Express Scripts Drug Trend Highest Among Trend Reports

I am sure there is a project at Express Scripts right now to figure out how to position this in the industry. I personally would go for claiming better adherence drives up drug trend (see prior post).

With five major drug trend reports out (Express Scripts, CVS Caremark, Medco, Walgreens, and Prime Therapeutics), there is only one more that I expect – SXC. I’m sure someone else could come into the market with a report, but it’s a lot of work.

The trend numbers so far are:

  • 3.2% for Walgreens
  • 3.4% for Prime Therapeutics and CVS Caremark
  • 3.7% for Medco
  • 6.4% for Express Scripts

Does anyone really care? Should they?

On the one hand, it’s a good marker, but the companies each have different mixes of clients (Medicare, Medicaid, Employer, Managed Care, Government). They also have different mixes of clients by geography. All of these things matter.

I would personally argue that we need a different key metric for the industry. The one challenge Express Scripts faces is that they really drove this metric for years and were able to set the standard. Now, they may be caught up in that legacy.

Some of the metrics that are used to compare PBMs:

  • Generic fill rate – this is meaningful in that traditional PBMs make more money on generics but definitely subject to client mix
  • Mail order penetration – this is meaningful in that it drives several other metrics and is where PBMs make money
  • Drug trend – this is relevant in a traditional PBM sense that lower trend is better
  • Cost share – this has held pretty flat for years while the absolute value has gone up
  • Mail order satisfaction – this is generally a measure that everyone has as high and touts
  • Client retention – it seems like everyone has high marks here while clients obviously move around
  • Mail order fill accuracy – everyone’s at 99% plus so you get to differentiate at the six sigma versus two sigma level (which in scale matters)

I personally think average client cost per claim processed is a better measure. It takes into account drug mix (brand / generic). It takes into account rebates and rebates provided to clients. It takes into account retail mix (30 / 90 day) and mail order. It takes into account plan design.

I also think creating an average MPR (medication possession ratio) would be a relevant metric that more closely mapped to health outcomes and would still be within the PBMs sphere of influence. They can drive awareness and help with adherence programs thru the consumer, the pharmacy, and the prescriber.

I’m also a big fan of key metrics like:

  • 1st call resolution
  • Average inbound calls per claim processed (mail versus retail)
  • Web utilization – # of registrants AND average visits per registered member per year

3 Responses to “Express Scripts Drug Trend Highest Among Trend Reports”

  1. I vote for net client costs per adjusted script = sum of gross costs per adjusted script + recieved rebates per adjusted scripts + management cost per adjusted script.

    Costs PMPY would not be fair as this includes adherence and the more adjusted script PMPY is a good thing.

    The larger PBMs can drive down net costs per adjusted script through negotiating clout with retailers and mail order scale. But smaller PBMs can neutralize scale by driving a higher generic dispensing rate and allowing for 90 day retail.(even thous this results in less rebates per adjusted Rx)

    Comparing large and small PBMs on the basis of net costs per adjusted script would likely expose the myth of scale as a factor in overall Rx cost containment.

  2. I’m going to make my prediction here that next year’s process for calculating trend at ESRX will change. With Brenda Motheral gone and her protege Emily Cox now gone, I think their Drug Trend Report will become more of a marketing tool and less of a research tool. I could be wrong, but I don’t think they want to have the highest trend. That has been a source of pride for years.

    • Agree. You could see it morphing into a marketing report over the past couple of years, I think as a response to Medco’s report, which was always marketing-focused. Sad for those of us who worked to make it the reference research report in the industry. I think the life cycle is about over for these reports, given the different payment methodologies emerging.

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