Public Sector Plan Survey Shows 26 Percent Year Over Year Specialty Drug Cost Increase
Data show that specialty drug costs will cost more than inpatient hospitalizations by 2020
WASHINGTON, D.C., JUNE 12, 2018: Today, the Public Sector Healthcare Roundtable released the results of its 2018 Specialty Drug Survey, the second survey in recent years. The 2018 version shows an unsustainable 26 percent year over year increase in spending on specialty drugs over the past three years. The most recent survey included data from 11 public sector plan sponsors, representing 50 healthcare plans nationwide. These plan sponsors ensure healthcare coverage for over 2,200,000 lives with a total drug spend of $3.6 billion, including over $1.2 billion on Specialty Drugs.
“Simply put, the cost of specialty drugs to public sector plans and the members they represent are unequivocally unsustainable,” said Public Sector HealthCare Roundtable Administrator Tom Lussier. “This Administration and the Congress must act swiftly to address the soaring cost of specialty drugs to ensure that public sector workers and their families can afford essential medications.”
The public sector spends over $22 billion per year on health care services and drugs on behalf of public employees, retirees, and their dependents per year. In 2020, it is estimated that public sector plans will spend more on specialty drugs than inpatient hospitalizations. The survey showed that per employee per year costs for pharmacy coverage is expected to be $3,472 by 2020 compared to the expected $3,235 specific to inpatient costs.
The Public Sector HealthCare Roundtable supports a range of policy proposals to address the crisis in specialty drug costs, including address market competition for biologic drugs, increased transparency for research and development and marketing costs, and value-purchasing policies that focus on outcomes over volume. Specifically, the Improving Access to Affordable Prescription Drugs Act (S. 771), introduced by Senator Sherrod Brown (D-OH), would address prescription drug costs by increasing transparency and accountability, boosting access and affordability of key drugs, spurring innovation, and increasing choice and competition. The Public Sector HealthCare Roundtable urges its consideration and passage by Congress.
Download the full report, including a series of possible legislative actions.
NOTE: The survey results were presented at the opening of the Roundtable’s Spring Legislative Forum by Sean Douglass, a Lead Benefit Systems Administrator with Willis Towers Watson. He is a dedicated consultant to the Michigan Office of Retirement Services. Please click here to view a copy Mr. Douglass’ presentation.