Blue Cross Blue Shield Association Study Shows Rising Costs for Patent-Protected Drugs Drives Growth of Pharmaceutical Spending in the U.S.

CHICAGO - Rising costs for patent-protected drugs are driving double-digit annual growth in pharmaceutical spending in the U.S., according to a new study by the Blue Cross Blue Shield Association (BCBSA).

The report, "Rising Costs for Patented Drugs Drives Growth of Pharmaceutical Spending in the U.S.," analyzes seven years of drug utilization, price changes and overall spending. It shows that prescription drug spending has increased 10 percent annually for Blue Cross and Blue Shield (BCBS) members since 2010, an overall rise of 73 percent.*

"This upward trend is due to a small fraction of emerging, patented drugs with rapid uptake and large year-over-year price increases that are more than offsetting the continued growth in utilization of lower-cost generic drugs," said Maureen Sullivan, chief strategy and innovation officer for BCBSA. "Current trends suggest that this rapid rise in drug trend costs is likely to continue in future years."

"This upward trend is due to a small fraction of emerging, patented drugs with rapid uptake and large year-over-year price increases that are more than offsetting the continued growth in utilization of lower-cost generic drugs," said Maureen Sullivan, chief strategy and innovation officer for BCBSA. "Current trends suggest that this rapid rise in drug trend costs is likely to continue in future years."

Other key report findings include:

• Over the past seven years, generic drugs increased from 66 percent to 82 percent of total prescriptions filled, while brand drugs' share of total prescriptions declined from 34 percent to 18 percent. The rising cost of brand drugs has allowed these prescriptions to maintain the vast majority of total drug spending, at 78 percent, roughly the same proportion brand drugs held in 2010.
  
  
• The cost of brand drugs with patent protection and no generic alternatives is rising at an average annual rate of 25 percent (and 285 percent since 2010), more than double the 10 percent average annual rate of spending for all drugs. These patent-protected drugs now make up 63 percent of total drug spending, up from 29 percent of total spending in 2010, despite the fact that they comprise less than 10 percent of total prescriptions filled.
  
  
• A list of the top 25 patent-protected drugs in terms of spending in 2015 demonstrates dramatic increases in spending. For example, spending on the drug Gilenya** increased 30,257 percent over a seven-year period.

This is the twelfth study of the Blue Cross Blue Shield, The Health of America ReportSM series, a collaboration between the Blue Cross Blue Shield Association and Blue Health Intelligence, which uses a market-leading claims database to uncover key trends and insights into health care affordability and access to care.

For more information, visit www.bcbs.com/healthofamerica.

* The report examines the medical claims of more than 30 million BCBS commercially-insured members per year (non-Medicare) and more than $208 billion in prescription spending from January 2010 through September 2016. Unit prices were computed as the total cost of the prescription divided by the days supplied, or the average daily price of the prescription.

** All product names, logos and brands are property of their respective owners and used for identification purposes only. Use of these names, logos and brands does not imply endorsement.

About Blue Cross Blue Shield Association
The Blue Cross and Blue Shield Association is a national federation of 36 independent, community-based and locally-operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for one-in-three Americans. BCBSA provides health care insights through The Health of America Report series and the national BCBS Health Index. For more information on BCBSA and its member companies, please visit bcbs.com. We also encourage you to connect with us on Facebook, check out our videos on YouTube, follow us on Twitter and check out The BCBS Blog.

About BHI
Health Intelligence Company is the nation's premier health intelligence resource, delivering data-driven insights about healthcare trends and best practices, resulting in healthier lives and more affordable access to safe and effective care. HIC accesses healthcare claims data from more than 140 million individuals nationwide, collected over nine years, in a safe, HIPAA compliant and secure database. The resulting conformed, reliable data set has the broadest, deepest pool of integrated medical and pharmacy claims, reflecting medical utilization in every ZIP code. Health Intelligence Company, LLC operates under the trade name Blue Health Intelligence (BHI) and is an Independent Licensee of BCBSA. For more information, visit http://www.bluehealthintelligence.com/.