Using lower cost generic prescription drugs is vital to holding down the growth rate of health care spending. A new report from the Generic Pharmaceutical Association identifies generic agents in the cardiovascular and central nervous system (CNS) categories as delivering nearly 60 percent of the saving.

Generic CNS medications have contributed significantly to the increase in savings, which was 10 percent from 2009 to 2011. Metabolism drugs that have gone generic also were a source of health care savings in 2011, reducing costs by nearly $27 billion. The report says that since 2002, the savings generated by products in the metabolism drug class has grown an “astounding 500 percent.” The drugs in these three categories account for nearly three fourths of all savings generated by generic drugs in 2011.

The report says the greatest 1-year savings growth came in the oncology category. Savings from the usage of generic oncology products topped $10 billion in 2011, more than three times the $3 billion that generic cancer drugs saved in 2010. Larger savings were attributed primarily to the introduction of generic versions of docetaxel (Taxotere) and gemcitabine (Gemzar), for which brand patents have expired.

On the biopharmaceutical front, the cost-control news is good, too. The report says that the savings seen with traditional generic drugs can be duplicated in the biosimilars market. Estimates from various economic impact studies suggest the savings from $42 billion to $108 billion over the first 10 years that biosimilars are sold.

In addition, the Congressional Budget Office estimates that competition from biosimilars would yield substantially lower prices for lifesaving treatments. The CBO estimates that biosimilars initially will be priced about 25 percent below their brand-name counterparts, and after several years of competition, would be priced as much as 40 percent below the brand.

Therapeutic category generic savings by year ($ billions)

Data extrapolated for years 2004–2006.

Source: Generic drug savings in the U.S. Fourth annual edition: 2012. Generic Pharmaceutical Association http://tinyurl.com/generic-save

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.