Magellan Rx launches sixth annual Employer Market Insights Report

New report explores traditional, specialty therapy trend impact to employers

June 22, 2023

Employers are struggling to cover the cost of prescription drugs for their employees. According to the Bureau of Labor Statistics, the cost of prescription drugs has been rising at a faster rate than inflation for many years, and this can put a strain on employer budgets. And, as drug therapy costs rise, employees’ out-of-pocket costs go up.

To help employers plan for and mitigate prescription drug costs, Magellan Rx Management (Magellan Rx) has released its Employer Market Insights Report, a one-of-a-kind publication highlighting the key insights that matter to employers.1 The report gives a view of overall pharmacy drug trends, with a breakdown by traditional and specialty drugs, including drivers of trend, key conditions to watch and a three-year trend forecast.

Employer market trends

For 2022, the employer market experienced a double-digit increase in overall pharmacy trend. Driving the increase was the continued growth in specialty drugs and a steep increase in the trend for traditional drugs, primarily driven by increased utilization of therapies used to treat diabetes and weight-loss. However, the specialty trend is forecasted to be considerably lower during the next three years primarily due to the market entry of Humira® and Stelara® biosimilars.

Key topline findings

  • Diabetes and weight loss drugs drive trend, with weight loss drugs comprising 20% of overall trend and 76% of traditional trend. Increases in this category were heavily driven by GLP-1 non-indication use.
  • Traditional pharmacy trend increased by double digits, driven primarily by increased utilization for diabetes and obesity drugs. Diabetes and Asthma/COPD will remain leading conditions by per member per month (PMPM) cost through 2024.
  • Specialty pharmacy trend is in the early stages of experiencing a material shift due to the launch or expected launch of biosimilars for Humira® and Stelara®, providing significant savings opportunities. The slowdown in the autoimmune: anti-inflammatory and multiple sclerosis (MS) conditions will significantly contribute to a specialty trend decrease starting in 2023. By 2025, the top condition by PMPM cost will be diabetes, surpassing autoimmune: anti-inflammatory.
  • Key pipeline products to monitor include: the possible approval of the first pharmaceutical to treat nonalcoholic fatty liver disease (NASH), a highly prevalent condition with very few treatment options, and two respiratory syncytial virus (RSV) vaccines expected to launch in the fall of 2023 during the RSV season.

“This report embodies our deep knowledge of forecasting, trend projections and delivering insights that matter to employers,” said Karim Prasla, vice president, clinical outcomes, advanced analytics, and research for Magellan Rx. “Leading with actionable data, we will continuously assess marketplace events to proactively identify opportunities and deliver solutions that effectively manage traditional and specialty drug spend.”

As a combined company focused on reimagining pharmacy management, Prime Therapeutics (Prime) and Magellan Rx help employers manage the cost of prescription drugs and help ensure that employees are using the most cost-effective medications. Together, Prime and Magellan Rx have deep expertise in drug trend management and the clinical and specialty landscape; they take a holistic, member-centric approach to managing drug spend and optimizing member care. And they provide flexible solutions to help employers improve care, stay ahead of trend and reduce spend.

A small group of employees can have a significant impact on employer spend,” said Matt Patella, vice president and general manager, national and mid-market accounts for Prime. “To help solve for this, Prime and Magellan Rx offer a true partnership with employers, one that puts their needs and the needs of their employees first. And our national scale with deep clinical and specialty expertise helps employers drive down costs, optimize drug access and improve medication adherence.”

Follow Prime and Magellan Rx to better understand ways they are reimagining pharmacy management and enhancing the experience across health care.

1. Methodology and Disclaimer: All forecasts are based on Magellan Rx’s methodology to project trend impact for years 2023, 2024 and 2025. Forecasting results are based on Magellan Rx aggregate data to provide directional results for informational purposes only and may not reflect actual results for individual plan sponsors. Magellan Rx trends may not reflect comparable trends for the Prime employer business. 

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