Prescription Drug Price Hikes: Searching for that Elusive Cure



The high cost of prescription drugs has employers and a leading health insurance provider taking action to try and rein in drug prices.

Health insurer Anthem Inc. filed a complaint against its pharmacy benefit manager, Express Scripts Holding Co. in March (Anthem, Inc. v. Express Scripts, Inc., S.D.N.Y., No. 1:16-cv-02048, complaint filed 3/21/16).

In the lawsuit, Anthem alleges it should be getting $3 billion a year more in prescription-drug savings and seeks to recover about $15 billion in excess payments. Anthem is also requesting the right to terminate its 10-year contract with Express Scripts, although it has not decided whether it would do so. 

The conflict has brought attention to the obscure world of managing drug benefits, a business where third-party middlemen such as Express Scripts, CVS Health Corp. and Prime Therapeutics are hired by employers or insurers to manage patients’ prescriptions.

Some employers concerned about the rising costs of prescription drugs are taking action outside of litigation.

In a recent example, 20 large companies that provide health care benefits for about four million people are forming a coalition to combat the rising costs of health care, including prescription drug costs. 

The Health Transformation Alliance will launch a pilot project to help employees obtain more affordable prescription medicine as soon as 2017, a Feb. 5 press release said.  

The HTA includes companies such as the American Express Co., Caterpillar Inc., the Coca-Cola Co., E.I. du Pont de Nemours & Co., IBM Corp., the Hartford Financial Services Group Inc., Macy's Inc., Marriott International Inc., Verizon Communications Inc., Shell Oil Co., Pitney Bowes Inc. and Weyerhaeuser Co., according to the press release. (See related story, IBM, Coca-Cola Among Firms Forming Health-Care Alliance.)

Prescription drug pricing received widespread attention in 2015, when Turing Pharmaceuticals and Valeant Pharmaceuticals bought specialty drugs for which there are no generic alternatives and increased the prices. Turing purchased anti-parasitic treatment Daraprim and increased the price from $13.50 to $750 per tablet. Valeant purchased heart drugs Notropress and Isuprel and increased the prices 212 percent and 525 percent, respectively.

Prescription drug spending rose sharply in 2014, after several years of modest growth, according to the April 5 Kaiser Family Foundation Infographic, Recent Trends in Prescription Drug Costs.  

Prescription drug spending rose from 1.6 percent in 2013 to 11.4 percent in 2014, in sharp contrast with the increase of total health spending from 2.1 percent in 2013 to 4.5 percent in 2014, according to the infographic.  

Much of the increased spending on prescription drugs can be attributed to specialty drug spending growth, which increased from 14.1 percent in 2013 to 30.9 percent in 2014, it said. 

See related story, Anthem Sues Express Scripts, Escalating Pharmacy Dispute.

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