Five Drugs With Price Increases During 2016

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1 Five Drugs With Price Increases During 2016 #1 May Surprise You! Pharmaceutical price hikes have raised concerns about the affordability of critical and often life-saving medications, sparking debate, lawsuits, and proposed legislation. To help Pittsburgh Business Group on Health (PBGH) employer members better manage costs, Innovu analyzed claims data for 130,000 employees and dependents in calendar year Our report focuses on 5 drugs with annual unit cost increases ranging from 25% to 462% INCS-726

2 Specialty Medication Cost Increases $400 Figure 1. Annual Allowed Payments per Unit Dispensed Allowed Per Unit $200 $166 $230 Figure 1 illustrates the increased cost in annual allowed payments per unit for specialty medications. Specialty medications increased 38%, from an average of $166, to $230 per unit. $ Specialty Medications What Factors Influence Price? Traditional and specialty drugs are priced differently. Specialty medications are typically used to treat rare chronic conditions. They are often made from living organisms, and work at the cellular level to change the course of a disease. Manufacturers cite the costs of research and development, the complex manufacturing process, and special handling requirements to justify their higher price points. Manufacturing complexities can limit the ability of other manufacturers to replicate specialty medications, reducing market competition. Traditional medications can also experience price increases due to lack of competition, as manufacturers of the same drug exit the market. Prices also go up when a manufacturer acquires the rights for an existing drug and establishes a new price point. 5 Drugs that Have Experienced Major Price Increases Between 25% - 462% Innovu has identified the 5 drugs with the largest price increases for PBGH employer members. We have also provided cost management approaches, not only for the specific drugs identified, but for similar drugs. Lawsuits and Legislation Federal legislation that would require manufacturers to report and justify why drug price increases have been introduced. 1 A class action lawsuit alleges that EpiPen manufacturer Mylan paid large rebates to pharmacy benefits managers (PBMs) to prefer EpiPen over competitors, causing consumers to be overcharged. 2 A similar class action lawsuit against insulin manufacturers alleges they colluded with PBMs to raise insulin prices at the expense of patients. 3 Evzio is being sued by a PBM for unpaid rebates. 4 SmartCohort Analysis Innovu creates customized benchmarking tailored to each client s demographics. We leverage the 88+ to 95+ million lives in our database to simulate 1,000 virtual peer companies to gauge how you should be performing.

3 #5 Subsys Nasal Spray 25% increase in allowed/unit Subsys (fentanyl), a potent opioid narcotic used to manage severe pain, is typically prescribed for patients with cancer or terminal illness. Despite a 16% decline in the quantity dispensed in 2016, allowed payments were 5% higher than the year before. Figure 2. Subsys Member Example DRUG PRODUCT NAME FULL DATE TOTAL AMOUNT PAID 1 SUBSYS $20,478 2 SUBSYS $20,478 3 SUBSYS $20,478 4 SUBSYS $20,478 5 SUBSYS $20,478 6 SUBSYS $20,033 7 SUBSYS $18,702 8 SUBSYS $18,702 9 SUBSYS $18, SUBSYS $18, SUBSYS $18, SUBSYS $18,702 TOTAL $234,567 GRAND TOTAL $234,567 Client Intervention Opioids are typically inexpensive, but Subsys is the exception. An employer in this study spent $20,000 a month, totaling $234,000 in 2016, for a single employee taking Subsys for non-cancer related pain. Innovu observed and shared the data (Figure 2) in a HIPAA-compliant manner with the employer s designated third-party care management team so they could evaluate appropriate use and treatment options with the prescribing provider. Manage Subsys and Other Opioids In light of the price increase to this already expensive drug and our nation s battle with the opioid epidemic, Subsys utilization should be on every employer s watch list. Confirm with your vendor that appropriate restrictions are in place to limit this potent opioid for patients with severe pain. To manage opioid use overall, Innovu can identify members taking high dose chronic opioids for case management referrals. #4 Glumetza 1-180% increase in allowed per tablet Two different dosage strengths of Glumetza (extended release metformin), used to treat diabetes, rank #4 on the list. Because a generic equivalent is available, use of the brand drug declined by 93% in But the price for a 500mg Glumetza tablet rose from $17 per tablet to $48. The price of the 1000mg tablet increased from $51 to $107 per tablet. Client Intervention The 7% of people who continue to take the brand medication present our client with a savings opportunity. Because the brand drug is priced higher, patients may not be able to afford to fill their prescriptions, resulting in poor blood glucose control. Uncontrolled diabetes can lead to complications such as high blood pressure, kidney disease, stroke, and blindness. Manage Medication Adherence You should be receiving a detailed report on the medication adherence of your members with chronic conditions. Poorly managed conditions will increase both your and your members healthcare costs. Innovu s IntelligentAnalysis identifies patients who are not filling their prescriptions, which you can incorporate into your disease management and patient engagement programs. You should also review the mandatory generic provision under your benefit plan to maximize the incentive to use equivalent generic alternatives.

4 #3 Sprycel Figure 3. Innovu s Specialty Drug Overview Dashboard 187% increase in allowed per tablet Sprycel is a specialty medication used to treat a type of cancer that affects the blood and bone marrow. In our study, the cost for treatment increased from $16,000 to $71,000 per patient per year. While this is alarming, the national benchmark is 61% higher than what the Pittsburgh employer paid. Manage Specialty Drug Costs You should have a comprehensive utilization management program that: Engages both providers and members Adopts limited distribution pharmacy networks Includes plan design provisions. Innovu s Specialty Drug Overview Dashboard (Figure 3) helps clients focus their approach to specialty drug management by identifying cost and utilization anomalies in their data. #2 Omnitrope Injection 379% increase in allowed per unit Omnitrope is a human growth hormone injected under the skin to treat children and adults with growth failure. Innovu found that the drug increased more than $530 per unit, to $675 per unit in Mange Costs Similar to Sprycel, you should have a comprehensive specialty pharmacy management strategy in place to address cost and appropriate use. Innovu can identify over- or under-utilization of Omnitrope relative to national, regional, and SmartCohort benchmarks. #1 Evzio 462% increase allowed per unit Less Expensive Alternatives Affordable access to lifesaving rescue medications should be a focus of all employers discussions as they review their opioid coverage policies. While utilization is relatively low in our study sample, you should ask your PBM to assign preferential status to less expensive alternatives to Evzio on your formulary.

5 Other Drugs with Annual Increases of More than Figure 4 identifies a number of other drugs experiencing an annual price increase of more than. These drugs accounted for $10 million, or 6% of the total pharmacy spend in calendar year 2015, and $13 million (8% of total pharmacy spend) in 2016 for PBGH employer members. Five drugs on this list are traditional medications used to treat opioid addition, pain, diabetes, and hypertension. Figure 4. Drugs with > Annual Price Increase NATIONAL DRUG CODE DRUG PRODUCT NAME THERAPUTIC CLASS JAN -DEC 2015 JAN -DEC 2016 AMOUNT VARIANCE VARIANCE DISPENSED AMOUNT EVZIO Opiate Antagonists $6,944 $ $119,834 $4, % 207% OMNITROPEINJ10/1.5ML Pituitary $29,011 $ $36,492 $ % -74% SPRYCEL $16,777 $37.96 $71,805 $ % 49% GLUMETZA Antidiabetic Agents $90,622 $17.21 $17,348 $ % -93% GLUMETZA Antidiabetic Agents $257,248 $51.22 $179,976 $ % HUMATROPE Pituitary NEULASTA Hematopoietic Agents COSENTYX PEN (2 PENS) NEXAVAR XYREM Central Nervous System Agents, Miscellaneous GLEEVEC HUMIRA Disease-modifying Antirheumatic Drugs SUBSYS GILENYA $62,229 $1, $90,590 $1, % -19% $164,891 $5, $241,562 $8, % 0% Skin and Mucous Membrane Agents, Miscellaneous $60,267 $1, $203,531 $1, % 132% $46,919 $86.89 $94,129 $ % 44% $493,049 $14.97 $642,338 $ % -2% $216,501 $73.64 $119,978 $ % -57% $6,358,745 $1, $7,961,213 $1, % -1% Analgesics and Antipyretics $218,607 $ $228,702 $ % -16% Immunomodulatory Agents $401,546 $ $740,524 $ % 56% ZYTIGA $202,431 $62.48 $60,286 $ % -74% TOBI PODHALER Anti-infectives $39,229 $35.03 $34,830 $ % -20% IMBRUVICA $393,414 $93.01 $730,300 $ % VOTRIENT $190,343 $70.71 $19,813 $ % AVONEX Immunomodulatory Agents $659,186 $5, $1,203,161 $5, % $9,908,079 $ $12,796,662 $ % -17% TOTAL Actionable Insight: Innovu can help you get the best outcomes at the lowest costs by identifying financial and utilization variances in your pharmacy data compared to regional, national, and SmartCohort benchmarks. Let Innovu reveal the stories your data is waiting to tell you Citations 1 Innovu identified twenty drugs that had price increases of more than in 2016 for a 30-day supply of medication.this threshold was adapted from the proposed federal legislation to require reporting by manufacturers to justify drug price increases. house-bill/2439/text?format=txt