Oncology Continues to be Top Spend Category in Medical Pharmacy

Magellan Rx predicts oncology and high-cost rare disease treatments will continue to drive medical pharmacy spend in commercial, Medicaid and Medicare.

Over the next three years, spend for medical benefit drugs is forecasted to increase, mainly driven by oncology and high-cost, novel molecular entities in the rare disease category, predicts the recently released Magellan Rx Management Medical Pharmacy Trend Report. The report, which highlights medical drug spend trend across commercial, Medicare, and Medicaid, found that oncology continued to be the top spend category, accounting for 39% of commercial spend, 53% of Medicare spend, and 27% of Medicaid.

In the commercial space, claim volume had the highest influence on aggregate trend, because of more patients receiving medical drug therapy in 2021 compared with 2020. In government programs, per-claim costs had the largest impact on aggregate trend because of patients receiving more of the higher cost medical drug therapies in 2021 compared with 2020.

Magellan, now part of Prime Therapeutics, found that the medical pharmacy spend across the payer groups has been influenced by the COVID-19 pandemic. The restrictions resulted in a sharp drop in utilization of less-expensive drugs, while utilization of more-expensive therapies remained constant.

“In looking at utilization for medical pharmacy drugs, overall utilization and claim volumes were significantly impacted, especially throughout 2020,” Kristen M. Reimers, RPh, senior vice president, Specialty Clinical Solutions, Magellan Rx Specialty, told Formulary Watch. “While that continued to increase in 2021, it did not return to pre-pandemic levels.”

Magellan Rx collected utilization and trend data through secondary analyses of commercial, Medicaid and Medicare Advantage health plan claims data for 2020 and 2021. Claims data were analyzed across 1,010 healthcare common procedure coding system and several outpatient sites. In some cases, data from the past four years were analyzed to show longer trend data.

In Medicare, claims in oncology and non-oncology fell, as did claims for lower cost drugs. Total utilization decreased across all therapies in Medicare because of lockdowns related to the COVID-19 pandemic, Reimers said. “This population showed lower office visits, which disrupted treatment patterns along with delays in care due to the pandemic.”

Going forward, Reimers said forecasted trends show expanded utilization of current oncology agents, including the growth of the immuno-oncology agents with expanded indications. Approvals of new drugs for rare and ultrarare disease states will also continue to influence trend growth. Specifically, CAR-T therapies are expected to grow even further with potential development of off-the-shelf agents.

This may improve patient access and decrease risks of significant adverse reactions,” she said. “These agents largely treat hematologic malignancies today and are being studied currently for use in solid tumors.”

Since 2019, oncology biosimilars have contributed to an estimated 7% reduction in total oncology per member per month (PMPM) spend for commercial markets. The estimated reduction in total oncology PMPM spend for the government markets was a 1.6% and 0.5% reduction in Medicare and Medicaid markets respectively.

“The influence of biosimilars on medical drug spend has been impactful especially in oncology,” Reimers said. “The pharmacy benefit has not seen as many products launch but the Humira biosimilars have been highly anticipated for years. In general, they could potentially decrease spend by approximately 10% to 15% depending on costs and market competition.”

Next year, seven biosimilars referencing AbbVie’s rheumatoid arthritis drug Humira (adalimumab) are expected to be launched, with Amgen’s Amjevita being the first in January. Several PBMs, including Optum Rx and Express Scripts, have already made decisions to include some of these biosimilars as preferred products alongside Humira. Optum Rx specifically has said they will include Amjevita and two other biosimilars on the Select and Premium formularies. Express Scripts has not yet indicated which of the biosimilars will be included.

Related: OptumRx to Cover Amgen’s Biosimilar of Humira

Additionally, Reimers said gene therapies to treat patients with hemophilia, beta-thalassemia and Duchenne muscular dystrophy will also drive trend in the coming few years. “Overall cell and gene therapy are projected to grow by approximately 800% over the next five years,” she said.

But Magellan anticipates most of the future spend on rare disease will be in Medicaid. “The Medicaid population tends to be younger so with the pipeline of new agents for treatment of children with rare genetic disorders the influence on trend in Medicaid is seen more dramatically in this category than in other lines of business,” Reimers said.