January 2019
Health of America Report Shows Branded Prescription Drug Costs Increased
Drug costs are on the rise, and while many Americans have turned to generic prescription drugs to lower costs overall, prescription drug spending is up. The most recent Blue Cross Blue Shield Association (BCBSA) Health of America (HoA) Report1 found the following reasons for increased drug spending:
- Basically, there are two types of prescription drugs – generic and branded. Branded drugs can be divided into smaller groups, including branded patent-protected drugs and branded specialty drugs. Although inexpensive generic drugs continue to slow the increase in total drug spending, there is limited competition for both branded patent-protected and branded specialty drugs, enabling substantial cost hikes in 2018 (5 percent for branded patent-protected drugs and 10 percent for branded specialty drugs)1
- Expensive branded prescription drugs accounted for only 17 percent of total prescriptions filled, but 79 percent of total prescription drug spending ($79.5 billion)1
- Branded specialty drugs made up 3 percent of branded drug prescriptions filled but accounted for 34 percent of total branded drug spending ($27 billion)1
Blue Cross and Blue Shield of Illinois (BCBSIL) strives to improve not only the quality but also the affordability of care for our members. One way we do this is through prescription drug tiers or lists, which set different out-of-pocket costs for different types of prescription medicines. In building these lists, we bring together doctors, nurses and pharmacists to evaluate safety, effectiveness, and how drugs should appear on lists, all while trying to bring down the cost.
We are also investing in new capabilities to help combine the management of pharmacy-related needs and other types of medical care to counteract the upward shift in drug costs. Our long-term strategy strives to:
- Empower whole-person health: Combining pharmacy and medical care management may provide a complete view of patient medical history and treatment. We focus on the whole person, not a list of individual diagnoses and symptoms.
- Deliver cost savings: Customer advocates work with members to avoid high-cost claims. They also work with clinicians on treatment options. This may help improve health outcomes and lower costs.
- Improve member experience: Combining medical and pharmacy care management may help deliver lower combined pharmacy and medical costs. But it also aims to help our members make more informed health care choices. This may help improve their quality of care and helps them understand how pharmacy and health care work together.
Prescription Drugs Cost Trend Update is the 22nd study of the Blue Cross Blue Shield: The Health of America Report® series, a collaboration between BCBSA and Blue Health Intelligence®, which uses a market-leading claims database to uncover key trends and insights into health care affordability and access to care.1
1BCBSA Health of America, Prescription Drug Costs Trend Update, Nov. 14, 2018. https://www.bcbs.com/the-health-of-america/reports/prescription-drug-costs-trend-update
The information mentioned here is for informational purposes only and is not a substitute for the independent medical judgment of a physician. Members should refer to their certificate of coverage for more details, including benefits, limitations and exclusions. Regardless of benefits, the final decision about any medication is between the member and their health care provider.