Welcome to the seventh edition of the Prime Therapeutics and Magellan Rx (Prime/Magellan Rx) Employer Market Insights Report.
OVERALL EMPLOYER
MARKET TRENDS
In 2023, the pharmacy trend in the employer market was 7.2%, with a flat (0.4%) traditional drug trend and a 14% specialty trend (Figure 1).
Within this one-of-a-kind publication, you’ll find critical pharmacy trend insights that will help you make the best decisions for your business and the people you serve.
Explore in-depth insights on overall pharmacy, traditional and specialty drugs and trends, including information on:
The main driver of overall trend was drug mix — the shift between high- and low-cost drugs within a therapeutic class or condition. This was driven in part by continued growth of GLP-1 products for diabetes and obesity, such as Ozempic®, Wegovy ® and Mounjaro®. The total number of claims associated with these products doubled in 2023 compared to 2022, likely due to GLP-1s receiving new indications and label expansions, along with continued popularity in social media and media coverage. Wegovy ® and Mounjaro® specifically saw triple-digit percentage increases in utilizers (consumers), leading to a combined $2.82 PMPM impact on 2023 trend (Figure 3).
Overall, diabetes and obesity drugs accounted for 37 % of cost increase in 2023. Autoimmune — anti-inflammatory drugs accounted for another 30%.
Although traditional pharmacy trend stayed at a relatively flat 0.4% (Figure 1), the diabetesspecific trend is expected to grow from about 22% of total spend in 2023 to approximately 27 % by 2026, driven by increasing demand for GLP-1s. And GLP-1s are forecasted to almost double in market share, from approximately 11% in 2023 to 20% by 2026.
Specialty trend grew by 14% (Figure 1), primarily due to increased utilization. The number of consumers grew by 6.4% year-overyear,1 led by drugs such as Skyrizi®, Dupixent® , Rinvoq® and Xolair ® (Figure 4). Increased utilization drove specialty expenditures up by 10.2%, while unit cost accounted for 3.8% of the increase (Figure 2).
Looking ahead, we forecast the specialty trend to decrease and remain in the single digits over the next three years (Figure 1). This lower forecast is due to the recent entry of biosimilars for Humira® (in 2023) and future entry of Stelara® biosimilars in 2025.
Overall net cost trend is forecasted to decrease over the next three years due to a slowdown in the growth of specialty spend. This is driven by the introduction of biosimilars to treat anti-inflammatory autoimmune conditions (Figure 4).
FIGURE 2: 2023 DRUG TREND DRIVERS
FIGURE 3: KEY TRADITIONAL DRUG UTILIZERS IMPACT
FIGURE 4: KEY SPECIALTY DRUG UTILIZERS IMPACT
Dupixent®
TRADITIONAL PHARMACY
TRENDS FORECAST
Traditional pharmacy trend was well managed in 2023 at 0.4%. Drug mix had a major influence and alone would have driven traditional trend to nearly 6%; however, this was mitigated by favorable cost share and pricing impacts overall (Figure 2 on Page 2).
Drug mix for diabetes and obesity contributed $2.43 PMPM (48%) of the total $5.21 PMPM increase in 2023, due to continued growth of GLP-1 products for these conditions. As a note, despite overall GLP-1 growth, market share for GLP-1s such as Trulicity ®, Victoza® and Bydureon® decreased because of the continued shift to Ozempic®. In 2023, diabetes matched the autoimmune – anti-inflammatory condition as the highest spend category, with both having approximately 22% of market share by spend.
Over the next three years, the traditional trend forecast is expected to remain relatively flat with minimal fluctuation (Figure 5), driven by overall slowed growth in the top traditional conditions. For example, asthma/COPD is forecasted to be flat by 2026. The migraine trend is forecasted to grow by 14%–24% over the next three years, which is still less than the 36% trend experienced in 2023. ADHD is forecasted to decrease by 7.9% in 2024 due to the Vyvanse® generic entry before remaining nearly flat in 2025 and 2026 (Figure 6). We expect diabetes to continue showing high
single- to double-digit growth; however, this is considerably less than the 25.1% increase experienced in 2023 for Ozempic® and Mounjaro® (Figure 7 ).
The primary growth drivers for traditional trend continue to be GLP-1 medications, such as Ozempic®, Mounjaro®, Jardiance®, Zepbound® and Wegovy ®. Mounjaro® specifically saw a rapid uptake in 2023, as it was released in 2022; we expect this will continue to impact trend in 2024. Anti-clotting agent Eliquis® joins these high-growth drivers and is forecasted to grow by 9%–10% due to expanding indications and the increasing prevalence of conditions requiring anti-clotting therapy as the U.S. population ages (Figure 7 ).
5: TRADITIONAL DRUG 2023 TREND AND 2024–26 FORECAST
The primary growth drivers for traditional trend continue to be GLP-1 medications.
FIGURE
FIGURE 6: KEY TRADITIONAL CONDITIONS TREND FORECAST (2024–26)
7: KEY TRADITIONAL PRODUCTS TREND FORECAST (2024–26) Migraine Diabetes ADHD Anti-clotting therapy Asthma/COPD
FIGURE
SPECIALTY PHARMACY TRENDS FORECAST
Specialty pharmacy trend increased by 14% in 2023. This was mainly due to increased utilization, which accounted for 10.2% of the specialty trend, with the unit cost driver increasing by 3.8% (Figure 2 on Page 2).
Specialty trend growth is forecasted to decrease over the next three years, with projections of 6.9%, 4.9% and 3.3% trend for 2024, 2025 and 2026, respectively (Figure 8). The reduction in specialty trend is driven by continued decline in the autoimmune – anti-inflammatory condition. This condition had a trend of 21.5% in 2023, which is expected to decrease over the next three years due to Humira® biosimilars entering the market (Figure 9). In 2025, we’re also expecting the release of a biosimilar for Stelara®, which will help reduce specialty trend further.
However, we expect continued growth of other autoimmune – anti-inflammatory products such as Rinvoq®, Skyrizi® and Tremfya® (Figure 10). These drugs, along with Talz® and Orencia Clickjet®, saw utilization impact greater than 75% of the autoimmune anti-inflammatory trend (with cost increases driving the other 25%).
Multiple sclerosis continues to decrease in spend on the pharmacy benefit, most likely due to utilization shifts on the medical benefit (Figure 9).
In 2023, we saw significant growth in the atopic dermatitis condition, which was primarily driven by Dupixent® (Figure 9). Dupixent® had a trend of 40% in 2023 and is forecasted to continue growth with trend in the upper teens, driving the overall atopic dermatitis trend (Figure 10).*
In addition to the growth with select atopic dermatitis and autoimmune – anti-inflammatory products, we expect Trikafta® to have double-digit trend over the next three years (Figure 10).
Specialty trend growth is predicted to slow to single digits over the next three years, primarily due to a declining autoimmune – anti-inflammatory trend.
* Dupixent is also used for asthma and COPD indications. We assigned all uses of Dupixent ® to atopic dermatitis, as that is the drug’s first and main indication.
FIGURE 9: KEY SPECIALTY CONDITIONS TREND FORECAST (2024–26) Atopic dermatitis Autoimmune – anti-inflammatory HIV/AIDS Oncology Multiple sclerosis
10: KEY SPECIALTY PRODUCTS TREND FORECAST (2024–26)
FIGURE
PIPELINE FORECAST
We closely monitor the evolving drug pipeline landscape, including key investigational pharmacy drugs and select new-to-market brand-name drugs. Notably, in Q1 2024, the FDA approved oral resmetirom (Rezdiffra®), the first treatment for non-alcoholic steatohepatitis (NASH), the most severe form of a common chronic liver disease. In that quarter, the FDA also approved subcutaneous sotatercept (Winrevair ®), the first activin signaling inhibitor that targets underlying pulmonary arterial hypertension (PAH).
In Q2 2024, the FDA approved danicopan (Voydeya®) as the first complement factor D inhibitor oral formulation for extravascular hemolysis in the rare blood disorder paroxysmal nocturnal hemoglobinuria (PNH) to be used as an add-on therapy to ravulizumab or eculizumab.
An FDA decision for injectable crovalimab for PNH is anticipated in late July 2024. In September 2024, an FDA decision for oral xanomeline-trospium is expected. This is the first potential new target in several decades to treat schizophrenia, a serious mental illness that affects 1% of the population.
Lebrikizumab, a monoclonal antibody used to treat atopic dermatitis (eczema), received the FDA’s complete response letter in October 2023 due to manufacturing issues. However, the manufacturer anticipates regulatory action in the second half of 2024.2 Two oral agents for rare diseases in phase 3 trials relacorilant for Cushing syndrome and aficamten for hypertrophic cardiomyopathy are not expected until 2025 and forecasted to contribute $0.12 and $0.10 PMPM in 2026, respectively (Figure 11).
2 Eli Lilly and Company. (2024, April 30.) Lilly Reports First-Quarter 2024 Financial Results and Raises Full-Year Revenue Guidance by $2 Billion, Highlights Pipeline
https://investor.lilly.com/news-releases/news-release-details/lilly-reports-first-quarter-2024-financial-results-and-raises
FIGURE 11: KEY PHARMACY PIPELINE PRODUCTS FORECAST
METHODOLOGY AND DISCLAIMER
• All forecasts are based on the methodology Prime/Magellan Rx uses to project trend impact for years 2024, 2025 and 2026. All forecasts are based on available market and product information as of June 28, 2024. 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 Prime/Magellan Rx specialty definition.
• Pipeline drugs are defined as any new-tomarket brand products approved or expected to be approved during the forecast period (2024–26).
• Overall drug trend and forecast is based on plan paid per member per month (PMPM) change year over year after rebates and network discounts.
• Traditional and 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. 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).
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