Spending on Traditional Drugs Drops as Specialty Medicines Rise

Americans are spending less on pills and other conventional medications for the first time in two decades, and more on complex injected drugs, a study has found.

Use of pills and other non-injected, non-specialty drugs fell 1.5 percent last year, according to the report by the pharmacy management company Express Scripts Holding Co. Traditional drugs are medicines like pills that dont require special means of administration or frequent monitoring.

The drop is a reflection of trends in the pharmaceutical industry that include development of biotechnology drugs made from living organisms that require injection as well as expensive injectable or infused specialty medications that require special care. Wider use of cheaper generic equivalents of pills has helped reduce spending on conventional medicines, even as total pharmaceutical spending continues to rise.

Express Scripts, which is the biggest pharmacy benefits manager by sales, said it was necessary to put pressure on the cost of specialty drugs and biotechnology medicines, in part through developing cheaper copies called biosimilars or biogenerics.

Increased drug competition, in the form of biosimilars, is necessary to offer more affordable medication for patients afflicted with these complex specialty conditions, said Glen Stettin, St. Louis, Missouri-based Express Scripts senior vice president of clinical, research and new solutions, in a statement.

In total, spending on all types of medicines grew 2.7 percent in 2012, about the same as in 2011, according to the report. That was driven by an 18.4 percent surge in spending on specialty drugs, led by medications for cancer, inflammatory diseases like rheumatoid arthritis, HIV/AIDS, and multiple sclerosis. The fastest-growing category was drugs for the viral infection hepatitis C, because of two new medicines, Vertex Pharmaceuticals Inc. (VRTX)s Incivek and Merck & Co.s Victrelis.

Among non-specialty drugs, spending on diabetes care took the greatest share as medications such as Eli Lilly and Co.s Humulin and Sanofi (SAN)s Lantus grew by 11 percent last year, according to the report.

To contact the reporter on this story: Drew Armstrong in New York at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

Excerpt from:
Spending on Traditional Drugs Drops as Specialty Medicines Rise