Express Scripts charts 'pharmaceutical waste' in 2013 Drug Trend Report

Many people in pharma and healthcare look closely at the data in the Express Scripts Drug Trend Report, just issued by that company, the leading pharmacy benefit manager (PBM) in the country. How Express Scripts manages pharmacy benefits for its clients—and the resulting effects on prescription trends and reimbursement—are both challenges and opportunities for drug developers.

But one of the more intriguing aspects of its report is a calculation* of what it calls “pharmaceutical waste:” healthcare and drug costs that could have been avoided had better medication management been followed. There’s a bit of a marketing positioning going on; one of the sources of “waste” is not using a specialty pharmacy like Express Scripts’ own Accredo Pharmacy; but overall the analysis poses a challenge: if lowest-cost (to the payer) distribution were applied broadly, and if medication regimens were followed rigorously, what would be the result?

And the answer, surprisingly, is a savings of $427.9 billion to the US healthcare system. That’s more than the $329 billion spent on all pharmaceuticals. The bulk of that comes from better medication adherence, and there is widespread evidence (through such programs as accountable care organizations [ACOs] and the “meaningful use” requirements of federal support of electronic health-record [EHR] systems) that the entire healthcare ecosystem—including pharma companies—are paying more attention to adherence.

The sources of this waste, says Express Scripts, breaks down this way:

• Waste due to poor drug choices—$53.4 billion was spent unnecessarily on higher-priced medications when more affordable, clinically equivalent alternatives were available.
• Waste due to poor pharmacy choices—$37.4 billion could have been saved if patients had used the most cost-effective and clinically appropriate pharmacies, including narrower networks of retail pharmacies, home delivery and specialty pharmacies like Accredo.
• Waste due to poor health choices—$337.1 billion was spent on avoidable medical and pharmacy expenses as a result of patients’ nonadherence to medication treatments.

Express Scripts touts its ability to influence patient behavior, including its proprietary platform, Health Decision Science, which analyzes adherence patterns; left unsaid is whether savings in drug choices and (as it puts it) “poor pharmacy choices” would occur apart from Express Scripts’ benefit management.

Geography

Of equal interest is the dramatic variation in where waste occurs—primarily in the South, with more moderate performance in a middle belt of the country, and the best performance in the northern-most regions. (New York State is a notable outlier here.) According to Express Scripts, “The three states with the highest waste (more than $1,500 per person) in 2013 were Mississippi, Georgia and Texas. Vermont and Minnesota—for the second year in a row—had the lowest amount of waste per person, but it still added up to about $1,000 per person in costs that provided no additional health benefits.”

There are other studies that show variations in both types of medical procedures and quality of care nationally; the question to pose is, is it a reasonable goal to try to pull up the entire nation to an equivalent level of care?

*Available at: http://lab.express-scripts.com/drug-trend-report/trend-drivers/pharmacy-related-waste-map