PSG: Specialty Drug Trend Continues Upward

Specialty drug spend and trend continue an upward with little sign of slowing, according to Pharmaceutical Strategies Group (PSG)’s latest State of Specialty Spend and Trend report, which was sponsored by Walmart Specialty Pharmacy.

Overall, specialty drug trend increased 14% in 2023, according to PSG’s analysis of its clients specialty drug spend. Although claim utilization continues to be the leading driver of specialty drug trend, cost per claim is now playing a substantial role as well

Renee Rayburn

“There are a lot of things happening in the market with specialty drugs,” Renee Rayburg, RPh, vice president of Clinical Strategy at PSG, said in an interview. “There was hope for some cost savings from biosimilars, particularly the Humira biosimilars that were launched last year.”

The PSG report found that in 2023 uptake of Humira biosimilars was slow. This confirms other studies released early this year. For example, the Samsung Bioepis Quarterly Biosimilar Market Report released in April 2024 indicated that the Humira biosimilars reached a market share of 4% as of February 2024, up from 2% in the last quarter of 2023.

Related: Humira Biosimilars Have a Slow Uptake, Finds Samsung Bioepis Report

Last year, 10 biosimilars of Humira (adalimumab) entered the market, with many offering two pricing options: a high wholesale acquisition cost (WAC)/high rebate and low WAC/low or no rebate.

Among PSG’s clients, Humira tops the list of the top specialty drugs by spend. Other inflammatory drugs — such as Stelara (Ustekinumab) and Skyrizi (risankizumab-rzaa) — are also in the top 10 drugs by spend.

Rayburg said this slow uptake was mostly because the largest PBMs kept the branded Humira in a preferred position and added its biosimilars at parity on their formularies. The PSG report indicated that the branded Humira still maintained 96% market share through first quarter of 2024.

But this is changing, however, and the uptake of the biosimilars is starting to increase. PBMs began shifting their strategies, with some even excluding brand Humira, which will lead to higher Humira biosimilar utilization in 2024 and beyond, the PSG report suggests.

Shifts from Medical to Pharmacy

The PSG report also found that coverage for some high-cost specialty drugs has shifted from the benefit to the pharmacy benefit. In 2023, 63.8% of specialty spend was through the pharmacy benefit, up from 62.8% in 2022 and 60.2% in 2021. Spend within the medical benefit decreased to 36.2%

Jennifer Warren

This is happening because more higher-cost drugs are now being offered as self-injectables instead of as infusion based, Jennifer Warren, vice president - Data and Analytics at PSG, said in an interview.

“There is also less special requirements such refrigeration and manufacturers are making some drug a little bit easier to access,” she said. “That is also allowing them to move the channel from medical to the benefits.”

The PSG report, however, did not assess which drugs that have been shift to the pharmacy have had the most impact on spend. But more therapies one administered through IV infusions are now available for subcutaneous administration. One such product is Entyvio (vedolizumab) to treat patients with Crohn’s disease. A subcutaneous formulation was approved in April 2024 as a single-dose prefilled pen.

And more approvals of subcutaneous formulations are expected. The FDA is currently reviewing several applications for subcutaneous forms of currently available therapies. One is Bristol Myers Squibb’s application for a subcutaneous form of Opdivo (nivolumab) for all of its solid tumor indications across multiple cancers. The Prescription Drug User Fee Act (PDUFA) goal date is Dec. 29, 2024.

Additionally, Eisai and Biogen announced in May 2024 the start of rolling application for subcutaneous form of Leqembi (lecanemab-irmb) to patients with early Alzheimer’s disease. It is currently available as an IV.

GLP-1 Drug Use Expected to Increase

The PSG report also analyzed the impact of the GLP-1 drug, which have been available since 2005 to treat diabetes. Although not classified as a specialty drug, the GLP-1 drugs have a high cost and their indications are expanding beyond diabetes to include obesity and reducing risk of cardiovascular events, indicating that the use and the demand for these therapeutics is expected to increase.

Sales of GLP-1 therapies have grown by 58% in 2023 compared with 2022, with the diabetes drugs Novo Nordisk’s Ozempic (semaglutide) and Lilly’s Mounjaro (tirzepatide) driving most of the volume growth, according to IQVIA data. Sales of Ozempic specifically have grown 78.7%. The list price for Ozempic 1.0 mg is $968.52 for one pen. The list price of Mounjaro is $1,069.08 for one month’s supply.

In the United States, about 12% of adults have used GLP-1 drugs either to treat diabetes or to lose weight, according to a May KFF Health Tracking Poll. Of those who report taking the GLP-1 drugs, 43% have diabetes, 26% have heart disease and 22% have obesity or overweight (22%).

Among PSG clients, the proportion of overall pharmacy drug spend attributed to GLP-1s in 2023 for both diabetes accounted for 9.3% and obesity accounted for 1.7% of overall spend.

Rayburg said these drugs aren’t going away. “There's a strong pipeline coming in, which means more utilization,” she said. “There needs to be more consideration of how payers are going to afford these medications.”

Part of the discussion for employer and payers will be the health and financial benefit of a healthier population. “We are looking at the data for that but that type of analysis does take a much larger dataset to review and time of use with these drugs,” Warren said. “A part of the conversation is that there would be expected savings in that arena. Still, there is a wide population that aren't using GLP-1, which indicates to me that there will be increased spend in this area.”