Generic drug dispensing reached 2 in 3 prescriptions (64.1%) in 2008 from 59.7% in 2007. Drug trend, defined as growth in prescription drug spending, increased 3.3%.

What’s driving spending up? Diabetes therapies, rheumatological drugs, seizure drugs, antiviral drugs, and cancer and transplant drugs.

What’s pushing spending down? Generic drugs for lowering lipids and OTCs for allergy meds.

Welcome to Medco’s Drug Trend Report, unveiled at the company’s Symposium this week. The report analyzes trends, up and down, in prescription drug spending and utilization. This year, one of the key upward trend drivers is stunning: that the obesity epidemic is a major driver of drug spending — particularly in young people under 18 years of age.

Over-arching the trend is the fact that the recession is forcing payers — self-payers, plan sponsors, employers, governments — to focus on lower-priced alternatives where they exist. The mail order channel is clearly seen as valuable: the volume of prescriptions filled through mail order pharmacies increased 11.6% over 2007.

Mail order appears to be driving value based on the following metric: health sponsors with over 40% mail order volumes experienced negative drug trend.

Health Populi’s Hot Points:
Medco’s CEO David Snow kicked off a teleconference on the 2009 Drug Trend Report with his views on health reform. Having worked in health care for 30 years, Snow offered three mini-prescriptions for health reform:

1. Keep it simple: complexity scares the public.

2. Change needs to be evolutionary, not revolutionary. Build reform plan in logical building blocks.

3. Clearly define private and public sector roles. Government’s role is to promulgate and regulate, snow said; the private sector’s job is to operate and innovate.

Snow then talked about America’s unique, but short, window to achieve big health reform in 2009-2010. He reached back in history to FDR, who who promulgated the New Deal with Social Security. Why could he do this? Because the Great Depression, jobless rates at an all-time high, poverty on Main Street, and the stock market crashed, converged to create a frightened public.

President Obama has that window of opportunity, Snow asserted, where the fear of the public today is tied to the meltdown of financial systems, collapse of real estate markets, and rising jobless rates.

There’s another Fear Factor, though, that can scuttle any significant moves on health reform — that’s when the 3 pillars of reform above (simplicity, evolution/revolution, and private/public clarity) — are overlooked.

Medco is in a favorable seat at this time in health economic history: it promotes the use of value-based medicine and chronic care management. The company has an opportunity to play a big role in managing costs and maintaining quality.
The challenge in the next few years as new, expensive and efficacious drugs come onto the market to address cancers, Parkinson’s, and other conditions will be to ensure that health citizens have access to these therapies and that innovation is encouraged, while the entire episode of care and outcomes are smartly managed.

The right drugs and diagnostic should go to the right person/patient at the right time. The fact that pharmacy is wired gets us part of the way ‘there’ to effective management of complex and chronic disease. But there is more required to get to this Holy Grail: patient engagement, physician alignment, and ongoing integration of new science into scientific practice.