Orphan Drugs: 2013 By The Numbers
Two recent 2013 drug trend reports are trending on the Internet. This Blog Post discusses both reports and the 2013 trends in orphan and specialty drugs.
A March Blog Post presents the Medical Marketing & Media (MM&M) article that discusses orphan and specialty drugs and what the future holds for this category of drugs in the United States. Per the article, as orphan and specialty drugs increase over the next few years along with drug prices for these medicines, insurers will need to find a way of minimizing the expense to both patients and to themselves. Also at issue, is the increase in the difficulty of obtaining these medicines for the patient.
Some interesting statistics gathered from the MM&M article:
• Specialty drugs are the fastest-growing segment of healthcare expenses
• Specialty drugs are growing at an annual rate of 15% – 20%
• In 2020, specialty drugs are expected to be 40% of total drug costs
• In the United States, specialty drug spending is estimated to increase 67% by the end of 2015, while non-specialty drug spending is estimated to decrease 4%.
I – Express Scripts Report
Express Scripts, headquartered in Missouri, is one of the largest Pharmacy Benefit Management (PBM) organizations in the United States. The company provides PBM services such as:
• Network-pharmacy claims processing
• Home delivery pharmacy services
• Specialty PBM
• Drug formulary management
• Drug and medical data analysis to manage PBMs for health plans.
Express Scripts publishes annually since 1997, The Drug Trend Report, which provides the “healthcare industry’s most detailed analysis of prescription drug costs and utilization”. The “2013 Drug Trend Report Highlights” is published just this month. The definition and distinction between specialty and orphan drugs is important. In the United States, an orphan drug is defined by the FDA as a drug developed for “a rare disease affecting fewer than 200,000 people”. An orphan drug can be a specialty drug, with specialty drugs focusing “on delivery rather than target.” Specialty drugs usually have complicated usage requirements (i.e. injectable). Specialty drugs often treat chronic conditions such as cancer, hemophilia, and HIV.
Here are a few observations for the drug trends for specialty drugs in 2013 from the report:
• Drug trends for traditional drugs increase 2.4%, while for specialty drugs there was a 14.1% increase (lowest rate since 2007)
• Specialty drug spending is 27.7% of total pharmacy benefit spending, up from 24.4% in 2012
• Specialty drug spending for the top 4 conditions (inflammatory conditions, cancer, multiple sclerosis, and HIV) is 72% of total per-member, per-year (PMPY) spend. Traditional drug spending on the other hand for the top 4 conditions (diabetes, high blood cholesterol, high blood pressure/heart disease, and ulcer disease) is only 34% of total PMPY spend
• Specialty drug spend is forecast to grow an additional 63%, 2014 – 2016, due to the increase in Hepatitis C (HCV) – note to the reader to keep an eye on the competitive HCV market with 6 FDA Breakthrough Therapy Designations having this indication.
II – IMS Institute For Healthcare Informatics Report
IMS Institute for Healthcare Informatics publishes on April 15th the “Medicine use and shifting costs of healthcare” report. The report reviews in detail the use of drugs in the United States in 2013.
Here are a few observations for the drug trends for orphan drugs in 2013 from the report:
• Out of 36 New Molecular Entities (NMEs) launched, 17 or approximately 42% are orphan drugs – the most in any year since the Orphan Drug Act is enacted in 1983 & more than double the # launched in 2012
• In last 5 years, 53 orphan drugs are launched
• Launches are strengthened by a high # of orphan approvals and increase in applications and approvals for products seeking the Breakthrough Therapy Designation – “signifying a shift towards expediting the availability of drugs to patients in critical need”.
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