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Top 10 Takeaways from the 2020 Pharmacy Trend Report

“These [medical pharmacy] trends continue to be a challenge for all stakeholders involved in the care of patients with complex specialty conditions, making it vital for them to stay current and informed for better decision-making,” said Kristen Reimers, RPh, senior vice president, specialty clinical solutions, Magellan Rx Management.

Medical benefit drug spend, or what we call medical pharmacy, continues to be one of the largest cost drivers when it comes to overall specialty drug trends. At Magellan Rx, we have nearly 20 years of experience in managing this high-cost and complex portion of medical pharmacy spend and have published the industry’s only detailed source for trends related to medical pharmacy for the last 11 years.

Here are the trends you need to know from the eleventh edition of the Medical Pharmacy Trend Report:1

Top 10 Takeaways from 2020 Pharmacy Trend Report | Magellan Health

  1. Commercial per-member-per-month (PMPM) spend has increased 89% from 2009 to 2019.
  2. Medicare remains the highest spend and utilization line of business (LOB) with 10% of members having a medical drug claim.
  3. The average annual cost per member for the top 10 drugs is almost $45,000 for Commercial members.
  4. For medical specialty drugs 30% of members are driving 96% of the spend.
  5. Gene therapy is the top concern for payers in medical pharmacy.
  6. Oncology remains #1 highest-spend category across all LOBs.
  7. The oncology pipeline is forecasted to increase 105% in PMPM spend from $52 in 2019 to $106 in 2024.
  8. There’s a new top five drug list for commercial: Remicade, Neulasta, Ocrevus, Herceptin, Avastin, with Ocrevus entering the top 5 and having an 85% trend.
  9. The highest-cost medical benefit drugs exceed $1M per patient per year.
  10. Biosimilars Renflexis and Inflectra (in the BDAIDs category) market share increased 4-6 percentage points for commercial and Medicare and a substantial 24 percentage points for Medicaid.

Want to dig into these trends and more, including the latest in management strategies to combat rising pharmacy trend? Download your copy of the report.

  1. Unlock the Latest Trends and Emerging Strategies to Manage Rising Medical Benefit Specialty Drug Spend.” Magellan Rx Management Press Release, 20 May 2021. Accessed May 20, 2021.
  2. 2020 Magellan Rx Management Medical Pharmacy Trend Report™, © 2021.



A comprehensive approach to medical pharmacy savings: one plan’s real-word example

As a market leader and disruptor in specialty drug management, Magellan Rx Management has been delivering targeted and innovative solutions for over 16 years to help health plans reduce specialty drug costs on the medical benefit while maintaining a high quality of care for their members. Our suite of solutions can help plans develop customizable, flexible programs to meet some of their toughest challenges.

Why medical pharmacy management matters

With specialty drug costs accounting for nearly half of total drug spend, health plans continue to look for better ways to manage those rising costs while staying ahead of ever-changing market dynamics (like emerging therapies for rare and orphan diseases and new-to-market biosimilars). Specialty drugs administered by healthcare professionals (typically in a provider’s office, hospital outpatient facility, or through home infusion) are paid under the medical benefit—or what we like to call “medical pharmacy”—and remain a leading driver of rising costs. In fact, according to our research, the latest five-year per-member-per-month (PMPM) trend for medical pharmacy spend was 65% in Commercial, 40% in Medicare, and 78% in Medicaid.

A real-life customized solution

One of our health plan customers with a mix of Commercial, Medicare & Medicaid lives was beginning to see significant utilization in specialty medications. They turned to Magellan Rx’s clinical and pharmacy trend experts, who analyzed trend drivers, recommended a multi-pronged approach to management based on their unique data, and collaborated with the plan to implement several programs to maximize effectiveness and meet plan goals including innovative strategies such as a drug wastage solution.

So, what are the results?

Our health plan partner realized a cost reduction in just one year by implementing a suite of solutions alongside our team of medical pharmacy experts—resulting in a nine percent decrease in medical drug spend! Based on this particular’s plan size and benefit design, each solution contributed demonstrably to overall savings.

Results-Table-02

Individual program implementation is dependent on plan size and other factors. These flexible solutions can also operate outside of the traditional payer-PBM relationship. Now, you can plug in to the extensive clinical expertise and experience at Magellan Rx by delegating specialty and medical drug management services while retaining a separate pharmacy benefit manager.

Are you looking for a customizable, flexible solution to combat rising specialty spend? Connect with us today!




Top 10 Pharmacy Trends You Need to Know in 2019

Understanding pharmacy trend is important for developing robust, cost-saving specialty drug management strategies. But did you know you can’t really compare one trend number to another? Every PBM uses different methodologies, data sets, and calculations to arrive at their pharmacy trend number.

Additionally, one of the largest cost drivers of specialty spend today—prescriptions drugs dispensed through the medical benefit—is typically missing from pharmacy trend statistics. When you combine pharmacy benefit with medical benefit spend, you get what we like to call big ‘T’ Trend. In fact, you need to combine both to see there is as much, if not more, specialty spend going through the medical benefit today that is going unmanaged.

The ninth edition of the Magellan Rx Management Medical Pharmacy Trend Report includes a comprehensive medical pharmacy trend analysis and data benchmarking for provider-administered drugs which are infused or injected and paid under the medical benefit.

What are the top medical pharmacy trends you need to know to stay current with your organization’s management strategies?

  1. Per-member-per-month (PMPM) spend on provider-administered drugs increased by 18% for commercial members in one year, reaching nearly $30 PMPM. The five-year trend is 68% — the highest jump in 9 years of reporting.
  2. Across all lines of business (LOB), more than 90% of total drug spend on the medical benefit is being driven by a fraction of members who are taking specialty medications.
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  3. Emerging oncology treatments, particularly immunotherapy, are a major medical pharmacy trend driver. Keytruda had an impactful increase in utilization, with PMPM trend rising upwards of 200% and breaking into the top 15 drugs across all LOBs.
  4. In Medicare, oncology and oncology-support drugs accounted for 58% ($30.17) of the medical benefit drug PMPM spend.
  5. Chimeric antigen receptor (CAR) T cell gene therapies are predicted to grow 530% by the year 2022.
  6. Factor products to treat hemophilia demonstrated the highest trend in both commercial (62%) and Medicare (185%), ranking #5 and #6, respectively. The average cost per claim is close to $20,000 across both LOBs.
  7. Although 68% of payers are now using a site of service (SOS) program, SOS continues to be a concern with drugs administered in the hospital outpatient setting continuing to cost 2-3 times more than physician offices and home infusion.
  8. When it comes to biosimilars, 64% of payers stated that the price of the biosimilar most impacted reimbursement decisions.
  9. The top five drugs in commercial (Remicade, Neulasta, Rituxan, Herceptin, and Avastin) have remained consistent over the last nine years of reporting. However, all of these drugs have FDA-approved biosimilars that should all be available on the market in the next few months and, looking ahead, this landscape may look different over the next few years with this increased competition.
  10. The number of billion-dollar drugs in 2017 was 34 and is projected to grow 26% to 43 drugs by 2022. All 43 are currently available on the market today, representing increased utilization and growth of these products in the next five years and reinforcing the need for proper utilization management, targeted dosing optimization and other management tactics of these high cost medical specialty drugs which will help to promote quality of care and prudent savings of healthcare dollars.

For more in-depth analysis on the latest in medical pharmacy trend and spend, watch our on-demand webinar!