- Express Scripts expects traditional (non-specialty) drug trend to remain negative, while CVS Caremark sees traditional drug trend increasing. The outcome has significant implications for the retail pharmacy industry.
- Both PBMs agree that specialty trend will remain high (>15% per year), but Express Scripts sees slightly slower growth.
Here are the data sources:
Is Caremark really better than Express Scripts at managing drug trend? However, I still believe that we can compare the projections.
Drug trend reflects the interaction of cost per drug and total utilization of drugs by the beneficiaries of a PBM-managed plan. Thus, these figures are not directly comparable with the Center for Medicaid and Medicare Services (CMS) total drug expenditure forecasts, which I discus in Who Will Pay for Prescription Drugs in 2021?
Bizarrely, Prime Therapeutics has decided to convert their formerly-useful drug trend report into this goofy cartoon. Sorry, but I can’t puzzle out Prime’s projections. Bigger than the Empire State Building, or something?
The table below summarizes the latest forecasts for overall, traditional (non-specialty), and specialty drug trends. Click the table to enlarge it.
Traditional (Non-specialty) Forecasts
Both PBMs agree that drug trend for traditional drugs will be very low or negative due to the introduction of new generic drugs. The dynamics of utilization and price will have a big impact on retail pharmacy, per Drugstore Sales Drop Along with Drug Trend: Implications for Retail Pharmacy.
However, Express Scripts expects non-specialty drug trend to remain negative. CVS Caremark sees a different pattern, with traditional drug trend becoming positive by 2015.
This divergence parallels the 2012 gap in traditional (non-specialty) drugs that I discuss in Is Caremark really better than Express Scripts at managing drug trend? For 2012, Express Scripts reports that drug trend for traditional drugs was -1.5%, while CVS Caremark reported traditional trend to have been -3.6%.
Utilization appears to be a key difference between the forecasts. Express Scripts expects utilization “to remain relatively stable,” while CVS Caremark expects non-specialty utilization growth to go from -0.5% in 2012 to 0-2% in 2015.
Both PBMs forecast drug trend for specialty drugs will remain elevated, in the 15% to 25% range over the next few years. The factors behind this projected increase are price inflation, greater utilization of existing therapies, and the launch of newly approved products.
Express Scripts projects slightly lower drug trend. As the table above shows, CVS Caremark wide forecast range encompasses this forecast. For example, CVS Caremark projects specialty trend to be from 16% to 26% in 2015, vs. the Express Scripts point forecast of 18.4%.
Key prediction from Express Scripts: “Less than 1% of prescriptions filled in 2012 were for specialty medications, yet they accounted for 25% of total prescription drug expenditures. By 2019 or 2020, specialty drugs are expected to represent 50% of plan sponsors’ overall drug spend.”
Given the projected growth rates shown above, revenues in the pharmaceutical industry will shift from traditional brand-name drugs to specialty drugs. Don't be surprised when it happens.