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Blue Cross Blue Shield Association Examines the Growing Costs of Specialty Pharmacy

Jun. 02, 2016

Chicago, IL — A new study by the Blue Cross Blue Shield Association (BCBSA) and HealthCore, Inc.  shows that per member specialty pharmacy spending increased 26 percent from 2013 to 2014.

The report, "The Growth in Specialty Drug Spending from 2013 to 2014," represents a comprehensive, in-depth study of costs for both medical and pharmacy claims. Approximately half of specialty drug spending is funded by each benefit. Examining medical benefit data allows for a thorough analysis of changes in the cost of medication administered at hospitals and other clinical settings. For example, more than 80 percent of cancer medication costs are billed through the medical benefit. Comparing specialty pharmacy spending in 2013 and 2014, this study found that:

  • There was an $87 annual per member increase in specialty pharmacy spending from 2013 to 2014.
  • The increasing costs of specialty drug treatments were the main driver of the growth in spending. Treatment costs include the price and selection of drugs. Increased utilization had a smaller effect on the growth in spending.
  • In 2014, annual specialty drug spending was 17 percent higher per member in the individual market compared to the employer market. While cost of treatment was similar between employer-based and individual members, there were differences in utilization rates by condition. Utilization was significantly higher for individual members for cancer, human immunodeficiency virus and hepatitis, but slightly lower for inflammatory conditions (such as rheumatoid arthritis) or multiple sclerosis.

Total cost of treatment increased across all specialty drug categories featured in the study. Of the 26 percent cost increase for specialty drugs between 2013 and 2014 for commercially-insured members, 15 percent can be attributed to higher costs for treatments. Utilization accounted for an 11 percent increase in specialty pharmacy spending.

"The recent, rapid increases in specialty drug costs are a concern for everyone — the public, medical professionals, health care companies, employers of all sizes and taxpayers who bear the cost of prescription drugs provided by government programs such as Medicare, Medicaid and those who receive financial assistance to purchase individual coverage," said Dr. Trent Haywood, chief medical officer for BCBSA. "To promote affordability and access to new innovative medicines, it's important to have greater competition and choice to bring costs down for everyone, including speeding up the approval of generic and biosimilar drugs. There also should be transparency regarding the pricing of prescription medicines with information about price and a drug's effectiveness made widely available to the public."

This is the seventh 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. This report was written by and also includes medical claims data from HealthCore, Inc., a wholly-owned and independently operated health outcomes subsidiary of Anthem, Inc.

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

* The report covers the majority of Blue Cross and Blue Shield (BCBS) companies’ commercially insured and individual members across the country and approximately 70 percent of all BCBS membership, or a sample size of approximately 70.5 million BCBS members per year in 2013 and 2014. It does not include members who receive coverage through Medicare or Medicaid programs. All costs reported are the combined cost of payment by BCBS companies and by members (out of pocket). Costs do not account for rebates provided by drug manufactures.


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