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Between 2010 and 2017, Americans nearly doubled their spending on pricey specialty medicines that they purchased at pharmacies or by mail. And this was after accounting for rebates paid by drug makers to health plans, according to a new analysis in Health Affairs.

Specifically, specialty drugs accounted for 38% of retail and mail-order prescription spending in 2017, compared to 20% in 2010. Drilling down, spending tripled for Medicare Part D beneficiaries and more than doubled for people who are covered by private insurance, although Medicaid spending rose at a slower pace — again, after allowing for rebates. And this growth occurred even though specialty drugs comprised a very small portion of retail prescriptions that were filled during this period of time.


Although rebates may have reduced net spending for both government and private payers, the findings underscore the limited effect that rebates had on dampening increased spending by patients for specialty drugs. While there is no precise definition, specialty medicines generally include most injectable medications, biologics, and other drugs that require specialized administration and handling.

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  • You missed the real story.

    The increase in utilization (more people, more prescriptions) drove *all* of the growth in spending.

    Average net, poat-rebate price per prescription fill was flat (no change). See appendix exhibit 7.

    One might think that STAT would approve of more people getting access to appropriate medical care.

    Personally, I don’t think we should “lower drug spending” by denying coverage to people.

    • Hi Adam,

      Thanks for the note.

      I did mention – in the 4th paragraph – that the analysis highlighted the increased use of specialty medicines. And the analysis did note that “growing net spending was driven by the increased use of retail specialty drugs; average net spending per fill for these drugs did not rise during our study period.” But there was no discussion of access in the analysis, nor did I editorialize about access.

      Stay safe,
      ed at pharmalot

  • It’s both pharma and PBM greed. Not only does pharma gain preference, in many cases they determine the prior authorization requirements or if there are any at all and what other competitive drugs must be excluded. The PBM then adds their “proprietary” fee(s) and the crumbs (hefty rebates) go to the payers.
    No doubt all of this does impact the overall cost of the drug.

    Additionally, in some cases the pharmaceutical company will develop another drug for the same indication ready for market before their preferred drug patent expires and require the PBM to add it or the rebates and PBM fees will end. This would severely negatively impact the payers who have many of their members on the original preferred drug and depend on the rebates to offset the cost of the drug. The goal being to get members on the current preferred drug moved over to the new drug before the patent ends and a less costly biosimilar comes out. Not always in the best interest of the payer and definitely not in the best interest of the patient (member).

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