Press release

Oct. 12, 2017

Mid-Year Drug Trend: Prime held spending increases to 0.8% for commercial clients, generated negative trend for government program clients

Figures build on Prime’s 2016 industry-leading commercial trend as clients benefit from its PBM tools.

ST. PAUL, Minn. – Prime Therapeutics LLC (Prime), a leading pharmacy benefit manager (PBM) serving more than 20 million members nationally, today released mid-year drug trend reports.  The reports reveal positive results for how Prime helped its commercial, Medicare Part D, and Medicaid clients control prescription drug spending in the first half of 2017.

Specifically, the mid-year trend reports showed:

  • Commercial clients saw only a 0.8% increase in drug expenditures compared to the first half of 2016. Costs were held down by substantial negotiated savings and increased use of powerful tools such as Prime’s NetResultsTM formulary and Walgreens-anchored preferred networks.
  • Drug expenditures for Medicare Part D clients decreased by 0.1%. Preferred networks played a major role in driving drug savings.
  • Medicaid clients saw a 1.8% decrease in drug expenditures. Increased use of Prime’s PBM tools, proactive collaboration on population management and substantial negotiated savings helped fuel these results.

“Prime is building on our industry-leading 2016 trend with outstanding results in the first half of 2017,” said Jim DuCharme, Prime’s president and CEO. “In partnership with our clients, we achieved these results amid powerful upward forces on drug costs, including continued price increases for highly expensive, brand-name medications that treat serious conditions. Despite these pressures, Prime is delivering significant savings for our clients as we work together to help people get the medicine they need to live better and feel well.”

Each mid-year trend report provides detail on important drivers of trend, and outlines how Prime generated savings in each line of business.

A combination of utilization and price increases for high cost specialty medications continued to put upward pressure on drug costs, particularly for commercial clients. The autoimmune category – with significant brand medication use, growing utilization and increasing costs – was the top expenditure category for commercial clients and ranked second for Medicaid clients. Diabetes medications were also a top spend driver, holding the top spot for Medicaid and Medicare Part D clients and ranking second for commercial clients. Conversely, declining utilization of hepatitis C specialty drugs, with prices that can exceed $26,000 a month, provided some cost relief for most clients across all lines of business.
Increased use of Prime’s PBM tools generated significant savings for our clients and helped fuel low overall trend. These tools include formulary strategy, utilization management, prevention of fraud, waste and abuse, and substantial negotiated savings in the forms of network discounts, rebates, and generic pricing. Savings Prime generated for the first half of 2017 include:

  • Drug trend for commercial clients that adopted Prime’s NetResultsTM formulary was 8-percentage points lower on average compared to clients not using this approach. Total savings for lives covered by NetResultsTM have ranged from $10 to $14 net per member per month (PMPM).
  • Prime’s utilization management efforts to promote appropriate use of medicines exceeded $1 billion in estimated savings across all three lines of business.
  • Incremental negotiated savings also exceeded $1 billion.
  • Prime’s GuidedHealth® alerts identified gaps in care and adherence that generated nearly $200 million in medical cost avoidance and adherence savings across all three lines of business. This illustrates Prime’s ability to deliver value that impacts both medical and pharmacy spending.

Lastly, negative mid-year drug trend in the pain category (-14% in commercial, -12% in Medicare and -8% in Medicaid) builds on Prime’s successes in managing controlled substances such as opioids, including a 71% decrease in commercial members who were at high-risk for misuse.* Prime’s Controlled Substance Management Program offers a comprehensive approach to help address the national opioid epidemic.

“While these trend results are extremely encouraging, it doesn’t change the fact that we continue to see severe drug pricing challenges in the United States,” said David Lassen, chief clinical officer at Prime. “PBMs offer an important counterbalance to these significant and ongoing pressures. Without our diligence on numerous fronts, this picture would certainly be far worse.”

Full-year drug trend reports for 2017 will be released early in 2018.

* Members without cancer and a 6-month average morphine equivalent dose of 90mg or more who receive opioid prescriptions at more than three pharmacies AND from more than three prescribers OR more than five prescribers regardless of pharmacy total.

About Prime Therapeutics

Prime Therapeutics LLC (Prime) helps people get the medicine they need to feel better and live well. Prime manages pharmacy benefits for health plans, employers, and government programs including Medicare and Medicaid. The company processes claims and delivers medicine to members, offering clinical services for people with complex medical conditions. Prime serves more than 20 million people. It is collectively owned by 18 Blue Cross and Blue Shield Plans, subsidiaries or affiliates of those plans.

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Karen Lyons
Director, Corporate Communications