The median annual price of the 100 top-selling drugs in the US has increased more than sevenfold since 2010, according to a new analysis published by EvaluatePharma ® .
By Jonathan Gardner, Deputy News Editor, EP Vantage
Seven drugs in the top 100 now cost more than $100,000 per patient a year, up from four in 2010. And the number costing less than $1,000 has been cut in half to 19, a sign of pharma’s emerging price strategy, according to the white paper. This step change will challenge payer coverage as the Affordable Care Act (ACA) adds millions of patients to health insurance rolls in coming years.
The median annual per-patient revenue of these top 100 drugs stands at $9,396, compared with $1,258 in 2010, according to the analysis derived from EvaluatePharma’s USA Sales, Volume & Price module. Confirming the pharma industry’s focus on orphan diseases in recent years, the median population treated by the drugs in the top 100 has shrunk from 689,604 to 146,252. (See diagram 1, page 24, top)
Illustrating this change, the top seller in 2010 was blood thinner Plavix from Sanofi, a product that at its peak was taken by five million Americans and generated $1,200 a year in revenue per US patient. In 2014, the top seller is forecast as hepatitis C antiviral Sovaldi from Gilead Sciences, which will generate $56,000 in revenue this year on average for each of its 135,000 US patients, after discounts. (See diagram 2, page 25, top)
In 2010, 67 of the top 100 selling drugs cost less than $5,000 a year, compared with 43 today. By comparison, nearly half of all the top selling drugs, 47, cost more than $10,000 in 2014, and 19 cost more than $50,000, compared with 26 and seven in 2010. These analyses are detailed in the report ‘Budget-Busters: The shift to high-priced innovator drugs in the USA, published by market intelligence firm Evaluate Ltd., and are based on their EvaluatePharma service analysis which covers the pharmaceutical and biotechnology sectors.
As for the increasing role of biologicals – which, because of the complex science behind them as well as the still-unclear regulatory pathway for biosimilars are less vulnerable to competition than small molecules – the number in the top 10 sellers has risen to seven from three in 2010. This shift means that they could resist price erosion when their patents expire, unlike Plavix, Pfizer’s Lipitor and Merck & Co’s Singulair, to name three that have fallen out of the top 10 since 2010. (See diagram 3, page 26, top); (See diagram 4, page 26, middle); (See diagram 5, page 26, bottom)
The trends identified in this report have not gone unnoticed at the highest levels in the US, as government forecasters have projected a 6.8% year-on-year increase in national prescription drug expenditures in the 2013-14 period, one of the biggest rising sectors. Non-physician professional services and nondurable medical goods were the two major expenditure categories that grew more, according to health forecasters from the Centers for Medicare and Medicaid Services (CMS).
Among the factors the CMS forecasters cite is the newly insured population under ACA as well as those who can now afford more generous health coverage under ACA. Writing separately in the policy journal Health Affairs, the CMS forecasters specifically called out the launch of high-priced hepatitis C drugs like Sovaldi and its competitors as a factor.
Private payers have pushed back by placing these higher-priced specialty drugs on higher coverage “tiers” requiring a greater out-of-pocket expenditure by enrollees or other restrictions – Sovaldi is notable in that 3.2 million Americans are estimated to be infected with hepatitis C but insurers and even physicians believe treatment should be prioritized for advanced patients.
Friction will only increase as more Americans obtain health insurance under ACA – private and government coverage have both expanded, and both stakeholders will be demanding clear and increasingly rigorous evidence that newer, more expensive drugs show a clear benefit over older drugs before authorizing wider usage.
Pharma can argue that prices for these newer drugs are justified because they avert other costs in the healthcare system like hospitalization or invasive procedures. But if these pricing trends are to be sustained, the industry will need to be better at showing this cost-effectiveness, and in order to maintain the trust of the people controlling the purse strings it needs its calculations to turn out to be true.
To download the full EvaluatePharma® budget busters report from market intelligence firm Evaluate Ltd. visit: http://www.evaluategroup.com/budget-busters.
To contact the writer of this story email Jonathan Gardner in London at firstname.lastname@example.org or follow @JonEPVantage on Twitter. EP Vantage is Evaluate’s editorial arm.
Jonathan Gardner extends the editorial reach of EP Vantage with his wealth of knowledge on the US primary healthcare market and regulatory affairs. Jonathan joined EP Vantage having worked as freelance journalist for a number of respected healthcare publications, including Elsevier Global Medical News. Jonathan also served as communications manager for Health Affairs Journal and as bureau chief for Modern Healthcare.