Thursday, April 10, 2014

Untangling Express Scripts’ 2013 Drug Trend Report

Express Scripts has just released the latest edition of its long-running Drug Trend Report. Start with the Table of Contents. Be forewarned: the report is now a nearly unusable series of more than 100 web pages. (See my tech-whining below.)

If you look hard enough, you’ll find valuable insights into our changing industry, along with data on 2013’s drug trend (the change in prescription drug expenditures of a third-party payer). Here are my highlights:
  • Drug trend for traditional drugs increased by 2.4%, a big turnaround from last year’s -1.5% decline. 
  • Drug trend for specialty drugs increased by 14.1%, its lowest rate since 2007.
  • Specialty drugs accounted for 27.7% of total spending, up from 24.4% in 2012.
  • Specialty spending remains highly concentrated within four therapy classes.
Tomorrow, I’ll look at Express Scripts’ tough talk on hepatitis C drug prices and how this new report illustrates PBMs’ challenges in controlling these costs.


Drug trend—the change in prescription drug expenditures of a third-party payer—has two primary components:
  • Unit costs—the payer’s cost per unit of therapy. Unit costs vary with: 1) inflation in drug prices, 2) shifts to different drug options within a therapeutic class, 3) a shift in mix of therapeutic classes utilized by plan members, and 4) the substitution of generic drugs for brand-name drugs.
  • Utilization—the total quantity of drugs that plan members obtain. Utilization varies with: (1) the number of plan members on drug therapy, (2) plan members’ adherence to their drug therapy, and (3) a change in the average number of days of treatment.
Per the new report’s Methodology page, Express Scripts measures drug trend as “the rate of change in plan costs, which include ingredient costs, taxes, dispensing fees and administrative fees. Rebates are not included as a component of cost.” (Emphasis added.)

Other PBMs use different definitions, as I noted last year in Is Caremark Really Better Than Express Scripts At Managing Drug Trend? I’ll update my comparison after other PBMs release their reports,.


Here’s the report’s summary of 2013 commercial drug trend components. (Medicare and Medicaid trends are reported separately. PMPY = per member, per-year)

[Click to Enlarge]

  • Drug trend for traditional drugs increased 2.4%, due largely to fewer new generic drug launches. Utilization increased by only 0.5%, but unit costs increased by 1.9%.
  • Drug trend for specialty drugs was 14.1%, its lowest rate since 2007. Express Scripts’ explanation: “[F] ewer new medications were approved than in 2012.” The real cause, however, is slower cost growth. Utilization increased by 1.5%, compared with a 0.4% decrease in 2012. Costs increased by a comparatively low 11.6%, compared with 18.7% in 2012.
  • Specialty spending was 27.7% of total pharmacy benefit spending, up from 24.4% in 2012.
  • Specialty spending remains highly concentrated, when compared with spending for traditional drugs. For specialty drugs, treatments for the top four conditions—inflammatory conditions, multiple sclerosis, cancer, and HIV—accounted for 72% of total per-member, per-year (PMPY) spend. For traditional drugs, however, treatments for the top four conditions—diabetes, high blood cholesterol, high blood pressure/heart disease, and ulcer disease—accounted for only 34% of total PMPY spend.
Although Express Scripts has changed its methodology over the years, I assume that it’s sufficiently consistent to create the following chart showing drug trend since 2002. The chart updates Exhibit 35 (page 46) of the 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies.

[Click to Enlarge]


Just my $0.02, but the new report’s technical presentation trended down this year.

Previously, readers could download the whole report. In fact, Express Scripts has helpfully provided a page for downloading all previous reports.

This year, Express Scripts broke their long, dense trend report into more than 100 individual web pages. I hope you have some time, because each page must be loaded separately. While it’s easier to link to specific sections, you will find it essentially impossible to read or search the report quickly.

The site is also slow, buggy, and counter-intuitive.
  • Want to save something to a PDF? Good luck. The formatted pages become raw text with incoherent formatting. The print version also drops sentences from the text. When I tried to print to a PDF from Internet Explorer, my browser crashed.
  • Pages are formatted in columns, but you must scroll to the left (not down) to read a full page. I’m sure this works wonderfully on an iPad, but it’s much less fun on a non-touchscreen laptop.
  • When I used the search function, I got the mystifying message: “The service is temporarily unavailable. Please try again later.” So, I tried again later, and got headline panels that failed to show my search term in context. (Nerds like me switch to Google site search.)
Please, Express Scripts: Provide a PDF download option, like everyone else. I confidently predict an uptick in my mood trend.


  1. Adam - I agree with your comments on the new report. Harder to read and the export function for the images didn't work well. I had to go back to traditional screen captures.

    I was trying hard this year to beat you in reviewing it, but I got distracted yesterday with another project. I just put up my review -

    It will be interesting to see the other reports. CVS Caremark has their client meeting this week (as does Express Scripts) so I expect we'll see their report up soon.

  2. "Screen captures"? Really?!?

    I doubt that's a best practice from Behavioral Science research ;)

  3. Adam—As always, your commentary is clearly written and brings a wry smile to the thoughtful reader. Thank you for calling out the Web goofs and gaffs. ESI needs to publish its technical content so that it is easily accessible by its visitors, viewers and readers. I will stop short of slandering the young, earnest Web designers who probably have never read a print copy of a technical report. Where is consumerology when we need it?!?