug spending continued its rapid growth with a 14.7% increase including a 2.6% utilization increase.
  • Diabetes continues to be the largest driver of drug trend representing 16.7% of all drug spending and grew by 11.1%. [We can expect to see this continue to grow as more pre-diabetics are diagnosed.]
  • H1N1 drove up antiviral spending by 15.7%.
  • Pediatric use of medications grew faster than other groups.
  • 1 in 4 insured kids now take a medication for a chronic condition.
  • Increased utilization in kids occurred in diabetes, asthma, antivirals, ADHD, cancer, and rheumatology drugs.
    • There was a huge increase in diabetes over the decade (5x the adult population) and this was especially true with adolescent girls.
    • It’s amazing to me that you now have kids on lipids (high cholesterol), but it’s clearly an indication of the obesity issue. [We’re just at the tip of iceberg.]

  • ADHD surged for those under 35 – 9.1% increase in use leading to a 23.8% increase in spending.
    • The CDC says that 5M kids age 3-17 have and ADHD diagnosis.
    • [The other issue here is abuse of ADHD drugs.]
  • They also mention Nuvigil as a drug that could gain popularity for treating jet lag.
  • They forecast the drug trend will rise 18% thru 2012 driven largely by diabetes, oncology, and rheumatology.
  • About $46B in brand drug sales are scheduled to go generic by 2012.
  • They don’t expect biosimilars to impact the market until after 2012.
  • Not surprisingly, they showed a high correlation between states with frequent sleep deprivation and high drug utilization. As I’ve talked about many times, lack of sleep drives obesity which is highly correlated with many conditions. They also found a notable overlap of the use of Provigil (as stimulant used to treat daytime sleepiness associated with sleep apnea). [Seems like a drug that could get abused by college students like ADHD.]

“While H1N1 caused a spike in antiviral use among children last year, the far more alarming trend since the beginning of the decade is the increasing use of medications taken by children on a regular basis and in some cases, for conditions that we don’t often associate with youth, such as type 2 diabetes,” said Dr. Robert S. Epstein, Medco’s chief medical officer and president of the Medco Research Institute.  “The fact that one-in-three adolescents are being treated for a chronic condition points to the need for additional health education and lifestyle changes that can address the obesity issue that is likely a driving force behind such conditions as type 2 diabetes and even asthma.”

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One Response to “Medco 2010 Drug Trend Report”

  1. George,
    Did you find it interesting to compare the trend by age group with their overall trend. The only way they can get a 3.7% overall trend is if 90% of their population is over age 50. Unlikely.
    If you apply a standard age distribution for the US population, their trend is more likely over 6%. Appears they are using an average of average instead of a weighted trend – actual PMPY change in costs.
    Their numbers are never comparable to other PBMs, now we know why….

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