Prescription drug prices jumped more than 10% last year, according to The Washington Post, marking the third year of double-digit inflation. The U. S. spends almost $3 trillion on health care annually, including nearly $3 billion on prescription drugs.

Here’s an overview of industry trends that could impact employer benefits in the near future:

Pharmaceutical trends

  • Specialty drugs. Medications for conditions like cancer, central nervous system disorders and inflammatory conditions can range from $600 per month to $100,000-plus per year. Among the most discussed: Sovaldi, a $1,000 per pill treatment for hepatitis C.Nearly 700 new specialty medications are under development, a factor that could triple spending by 2020, according to The Pew Charitable Trust.


  • Generic price increases. Between 2008 and 2015, the price of almost 400 generic drugs increased more than 1,000%, according to the Harvard Health Blog. Reasons include industry consolidation, production difficulties and reduced demand for certain medications.


  • Outrageous behavior. Last year, Turing Pharmaceuticals acquired rights to a very old treatment for a parasitic infection, and then raised the price 5,000%, from $13.50 to $750 a pill. The issue is raising eyebrows, and congressional probes are triggering reforms.


  • Merger mania. The landscape is changing with a wave of consolidations and mergers at the retail level. For example, CVS took over Target’s pharmacies, and Walgreens is moving forward with plans to acquire RiteAid, according to Forbes.

Health plan trends

  • Premium increases. The American Academy of Actuaries says the increase in pharmaceutical expenditures will continue to outpace the costs for other medical services in the year ahead. This is one of many issues driving up health plan premiums for 2017.


  • Cost management. Payers are using a variety of benefit designs to control utilization and mitigate costs. These include updated formularies, increased cost sharing, step therapy and prior authorization.


  • Value-based pricing. Deloitte reports that a paradigm shift from volume to value could force pharmaceutical companies to link payment for medications to real, measurable value.

Consumer trends

  • Widespread usage. Roughly 57% of health care consumers take prescription medications, and nearly half of them use three or more prescriptions daily.


  • Price variation. Consumer Reports’ secret shoppers learned that drugs could cost up to 10 times more at one retailer vs. another in the same town. Only 17% of consumers comparison shop today, but that could change as health care transparency garners more attention.


  • Skipped doses. About 1 in 10 people don’t take their medications, or don’t take them as prescribed, because they can’t afford them, according to the Centers for Disease Control. Age is a factor: Adults age 64 and younger are about twice as likely to skimp on medication compared with those 65 and older.
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