PSG: Specialty Drug Trend Driven by Utilization

Specialty drug trend continued to be driven primarily by utilization, finds a new analysis of client data by Pharmaceutical Strategies Group (PSG). Drug utilization accounted for nearly three-quarters of the overall 14.1% gross trend in 2022, which was reduced to 12.5% net of rebates, according to the Artemetrx’s State of Specialty Spend and Trend report. Artemetrx is PSG’s SaaS platform that integrates pharmacy and medical claims data for specialty drug cost management.

The trend report, which was sponsored by Walmart this year, found that the percentage of members taking at least one specialty drug continues to rise, from 3.8% in 2021 to 4.0% in 2022. While the increase may be small, the high prices of some of the products can have a substantial impact.

Renee Rayburg

Cost per claim, however, played a larger role in specialty trend this year, accounting for 3.9% of the spend increase in 2022, compared with 1.3% in 2021. This is reflective of a few things, including the rising costs of specialty drugs and expanded indications for some drugs, which increases their use, Renee Rayburg, vice president, specialty clinical consulting at PSG, said in an interview.

Rayburg pointed to AbbVie’s Skyrizi (risankizumab-rzaa) as an example of a high-cost drug with an expanding indication. Skyrizi was first approved got in 2019 to treat patients with moderate-to-severe plaque psoriasis. It is now also approved to treat patients with active psoriatic arthritis and moderate-to-severe Crohn’s disease. Skyrizi’s list price is $19,734.61 per dose.

The PSG report also shows a shift from the medical benefit to the pharmacy benefit. In 2022, 56.3% of specialty spending was through the pharmacy benefit, up from 54.1% in 2021 and 52.4% 2020. The average cost per claim under the pharmacy benefit in 2022 was $5,940 compared with $5,590 in 2021, while cost per claim under the medical benefit was $3,231 in 2022 compared with $3,229.

PSG executives suggest the high cost in the pharmacy channel is driven by higher utilization of medications to treat inflammatory disorders, immunological conditions and rare diseases. These categories continue to be where the highest spend in. Humira and Stelara continue to be the drugs with highest spend, remaining unchanged from 2021. Janssen’s Stelara (ustekinumab) has a list price of $25,497.12 every eight weeks. It is approved to treat moderate-to-severe psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis. Several biosimilars for Stelara are under regulatory review or in development. Amgen’s biosimilars referencing Stelara, however, has been delayed until 2025.

AbbVie’s Humira (adalimumab) has a list price of $6,922 for a four-week supply, and is indicted for patients with rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, Crohn’s disease and ulcerative colitis.

Going into next year, the eight Humira biosimilars that have recently launched could have a positive impact on spend, Rayburg said. “Some of the Humira biosimilars have really low prices, and that allows for competition,” she said. “This might allow for additional rebates on Humira.”

One of the lowest price Humira biosimilars is Coherus’ Yusimry (adalimumab-aqvh), which has a list price of $995 per carton (2 autoinjectors), an 85% discount off Humira. Additionally, the PBM RxPreferred is offering Yusimry through Mark Cuban’s online mail-order pharmacy for $569.27 plus dispensing and shipping fees.

Rayburg pointed out that any savings seen this year or next year from the Humira biosimilars are likely to be offset by higher use of other high-cost therapies entering the market and higher utilization of other anti-inflammatory drugs such as Skyrizi.

Despite this higher cost on the pharmacy site, a shift away from the medical channel is happening for several reasons. One is that many of the newer drugs are self-administered medications, which means they would come through the pharmacy benefit.

Additionally, it’s easier to manage rebates through the pharmacy benefit, Rayburg said. “There's better transparency and pricing through the pharmacy benefit,” she said. “The data is cleaner so it’s easier to collect rebates. And the rebates are far more robust in pharmacy.”

On the pharmacy benefit side, the 2022 net cost per specialty claim was $3,861 and the rebate per claim was $2,079. Within the medical benefit, the net cost per claim was $3,145 and the rebate per claim was $86.

Because of this, some PBMs are looking at strategies to move more drugs to the pharmacy side. “There’s been this interest in the PBM industry to partner with medical vendors,” Rayburg said.

Going forward, PSG analysts project per member per year trend for specialty drugs will continue in the low double digits for the next three years.

Gene therapies are expected to contribute this growth in spend. When gene therapies first came to market, they launched with prices below $1 million. The first, Novartis’ Kymriah for pediatric patients with acute lymphoblastic leukemia, was launched in 2017 with a price of $508,250. That year, Spark Therapeutics launched Luxturna to treat a rare retinal disease, with a price of $850,000.

Now gene therapies are launching with a price of $2 million or more. For example, in June 2023, two gene therapies were approved for treating patients with Duchenne muscular dystrophy (Elevidys) and hemophilia A (Roctavian). Roctavian has a price of $2.9 million and Elevidys is $3.2 million. In the remainder of this year, we could see at least three more gene-based therapies, including two for sickle cell disease and another for advanced melanoma. These are expected to have prices of at least $2 million range.

Rayburg said there is a heavy reliance on medical vendor to help determine the appropriate use of these therapies. “Gene therapies, and obesity issue, are the most popular topics that our clients say are keeping them up at night.”