Spending on prescription drugs will rise more steeply in a couple of years, with researchers predicting an average annual 6.5% increase between 2015 and 2022, according to a study in the October issue of Health Affairs.

The study, from the Centers for Medicare & Medicaid Services, notes that this is a significant change from what’s been going on lately. “In 2012 prescription drug spending is estimated to have accounted for $260.8 billion in health spending — a decline of 0.8% and down from 2.9% growth in 2011.”

The authors attribute the slowdown in part to brand-name drugs losing patent protection and in part to increased use of generics.

“In 2014, prescription drug spending growth is projected to accelerate to 5.2%, driven by increases in the use of prescription drugs by people who are newly insured and those who move to more generous insurance plans.” The spending is expected to rise “as the economy improves and the impact of patent expirations continues to diminish.”

Those growth in the newly ­insured is a result of the Affordable Care Act, whose effect the authors also measure, though they admit that much remains uncertain.

“The supply-side effects of the Affordable Care Act, such as changes in providers’ behavior in reaction to an influx of newly insured patients, remain highly speculative and are not included in these estimates.”

Prescription drugs’ share of GDP

2014 growth rates by sector

Source: “National Health Expenditure Projections, 2012–22: Slow Growth Until Coverage Expands And Economy Improves,” Health Affairs, October 2013

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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.