Higher generic drug use in 2003 slowed the rising cost per prescription to a 7.9% increase

Higher generic drug use in 2003 slowed the rising cost per prescription to a 7.9% increase -- from $51.76 to $55.86. This rate of increase was significantly less than the 13.1% increase from 2001 to 2002, and the lowest rate in the past four years.

Generic drug use increased to a record 48% among Express Scripts' 50 million members during 2003, spurred by the use of several prominent new generics, fluoxetine, omeprazole and lisinopril. The company's overall generic dispensing rate increased to 49% in the first quarter of 2004. The drug spending data was announced in the company's annual Drug Trend Report released today at the Express Scripts Outcomes Conference.

Facing generic competition by the end of 2008 are branded pharmaceutical products accounting for more than $38 billion in sales last year, resulting in significant savings for plan sponsors and their members. Express Scripts' statistics show that for every 1% increase in generic drug use, prescription benefit plan sponsors save 1% off their cost for drugs in providing the benefit.

In addition to the release of new generic drugs, the greater use of generic drugs can be attributed to greater management of the pharmacy benefit by Express Scripts clients. In particular, the company has seen increased deployment of step therapy programs, which promote the use of lower cost brand drugs before stepping up to a more expensive brand.

Also growing in popularity was the Express Scripts High Performance Formulary, which most effectively promotes the use generics and low-cost brand drugs. The 10 plan sponsors that have adopted this formulary since 2002 reversed the typical year-to-year increase in drug costs and saw their drug spending go down.

Launched during the Outcomes Conference was a new generics-focused trend management tool called GenericsWorkSM, which allows plan sponsors to improve cost savings without shifting costs to members. Plan sponsors that implement GenericsWork can increase generic fill rate up to 70% and keep drug spending increases to less than 5% for the succeeding three years – backed up by guarantees from Express Scripts.

"With our industry leading generic utilization rate, Express Scripts is proving that generic drugs are the key to managing the growing cost of prescription drugs and thus making it possible for plan sponsors to continue providing an attractive prescription benefit," said Barrett Toan, chairman and chief executive officer of Express Scripts. He added that GenericsWork uses methods proven by the evidence to increase the use of generics in prescription benefit plans of all sizes.

Overall, the Express Scripts Drug Trend Report found that plan sponsors that implemented two or more trend management program tools for the first time in 2003 saw their drug costs decline by 4.6%. Those who implemented one or more tools for the first time in 2003 saw their costs increase by only 5.9%. Plan sponsors who used at least one trend management program in 2003 saw their drug costs grow by 10.4%.

According to the Drug Trend Report, antihyperlipidemics replaced gastrointestinals as the leading therapy class of 2003 in overall spending. Growing 23.8% from 2002, the annual per-member spend for the class represented almost 14% of the total growth in prescription drug spend.

On the other hand, the annual per-member spend for estrogens and antihistamines decreased by 23.2% and 20.9% respectively because of the introduction of over-the-counter non-sedating antihistamine products and studies questioning the safety of hormone replacement therapy.

The top five categories in total drug spend, which include antihyperlipidemics; gastrointestinals; antidepressants; antihypertensives and anti-rheumatics, contributed nearly 45% of the growth in drug spend. According to Express Scripts, during the previous year, spending grew at a 15.5% rate, the lowest rate of increase since 1997.

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