Navitus Commercial Clients Saw Slower Drug Cost Trend in 2022

Improved pharmacy network rates, increased rebates, and formulary and utilization management all helped to keep drug costs lower for Navitus clients in 2022. Year-over-year trend in both specialty and non-specialty product spend was 2.6%, and just about half of Navitus’ commercial clients saw a drug spend decrease compared with 2021, according to Navitus’ recently released 2022 Drug Trend Report.

Ryan Schmidt

“Because of our ability to pass those rebates on, the clients were able to keep their costs down, even though we saw some pretty significant increases in utilization,” Ryan Schmidt, associate director, client financial support of Navitus, said in an interview with Formulary Watch. “We expect that to continue as members use more medications. But our ability to keep those unit costs low helped prevent plans from being exposed to a lot of new costs.”

New commercial clients saw average reduction in total drug cost of 12% compared with the previous year with another PBM. Navitus executives said the company’s transparent and pass-through model, as well as clinical care model that helps promote adherence and improve health outcomes, helps to improve outcomes for new customers in the first year.

Specialty medications accounted for more than 50% of total spend for Navitus’ commercial business, despite only representing about 1% of overall utilization. With the drug development pipeline full of specialty medications, this trend is likely to continue into the foreseeable future, Navitus executives said. Specialty spend had a per member per month (PMPM) cost last year of $44.90, compared with $42.25 in 2021. For both specialty and non-specialty, PMPM in 2022 was $89.73, compared with $87.47 in 2021.

Schmidt said the company’s commitment to preferring generics, both in specialty and non-specialty, helped to lower costs last year. In the diabetes space, for example, the company preferred generic insulins rather than relying on rebates on branded products. In addition, Navitus late last year began limiting Ozempic (semaglutide) and other GLP-1 drugs to people with diabetes.

Products like Ozempic have gotten a lot of media coverage because of their ability to help with weight loss, and they have been used off-label for that purpose. Semaglutide works by mimicking a hormone that targets areas of the brain that regulate appetite and food intake.

Related: Semaglutide for Weight Loss: To Cover or Not Cover?

“We did see a drop off in utilization at the end of the year after limiting semaglutide, but most patients were taking the drugs for diabetes,” Schmidt said. “The vast majority of our clients today don’t cover weight loss as part of the pharmacy benefit. That will be one of the challenges we face going into the rest of this year and into next year, as each of those clients get pressure to add it to be part of the pharmacy benefit. We’re starting to see new clinical data to support it.”

Schmidt is referring to Novo Nordisk’s release of data in May 2023 that showed that oral semaglutide achieved a 15.1% weight loss in adults with obesity in a phase 3 trial. (Novo Nordisk markets Ozempic, as well as Wegovy and an oral version as Rybelsus.)

Schmidt said that they are working with their advisory to determine possible coverage for weight loss therapies and what that would look like, including whether a solution or counseling around healthy eating should be required or whether coverage should be for a limited time, etc.

For the last year, the highest increase in Navitus’s drug spend was in dermatology products, with a 39% in overall trend and a 32% in utilization. Schmidt said this was attributed mostly to the drug Dupixent (dupilumab). Developed by Sanofi and Regeneron Pharmaceuticals, Dupixent is approved for multiple indications, but last year was approved for several new uses, including for prurigo nodularis, a rare skin disorder. and for children aged 6 months to 5 years with moderate-to-severe atopic dermatitis.

“Atopic dermatitis is a growing space, and we’re going to see more use as the dermatologists become familiar with Dupixent and other products. We anticipate continued growth in this area,” Schmidt said.

The approval of recent biosimilars will help address rising costs going forward in the specialty area, he said. For example, Humira (adalimumab) represented 10% of Navitus’ specialty spend last year. It is used to treat several immune conditions, including rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, psoriasis, ulcerative colitis, and Crohn’s disease. It has a wholesale acquisition cost of $6,922 for a four-week supply. Navitus added the lower cost version of Amjevita, the first Humira biosimilar to launch in January, in the first quarter. Over the July 4 holiday, seven additional biosimilars were launched, with various formulations and pricing options. Navitus is currently evaluating the new biosimilar options to make sure there are two low-cost options available for clients/patients.

Spend in oncology grew 15% in 2022, despite more than 30% of prescriptions being generic. On average, the cost of a generic oncology drug was less than $500 due to Lumicera’s cost-plus approach. (Lumicera is Navitus’ specialty drug division.) The increased spend was the result of increased overall use and brand price inflation. Brand name oncology prescriptions have prices of more than $10,000.