To maximize profits Express Scripts and health insurers are systematically placing most or all drugs that treat these and other conditions on the highest cost tiers to discourage enrollment by individuals based on age or based on health conditions. HHS notes such practices make those plan designs discriminatory.
To be sure 1 percent of all patients do use a considerable amount ($50000 or more) of medications. But it is also true that the 1 percent of the most costly patients also consume about 22 percent of all health care spending.
Using Express Scripts data we find that the drug costs of super spenders is a little over 7 percent of the total spending of the 1 percent most costly cohort of patients.
As the number of people using new medicines increases, their health care costs as a percent of total health care spending has declined.
In 2011, 11.4 percent of total cancer expenditures were for prescription medicines as compared with 3.6 percent in 2001. The proportion spent on inpatient hospital stays declined from 47 percent in 2001 to 35 percent in
Meanwhile, the claim that drug spending is unsustainable is itself unsustainable
The share spent on medicines will remain flat for the rest of the decade.
Express Scripts claims that patients who used $50000 or more of medicines paid from $1773-2782 out of pocket in 2014. This estimate also includes Medicare patients who pay only 95 percent of the cost of a drug after an out of pocket maximum is met and Medicaid patients who have a nominal co-pay of $3-5 for all medicines. Thus, the Express Scripts study masks the burden on consumers in health exchange plans.
Moreover, HHS estimates that out of pocket spending for drugs, as percent total drug expenditures will actually increase 27 percent over the next decade.
This shift began a decade ago when PBMs and insurers created formulary tiers of increasingly higher cost and placed newer medicines for chronic conditions on the highest cost-sharing tier.
Despite overwhelming evidence that higher co sharing reduced use of new medicines and leads to higher treatment costs, PBMs and health plans have placed drugs for cancer, rheumatoid arthritis, and multiple sclerosis in the highest cost-sharing tier. The number of Silver plans in the health exchange that charge patients 30 percent or more has increased to 41% in 2015 from just 27% in 2014.
Such practices have been singled out as violating the civil rights of patients. As the Department of Health & Human Services has stated: “placing most or all drugs that treat a specific condition on the highest cost tiers discourages enrollment by individuals based on age or based on health conditions, in effect (is) making those plan designs discriminatory.”
The fulll CMPI report: Super Misleading: Express Scripts Super Spenders Study will be available Monday..