Cleveland Clinic implemented an entire supply chain and treatment protocol for one drug to ensure that it is not wasted.
The U.S. Food and Drug Administration approved Biogen’s Spinraza, the first drug it cleared to treat spinal muscular atrophy, about two years ago. The first year’s supply of the potentially lifesaving therapy is about $750,000, and then $375,000 a year thereafter, said Jeffrey Rosner, senior director of pharmacy contracting and purchasing at Cleveland Clinic.
First, Cleveland Clinic’s billing specialists check if the patient has insurance or access to financial-assistance programs upfront. Then, staff relays tracking information to receiving dock and pharmacy technicians. The temperature-sensitive vials end up in its narcotics vault for safekeeping. The drug is only prepared when the patient has arrived and is cleared by the medical team.
Pharmacy and supply chain employees keep close tabs on the product’s temperature the entire time because if it gets too hot or cold, it loses efficacy.
First the good news. While we are in the midst of an opioid epidemic, large employers have seen prescription rates fall significantly since peaking in 2009. That year, 17.3 percent of covered employees or dependents had at least one opioid prescription.
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“The drug is so expensive that we can’t afford to waste any,” Rosner said, adding that it costs $125,000 per vial.
This is a predicament many health systems and patients face as they look to mitigate rising drug prices.
While overall drug spending only increased by 2% from 2016 to 2017, slower than years prior, it was largely due to branded-drug price hikes, according to an update of the Blue Cross and Blue Shield Association’s study of medical claims of more than 40 million members.
Spending on both branded patent-protected drugs and branded specialty drugs increased 5% and 10%, respectively over that span.
In 2017, brand-name prescription drugs represented only 17% of total prescriptions filled but made up 79% of total pharmaceutical spending.
Branded patent-protected prescription drugs made up 52% of branded prescription drugs filled and accounted for 66% of total branded-drug spending. Brand-name specialty drugs represented a mere 3% of branded-drug prescriptions filled but accounted for 34% of total branded-drug spending at $27 billion.
Meanwhile, generic drugs continue to add to their growing market share, rising to 83% of prescriptions filled. Generic drugs’ share of total prescriptions filled was 66% in 2010. Yet, price hikes of branded pharmaceuticals still dwarf the higher utilization of their lower-cost alternatives.
Total spending on generic drugs has declined 3% since 2016, while branded prescription drug spending is up 4%.
“Given the increase in generics, we should be in a fairly strong negative downturn in overall spending. But we’re not,” said Brian Harvey, executive director of the Blues’ Health of America research initiative, which came out with the study. “It’s not negative because of the upward trend in the branded patent-protected space, particularly in the specialty space.
The Blues association has taken a closer look at pharmaceutical prices as they eat up a bigger chunk of the insurer’s spending. At more than $100 billion, spending on prescription drugs accounts for more than 20% of the company’s overall healthcare spending for Blue Cross and Blue Shield members.
The FDA has tried to curb pharmaceutical spending by clearing the path for more generic drugs. The agency approved a record-setting 971 generic drugs in fiscal 2018, up 3.6% from 937 in 2017. That strategy appears to be working, evidenced by the slower rate of spending increases, although it is not a cure-all, researchers note.
There is an expansive pipeline of new drugs coming to market, which is poised to increase spending next year, said Maureen Sullivan, chief strategy and innovation officer for the Blues association.
“These new drugs that come to market hold a lot of promise, but it’s important to understand their relative efficacy,” she said. “If we get through that hurdle—are they affordable? The primary concern is that the high cost of drugs may put them out of reach for people who could benefit.”
Blues plans are pursuing value-based arrangements with pharmaceutical manufacturers that tie payment to outcomes, which has helped slow drug spending, Sullivan said.
The insurer is also reaching out to members when one of their medications jumps significantly in price. The price of one diabetes drug increased tenfold over a few months and outreach helped save members about $15 million in out-of-pocket costs, she said.
Advocates of limiting prescription drug spending are pinning a lot of hope on the CREATES Act, an expansive bill that has faced stiff opposition from pharmaceutical companies because it targets their anticompetitive behavior that stifles generic-drug development.