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Volume Fueling Rise in Part D Specialty Derm Drug Spending

Volume Fueling Rise in Part D Specialty Derm Drug Spending

Medscape6 days ago
Prescription volume for specialty medications, not price hikes, largely seems to be the main factor in the ongoing huge increase in Medicare Part D dermatology drug spending, according to a new study.
Harvard Medical School researchers reported that from 2013 to 2022, prices were higher and rose faster for specialty medications, but that 80% of the increase in spending 'was due to increased prescriptions, not prices.'
Price increases only accounted for 20% of the total growth in Medicare Part D dermatologic drug spending during the study period, lead author Edward L. Kong, PhD, told Medscape Medical News .
Specialty medications — primarily immunomodulators — 'are just very expensive in general,' and are being rapidly adopted by clinicians, which is driving increased spending, said Kong, who is pursuing an MD degree at the Harvard-MIT Health Sciences and Technology program.
Kong and Arash Mostaghimi, MD, MPA, MPH, medical director of the dermatology consult service at Brigham and Women's Hospital, and associate professor, Harvard Medical School, both in Boston, published their findings in JAMA Dermatology on July 16.
They examined some 95 million prescriptions for Medicare beneficiaries, written by almost 25,000 dermatologists and dermatology-focused advanced practice clinicians. Inflation-adjusted spending increased an average of 16% a year, reaching $2.95 billion in 2022. Over the study time period, specialty drug spending increased just under 30% a year, reaching $2.4 billion in 2022. Spending on nonspecialty medications only grew 0.7% annually during the study period.
By 2022, specialty medications accounted for 81% of all dermatology drug spending, having risen from a third of spending in 2013. Even so specialty medications only represented about 3% of all Medicare Part D dermatology prescriptions in 2022.
Four of the specialty drugs were introduced before 2013: adalimumab (Humira), etanercept (Enbrel), ustekinumab (Stelara), and vismodegib (Erivedge). Six came on the market after 2013: apremilast (Otezla), secukinumab (Cosentyx), ixekizumab (Taltz), dupilumab (Dupixent), guselkumab (Tremfya), risankizumab-rzaa (Skyrizi), and sonidegib (Odomzo).
The older medications had higher price growth than the six newer therapies during the study period. Humira, at the high end, had a 12% price increase per year, while Skyrizi, at the low end, had a 5% yearly decrease.
It's possible that biosimilars for Humira and Stelara — introduced in 2023 and this year — might help restrain cost growth, wrote Kong and Mostaghimi. The introduction of generic oral JAK inhibitors such as tofacitinib may also put a dent in spending, they noted.
Medicare will also likely achieve cost savings in 2026 on Enbrel and Stelara, which are included as part of a law — the Inflation Reduction Act— that gave the health program the power to negotiate prices of certain medications. Patients for affordable drugs now estimate that list prices for Enbrel will drop from around $7000 to $2355 and for Stelara from $13,836 to $4695.
The study did not examine the value of the high-cost specialty drugs, but the rise in prescriptions — indicated by each of the 10 achieving a 1% market share — shows that the medications are being embraced, wrote Kong and Mostaghimi.
The authors' work is similar to other studies that have documented major increases in Medicare Part D dermatologic drug spending being driven in part by increased adoption of specialty medications. A 2022 study in the Journal of the American Academy of Dermatology found that from 2013 to 2019, the price of six dermatology drugs in the top 10 most-prescribed medications decreased, mostly among nonspecialty medications. But in 2013, Enbrel was the most expensive medication in the top 50 most prescribed. Enbrel had been replaced in 2019 by Humira.
In 2020, researchers reported in the Journal of Dermatological Treatment that annual spending on immunomodulator medications by Medicare Part D increased 303% from $1.7 billion in 2012 to $6.9 billion in 2018. 'Immunomodulator spending is growing and may be more substantial than previously reported posing significant burden on patients and the health system,' the authors wrote.
Kong and Mostaghimi agreed, writing that 'the growing significance of specialty medications will have important implications for healthcare costs and patient affordability.'
Kong reported receiving grants from the National Institute on Aging. Mostaghimi reported receiving personal fees from Hims & Hers Health, AbbVie, Sun Pharma, Digital Diagnostics, Eli Lilly, Equillium, ASLAN Pharmaceuticals, Boehringer Ingelheim, Figure 1, Indomo, Olaplex, Legacy Healthcare, Pelage, Q32 Bio, Astria Therapeutics, ACOM Health, Bioniz, Concert, and Digital Diagnostics; equity from ACOM Health, Figure 1, and Hims & Hers Health; licensing or royalties from Concert and Pfizer; and research funding from Aclaris, Concert, Eli Lilly, and Incyte outside the submitted work.
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