Editorial and Design Staff
BROOKE KACHURA
Senior Director, Marketing
JENNIFER BOSTICK
Senior Graphic Designer Contributors
KARIM PRASLA, PHARMD, MS, BCPS
Vice President, Clinical Outcomes, Advanced Analytics, and Research
KATIE LOCKHART, MA
Senior Manager, Forecasting and Pharmacoeconomics
DANNY MELSON, MS
Senior Forecasting and Pharmacoeconomics Analyst
CHRIS SALIBA, PHARMD
Vice President, Enterprise Solutions ©
EMPLOYER MARKET TRENDS
Welcome to the 6th edition of the Magellan Rx Employer Market Insights Report.
The Employer Market Insights Report is a one-of-a-kind publication highlighting the key insights that matter to your business. The report gives a view of overall pharmacy drug trends, with a breakdown by traditional and specialty drugs, including:
Drivers of Trend Three-Year Forecast
Diabetes and Weight Loss Drugs Drive Trend
Key Conditions to Watch
In 2022, the pharmacy trend in the employer market experienced an overall trend of 14.4%, with a 17.9% and 10.5% increase in specialty and traditional drugs, respectively (Fig. 1). The double-digit increase in traditional trend is a stark contrast to the flat and even negative trend seen in recent years. This higher trend was in large part due to the significant increase in the usage of drugs used for diabetes and obesity, such as Ozempic® and Wegovy®, products that have recently gained mainstream attention on social media due to their potential for weight loss. Specifically, both products combined to account for 20% of the overall trend and 76% of traditional trend (Fig. 3); Ozempic® accounted for almost half of the diabetes trend (Fig. 4). The main trend driver for specialty was higher utilization, which increased by 10.2%, while specialty unit cost increased by almost 8% (Fig. 2). The specialty trend is forecasted to be lower during the next 3 years due to the entry of Humira® (2023) and Stelara® (2025) biosimilars (Fig. 1). Forecast models project traditional trend to return to be less than 5% during the next 3 years, primarily due to the expected patent expirations for Latuda® and Vyvanse® (Fig. 1).
2022 2023 2024 2025
Methodology and Disclaimer
• All forecasts are based on Magellan Rx Management’s methodology to project trend impact for years 2023, 2024, and 2025. All forecasts are based on available market and product information as of June 9, 2023. Forecasts are subject to change if marketplace events evolve. Forecasting results are based on aggregate data to provide directional results for informational purposes only and may not reflect actual results for individual plan sponsors.
• Specialty drugs include only those covered on the pharmacy benefit and are based on MRx specialty definition.
• Cost per claim is based on average wholesale price (AWP); cost = employer liability after cost share.
• Overall drug trend and forecast is based on plan paid per member per month (PMPM) change year over year after rebates and network discounts.
• Specialty drug trend and forecast is based on plan paid PMPM change year over year after rebates and network discounts; individual condition drug trend and forecast is prior to rebate impact but includes network discounts.
• Traditional drug trend and forecast is based on plan paid PMPM change year over year after rebates and network discounts; individual condition drug trend and forecast is prior to rebate impact but includes network discounts. Utilization is divided into consumers (utilizers) and consumption (days, supply per utilizer).
• Historical and forecasted drug trends for overall, specialty, and traditional categories are reported at a net level (with rebates); specific condition and drug trends are reported at a gross level (without rebates).
TRADITIONAL PHARMACY TRENDS FORECAST
Traditional pharmacy trend in 2022 increased by double-digits for the first time in the history of this publication. This was driven primarily by increased utilization for diabetes and obesity drugs. Ozempic® had the highest trend of any product this year, outpacing even some specialty drugs, such as Humira® and Stelara®, while Wegovy® had the fifth highest trend of any drug. Diabetes as a whole is expected to become the top overall condition by 2024, with a projected cost per member per month (PMPM) of $22.21 (Fig. 6), slightly above autoimmune: anti-inflammatory condition. The continued growth in the diabetes condition is mainly driven by GLP-1 and SLGT-2 therapies due to their cardiovascular benefit, and possibility for first-line indication. Asthma/COPD will remain the second leading condition in the traditional space until 2024; however, it will be passed by anti-clotting therapy category in 2025 with a forecasted cost PMPM of $5.19 (Fig. 6). Overall, the traditional trend is forecasted to be less than 5% between 2023 and 2025 (Fig. 5), although diabetes trend will remain around 11-12% between 2023-2025 (Fig. 7). The condition contributing to the decrease in the traditional trend between 2023-2025 is ADHD, which is expected to experience a negative trend due to the patent expiration of Vyvanse® (Fig. 7); patent expiration for Latuda® will also contribute to the slowing of the traditional trend.
SPECIALTY PHARMACY TRENDS FORECAST
Specialty pharmacy trend is in the early stages of experiencing a material shift due to the launch or expected launch of biosimilars for Humira® and Stelara®, providing significant savings opportunities. The specialty trend in 2022 increased by 17.9% (Fig. 8) primarily due to the continued increase in utilization and cost in the autoimmune: anti-inflammatory condition, led by Humira® and Stelara®. Starting in early 2023, the first Humira® biosimilar was released, with the majority expected to launch in July 2023. Plan sponsor coverage policies will determine adoption of biosimilars, but current forecast models expect considerable net savings. This shift in the autoimmune: anti-inflammatory condition will significantly contribute to the specialty trend decreasing starting 2023 and be close to zero by 2025 (Fig. 8). The forecasted cost PMPM for the autoimmune: anti-inflammatory is expected to be around $20 in 2025, down from $23.46 in 2022 (Fig. 9). This shift will now make the autoimmune: anti-inflammatory condition second overall behind diabetes from a cost PMPM perspective. Multiple Sclerosis, with the recent patent expirations for Gilenya® and Aubagio®, is also expected to contribute to the slowdown in the specialty trend, with an expected negative trend over the next 3 years (Fig. 10). Oncology will remain the second leading condition in specialty pharmacy, with a cost PMPM of around $9 by 2025 (Fig. 9). Additionally, atopic dermatitis is is forecasted to experience a trend of 20-25% annually between 2023-2025 (Fig. 10), while becoming the third leading condition in the specialty category with a cost PMPM of about $3.66 by 2025 (Fig. 9).
PIPELINE FORECAST
The brand pipeline for 2024 and 2025 includes therapies to treat conditions such as atopic dermatitis, respiratory syncytial virus (RSV), depression, and non-alcoholic steatohepatitis (NASH), amongst others (Table 1). Some of the key pipeline products to monitor include lebrikizumab, an immunosuppressant in the dermatology space; two new vaccines for RSV, Beyfortus® and Arexvy®; zuranolone, a novel new 14-day treatment for major depressive disorder with rapid onset symptom relief; and possibly the approval of the first pharmaceutical to treat NASH, a highly prevalent condition with very few treatment options. The two RSV vaccines are expected to launch in the fall of 2023 and experience utilization among infants (Beyfortus®) and adults 60 years of age and over (Arexvy®) during the RSV season. The treatment for NASH, resmetirom, is expected to contribute $0.05 and $0.09 PMPM in 2024 and 2025, respectively.
