Medicaid Pharmacy Trend Report 2021 by Prime/Magellan Rx

2021 SIXTH EDITION

TABLE OF CONTENTS

EDITORIAL STAFF

Introduction

Medicaid Fee-forService Trends

Pipeline and Forecasting

Stephanie Stevens, MPH Director, Research and Publications Christine Szurek Marketing Manager

CONTRIBUTORS

Key Trends and Insights

Medicaid Pharmacy Economics

Class and Drug Trends

Methodology

Meredith Delk, Ph.D., MSW Senior Vice President, General Manager, Government Markets Nicole Quackenbush, Pharm.D. Vice President, Government PDL Markets

Key Therapeutic Classes by Net Dollar Impact

Glossary

Karim Prasla, Pharm.D., MS, BCPS Vice President, Clinical Outcomes, Advanced Analytics, and Research Katie Lockhart, MS Manager, Forecasting and Pharmacoeconomics

Kristen Haloski, Pharm.D., AAHIVP Senior Director, Government PDL Markets Kristin Haas Senior Data and Reporting Analyst Doug Brown, R.Ph., MBA Senior Vice President, Value and Access Coeus Consulting Group

Eileen Zimmer, Pharm.D., MBA Senior Director, Government PDL Markets

© 2021 Magellan Rx Management. Magellan Rx Management Medicaid Pharmacy Trend Report™ 2021 is published in conjunction with D Custom. All rights reserved. All trademarks are the property of their respective owners. The content — including text, graphics, images, and information obtained from third parties, licensors, and other material (“content”) — is for informational purposes only. The content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Figures may be reprinted with the following citation: Magellan Rx Management Medicaid Pharmacy Trend Report™ 2021, © 2021. Used with permission.

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

INTRODUCTION Magellan Rx Management is pleased to present the sixth edition of the Magellan Rx Management Medicaid Pharmacy Trend Report, the industry’s only detailed source that looks at both the gross and net drug spend trends across Medicaid. The year 2020 was unlike any other. Dealing with a worldwide pandemic disrupted lives and the way we think about healthcare. In response to the pandemic, states considered alternative pathways to continuity of care for patients such as telehealth, virtual pharmacy and therapeutics (P&T) committee meetings, and other technology-based solutions.

The story of the Medicaid FFS top drug classes remained almost identical to that of previous years. The top two drug classes remained HIV/AIDS and antipsychotics, which together accounted for more than 19.8% of the total net drug spend; the top five classes accounted for almost 40% of total net spend (see figure 2).

Meanwhile, advances in healthcare moved forward. An unprecedented number of drug approvals and new drugs expanded the market. Specialty drugs such as Mavyret, a pangenotypic therapy for hepatitis C, and Trikafta, a combination therapy for cystic fibrosis, made their mark, representing the highest net dollar impact in their categories. These and other introductions led to a modest increase in specialty cost trend and a positive trend in traditional for the first time in this report’s history (see figure 1).

Adjustments for the pandemic aside, states continued to explore unique payment models,

In another milestone, 2020 specialty net cost crossed a threshold predicted since this publication’s first report: Specialty drugs accounted for more than half (51.4%) of the net drug spend in Medicaid fee-for-service (FFS), while still making up only 1.3% of all utilization — a trend we see across all lines of business but most significantly in Medicaid.

FIGURE 1: MEDICAID 5-YEAR NET COST PER CLAIM TREND 2016-2020 Traditional

Specialty

including subscription and outcomes-based contracting models to counterbalance the increasing cost of specialty drugs. These are imperative tools in the shift from volume-based cost savings toward value-based cost savings. All of these updates made for a dynamic year in Medicaid, which we examine in this report. Thank you for your continued interest in the Medicaid Pharmacy Trend Report. We are confident the information in this report will drive meaningful conversations and strategic opportunities to manage Medicaid pharmacy programs in the coming years.

FIGURE 2: TOP 5 CLASSES BY NET SPEND 2020

Overall Trend

HIV/AIDS

Antipsychotics

Hemophilia Treatment

Anticonvulsants

Cystic Fibrosis, Oral

Other

10.7% 9.1% 0

6.7% 6.5%

20.5 1.9% -5.1%

4.6 -4.4% -9.7%

6.1 0.8% -2.6%

8.6 4.3% -0.4%

10.9 8.9% 1.7%

2016

2017

2018

2019

2020

61.4%

5.6%

2021 / MAGELLANRX.COM/TRENDREPORT

KEY TRENDS AND INSIGHTS Overall Trends

Traditional vs. Specialty Impact

FIGURE 3: 2020 TREND IN NET SPEND

Specialty net cost surpassed traditional net cost, as predicted for the past few years. Even so, claim volume remains nominal at 1.3%.

8.9%

FIGURE 6: TOTAL NET COST

FIGURE 5: CLAIM VOLUME

Overall Trend

Traditional

1.7%

10.9%

Traditional Trend

Specialty Trend

Specialty

Traditional

1.3%

Specialty

1.3% 47.9%

0.44

0.6%

204.26

Utilization Trend

Cost Trend

6.1%

Utilization Trend

Cost Trend

FIGURE 4: OVERALL COST TRENDS 2019-2020 2019

2020

2019

2020

98.7%

2019

8.5%

2020

% Change

2019

2020

131.01 73.82

% Change

8.1%

120.80

48.6%

FIGURE 8: SPECIALTY COST TREND

5.0%

2020

52.1%

FIGURE 7: TRADITIONAL COST TREND

% Change

51.4%

4,141.48

77.49

3,831.36

10.9% 8.9%

49.09

1.7%

1,881.05

53.46

25.90

Gross Cost per Claim

Net Cost per Claim

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

Gross Cost per Claim

2,085.31

26.34

Net Cost per Claim

Gross Cost per Claim

Net Cost per Claim

MEDICAID PHARMACY ECONOMICS The Medicaid pharmacy pricing landscape has remained largely unchanged over the six years MRx has published this report. The basic tenet of the program is the same: Manufacturers agree to a base, or “federal”, rebate in exchange for mandatory pharmacy coverage for their products by states that provide the Medicaid pharmacy benefit. All states and the District of Columbia currently offer this benefit to Medicaid recipients. Hence, manufacturers gain “payable” status everywhere through this agreement with the Centers for Medicare & Medicaid Services (CMS). Medicaid rules also permit additional, or “supplemental,” rebates to be contracted by individual states or a group of states to further reduce the net cost of pharmaceuticals. These rebate contracts are protected by Medicaid’s best price exemption, which means they do not impact the manufacturer’s Medicaid best price. The pharmacy benefit is included in the Federal Medical Assistance Percentage (FMAP), so states share supplemental rebates as they do federal rebates with the federal government. The other rebate factor in the equation, the rebate offset amount, continues to go entirely to the federal government and constitutes a small portion, roughly 2.5%, of the federal rebate. In 2020, the average total discount was 59.2% (54.2% federal and 5% supplemental).

Key Points in Medicaid Economics » L owest net cost is calculated net of federal, supplemental, and rebate offset amount. » D o not chase supplemental rebates at the expense of lowest net cost. » B rand drugs can be less expensive than their generic equivalents and can save states millions of dollars.

FIGURE 9: MEDICAID PHARMACY ECONOMICS

Brand Drug Price

$100.00

$50.00

Generic Drug Price

State Net Drug Cost

Supplemental Rebate

State Net Drug Cost

$23.10

Brand Federal Rebate

(Greater of 23.1% AMP or AMP Best Price + CPI-U Penalty)

New Drug Introduction

Time

Generic Federal Rebate

(13% AMP + CPI-U Penalty)

Patent Expiration/ Generic Introduction

The Economics To understand Medicaid economics at the drug level, assume pharmacy reimbursement, wholesale acquisition cost (WAC), and average manufacturer price (AMP) are all the same. In this instance, a new brand drug enters the market with a minimum mandatory rebate of 23.1% of AMP. This drug enters a competitive class with three clinically equivalent therapeutic alternatives, each with higher discounts and lower net costs than the new drug. With a pharmacy reimbursement cost of $100, the net cost to the state is $76.90 ($100 minus 23.1%, or $23.10). To be competitive, the manufacturer will offer an additional discount, known in Medicaid as a “supplemental rebate,” to lower the net cost from $76.90 to a competitive

price of $50. The value of the supplemental rebate at time zero is equal to $26.90, and the total discount is 50%, or $50. As time progresses, manufacturer pricing actions drive up the total discounts. Still, due to the inverse relationship between supplemental and federal rebates, supplemental discounts decline over time as the total federal discount increases (see figure 9). As the patent expiration approaches, the manufacturer generally increases the cost of the drug. The Consumer Price Index for Urban Consumers (CPI-U) penalty accelerates the growth of the federal rebate in the quarters prior to that event.

2021 / MAGELLANRX.COM/TRENDREPORT

FIGURE 10: EXAMPLE OPPORTUNITY COSTS PREFERRING BRANDS OVER GENERICS 1 Brand

Generic Generic becomes cost-effective over brand

50K 150K

$ $

50K 130K

50K 115K

50K 100K

$ $

50K 85K

50K 45K

Brand Two-Year Cost: $400K

50K 35K

50K 25K

2019

Generic Two-Year Cost: $685K

2020

Two-Year Net Spend:2 $355K

1 Model illustrates 1,000 claims per quarter paid at generic and brand. 2 Lower of brand or generic

Generic Impact At patent expiration, the launch of a generic is widely seen as a way to lower drug costs and save patients money. While this is true in many markets, in Medicaid, the launch of a generic requires careful thought and financial evaluation. When generics first enter the market, they typically launch at a discounted price point relative to the brand’s full price but have a federal rebate at 13% of AMP. The net cost of a brand drug can be significantly less than the generic at this time (see figure 10). Factors affecting the availability of this new generic can cause the net cost of

to classify brand and generic drugs by their CMS drug class indicator instead of by their formal label name. These indicators are single-source; innovator, multiple-source; or non-innovator, multiple-source. The impact to FFS is significant because authorized generics (AGs) that have a non-innovator, multiplesource (generic) label name pay an innovator, multiple-source (brand) federal rebate and are counted as brand drugs by CMS. Over the two-year period 2019-2020, states averaged an 86% effective generic dispensing rate (GDR) (see figure 11) when the drug did not have a proprietary drug name and where AGs count as generic even though they pay a brandlike CMS rebate. In 2020, states included in this report saved $378.6 million or $65.53 per claim using a brand over generic strategy.

the generic to remain relatively high for periods lasting from six months to multiple years.

Generic Utilization Rate

FIGURE 11: GENERIC UTILIZATION RATE 2019-2020

Medicaid FFS programs most often reported lower generic utilization rates than Medicaid managed care organizations (MCO) or other commercial programs because of the federal rebate’s impact on the net cost of brand drugs compared to their generic equivalents. CMS calculation of generic efficiency requires states

Medicaid Forecasting

2019 85.6%

FIGURE 12: MEDICAID FORECASTING

MRx Predict is Magellan Rx’s advanced analytics platform that

MRx Predict shows that the overall gross trend is expected to increase

unlocks proactive insights to help improve clinical and economic

steadily until 2023, which will see a 1.5% decrease. Gross and net trend

outcomes. MRx Predict proactively identifies patients at risk of

both see their largest predicted increase from 2019 to 2020. Unlike gross

experiencing adverse events and forecasts future drug-cost drivers

trend, net trend will increase through 2023, when it will taper to 0.6% (see

for customers. Two different models are available: Drug Cost Forecast

figure 12). Rebates will continue to help offset increasing drug prices, but

provides macro predictions on drug spend and trends and the factors

the high cost of new specialty drugs will continue to impact the net trend.

Gross/Rx

identifies and stratifies individual patients based on the probability of being nonadherent to chronic medications to improve patient outcomes. Medicaid forecasting data can be found on page 13.

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

Net Net/Rx

131.01

138.74

-1.5%

4.5%

5.9%

8.5%

3.7%

144.98

142.81

120.80

driving those future trends. At-Risk Patient Identification proactively

2020 86.3%

49.09 2019

53.46

2020

56.99

2021

0.6%

4.6%

6.6%

8.9%

4.3%

59.61

2022

59.99

2023

MEDICAID FEE-FOR-SERVICE TRENDS Federal Rebate Update

Overall Drug Cost Trends

Following a several-year increasing trend, the aggregate federal rebate percentage inclusive of the rebate offset amount (ROA) decreased 0.4% in 2020, from 54.6% in 2019 to 54.2%. This decline, driven by new specialty drugs, was offset by a corresponding rise in supplemental rebates — good news for states. On closer inspection, the federal rebate on traditional drugs increased to 64.6%, up nearly two percentage points from 2019. The federal rebate on specialty drugs decreased 2.6%, from 48.4% to 45.8%. Considering that new-to-market drugs start with a federal rebate of 23.1% of AMP, higher utilization of newer products likely pulled down the average specialty federal rebate.

2020 saw an increased gross cost per claim and net cost per claim of 8.5%, or $10.21, and 8.9%, or $4.37, respectively. The first positive traditional trend in five years and a double-digit specialty trend contributed to these significant increases (see figures 14 and 15). FIGURE 14: GROSS COST PER CLAIM 2019-2020 2019

2020

The average federal rebate can subdivide into specialty and traditional drugs or brand and generic drugs (see figure 13). As previously noted, the growth in specialty net spend was the primary driver of lower average federal rebate in 2020.

% Change

10.5% 1.5%

123.91 122.07

10.1%

12.0%

133.04 118.76

134.62 121.81

132.74 120.54

8.5%

131.01 120.80

FIGURE 13: FEDERAL REBATE PERCENTAGE BY SEGMENT

Weighted Average

FIGURE 15: NET COST PER CLAIM 2019-2020 Brand 66.6%

Specialty 48.4%

Federal Rebate* 54.6%

2019

Brand 66.2%

Traditional 62.7%

Specialty 45.8%

Federal Rebate* 54.2%

Generic 11.3%

Generic 9.7%

2019

2020

12.8%

9.1%

13.0%

8.9%

Traditional 64.6% 1.1%

49.52 48.96

54.31 48.04

54.85 50.28

55.36 49.06

53.46 49.09

Q1 *Federal rebate as a percent of pharmacy reimbursement and net of ROA

% Change

Weighted Average

2021 / MAGELLANRX.COM/TRENDREPORT

CLASS AND DRUG TRENDS Therapeutic Class Net Dollar Impact

Drug Net Spend Impact

Cystic fibrosis, oral, and HIV/AIDS had the highest net dollar impact and highest net spend among classes, while stimulants and hemophilia had the largest decreased net dollar impact (see figure 16).

The top drugs by percent of net spend belong to the top five classes by net spend. The specialty benefit had the top three drugs by percent of total net spend. HIV/AIDS accounted for three of the top eight drugs, contributing 6.5% of total spend, equating to $335.6 million. Although hepatitis C is still contributing to specialty’s decrease in total net spend, Mavyret utilization contributed to the class’s 1.3% of specialty’s total net spend (see figure 18).

Three of the five classes whose net dollar impact decreased — stimulants and related agents, hemophilia, and hepatitis C — also saw decrease in net spend and claim volume. In traditional, impact to net dollar changes was lower than in previous years, contributing to the first positive traditional trend in five years (see figure 17).

FIGURE 16: 2020 TOP 5 CLASSES WITH INCREASING TOTAL NET SPEND BY DOLLAR IMPACT Traditional

On the traditional benefit, antipsychotic agents accounted for five of the top eight drugs, contributing 5.3% of total net spend, or $273.6 million (see figure 19).

FIGURE 18: 2020 TOP 10 SPECIALTY DRUGS BY PERCENT OF TOTAL NET SPEND

Specialty

1.20

4.1% 0.67

0.64

3.8%

0.56

0.42

1.6%

Cystic Fibrosis, Oral

HIV/AIDS

Antipsychotics

Cytokine and CAM Antagonists

Anticonvulsants

FIGURE 17: 2020 TOP 5 CLASSES WITH DECREASING TOTAL NET SPEND BY DOLLAR IMPACT Traditional Stimulants and Related Agents

Biktarvy (oral)

Trikafta (oral)

Hemlibra (SQ)

1.4%

1.3%

Genvoya (oral)

Mavyret (oral)

0.98%

0.95%

0.87%

Triumeq (oral)

Eloctate (IV)

Stelara Syringe (INJ)

FIGURE 19: 2020 TOP 10 TRADITIONAL DRUGS BY PERCENT OF TOTAL NET SPEND

Specialty Hemophilia Treatment

Hepatitis C Agents

Glucocorticoids (Inhaled)

Antivirals, Oral

-0.12

-0.37

-0.32

-0.24

1.6%

1.4%

1.3%

1.0%

0.8%

Rexulti (oral)

Abilify Maintena (IM)

0.7%

-0.68

Invega Sustenna (IM)

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

Vraylar (oral)

Epidiolex (oral)

Suboxone Film (SL)

Dupixent Syringe (SQ)

Latuda (oral)

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Cystic Fibrosis, Oral

HIV/AIDS Net Dollar Impact $1.20

$116.8M Net Spend Trend

68.7%

64.6%

Total Net Spend Trend

2.5%

Claim Volume Trend

Net Cost Per Claim Trend

Net Dollar Impact $0.67

$68.0M

14.1%

Net Spend Trend

0.1%

Total Net Spend Trend

14.0%

Claim Volume Trend

Net Cost Per Claim Trend

Class Summary

Cystic fibrosis, oral, a specialty class, was the No. 5 net spend category in 2020, with a positive net dollar impact on total net spend. New combination therapy Trikafta made a huge splash in the category, with the highest net dollar impact of all agents. Combining the tablet and packet formulations, Kalydeco had the second-highest market share in the class but a negative net dollar impact.

HIV antiretrovirals, a specialty class, remained the No. 1 net spend class in 2020 and was also the No. 1 positive trend driver. The top six drugs in the class made up close to one-third of market share, led by Biktarvy. After three years on the market, Biktarvy is not only the No. 1 net spend product in Medicaid but has also gained a quarter of the class’s market share.

FIGURE 20: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 24: MARKET SHARE AND NET DOLLAR IMPACT Trikafta (oral) Orkambi packet (oral) Orkambi tablet (oral) Symdeko (oral)

Kalydeco packet (oral)

Market Share

Biktarvy (oral) Genvoya (oral)

Kalydeco tablet (oral)

Descovy (oral) Other

Net Dollar Impact Change

Market Share

7.5%

Triumeq (oral)

Truvada (oral)

Net Dollar Impact Change

16.4%

10.5%

25.5%

4.4% 13.7%

Tivicay (oral)

9.5

66.9%

1.87

10.0%

9.5%

8.2%

9.2%

7.7%

7.3%

29.8%

10.9% 0.03 $0.01 0

$0.79

5.2% 9.4%

7.6% 34.1%

6.2

2.9

-0.29

-0.06

$0.12 37.3%

33.9%

8.0% 8.4% 2019

2020

$-0.06

$0.01 0

-0.02

$-0.07 -0.36

2020

$-0.10 2019

2020

2021 / MAGELLANRX.COM/TRENDREPORT

Antipsychotics

Cytokine and CAM Antagonists Net Dollar Impact $0.64

$64.3M

15.9%

Net Spend Trend

6.4%

Total Net Spend Trend

8.9%

Claim Volume Trend

Net Cost Per Claim Trend

Net Dollar Impact $0.56

$54.7M

57.7%

Net Spend Trend

21.4%

Total Net Spend Trend

29.8%

Claim Volume Trend

Net Cost Per Claim Trend

Class Summary

Antipsychotics, a traditional class, was the No. 2 net spend category in 2020, with a positive net dollar impact on total net spend. Quetiapine (Seroquel) had the highest market share in the class, while Vraylar, not included due to low market share, had the highest dollar net impact on the class.

Cytokine and cell adhesion molecule (CAM) antagonists, a specialty class, was the No. 7 net spend category in 2020, with a positive net dollar impact on total net spend. Humira injector remained the agent with the highest market share but lost some market share to Cosentyx injector.

FIGURE 21: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 26: MARKET SHARE AND NET DOLLAR IMPACT

Quetiapine tablet (oral) Risperidone tablet (oral)

Olanzapine tablet (oral) Latuda (oral) Aripiprazole tablet (oral) Other

Market Share

23.7%

Haloperidol (oral)

Stelara syringe (INJ) Humira pen kit (INJ)

Net Dollar Impact Change

9.3%

5.4%

5.4% 3.0%

5.0% 4.3%

3.1%

15.2%

14.3%

17.3%

17.8%

26.2%

26.3%

2019

2020

Otezla (oral)

Market Share

23.8%

9.2%

Cosentyx pen injector (SQ) Other

3.3%

Enbrel pen (INJ)

Humira kit (INJ)

Net Dollar Impact Change 6.1% 4.5%

11.4%

9.6%

8.5%

8.0%

41.7%

40.9%

3.9%

0.28

$0.61

0.22

0.01 0.01 0.01 0.01 $0.00 $-0.01 $

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

$ $ $

2020

25.8%

27.0%

2019

2020

0.09

-0.03

2020

$0.02 0 $-0.01 $-0.01

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Anticonvulsants

Opiate-Dependence Treatment Net Dollar Impact $0.42

$42.4M

14.3%

Net Spend Trend

11.1%

2.9%

Total Net Spend Trend

Net Cost Per Claim Trend

Claim Volume Trend

Net Dollar Impact $0.23

$22.7M

21.0%

Net Spend Trend

13.4%

Total Net Spend Trend

6.7%

Claim Volume Trend

Net Cost Per Claim Trend

Class Summary

Anticonvulsants, a traditional class, was the No. 4 net spend category in 2020, with a positive net dollar impact on total net spend. Although new agent Epidiolex had less than 1% market share, it contributed to the positive net spend, accounting for 1.4% of total net spend, and was the No. 5 drug by net spend across traditional and specialty categories.

Opiate-dependence treatment, a traditional class, was the No. 8 net spend category in 2020, with a positive net dollar impact on total net spend. The majority of market share belongs to Suboxone film, which makes up 49.8% of the total net spend for the category.

FIGURE 23: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 27: MARKET SHARE AND NET DOLLAR IMPACT

Lamotrigine tablet (oral) Topiramate tablet (oral)

Levetiracetam tablet (oral) Divalproex tablet (oral) Divalproex ER (oral) Other

Clonazepam (oral)

Suboxone film (SL) Buprenorphine HCL (SL) Naltrexone (oral) Buprenorphine/naloxone tab (SL) Narcan spray (nasal) Other

Net Dollar Impact Change

Market Share

14.6%

15.2%

8.8%

7.0%

15.8%

15.7%

11.4%

11.3%

6.1%

5.9%

Market Share

67.2%

36.3

66.0% 0.21

0.39

36.1

6.6%

6.7%

5.8%

6.1%

5.7

4.9% 4.7% 4.5%

81.0%

2020

Net Dollar Impact Change

0.01 0.01 0.01 $0.00 $ $ $

2019

Zubsolv (SL)

2020

4.3%

2.9%

7.5%

7.1%

2019

2020

0.01 0.01 0.01 $0.01 $0.01 $

-0.03

2020

2021 / MAGELLANRX.COM/TRENDREPORT

Oncology, Oral: Hematology

Hepatitis C Agents Net Dollar Impact $0.12

$12.1M

16.8%

Net Spend Trend

5.3%

Total Net Spend Trend

10.9%

Claim Volume Trend

Net Cost Per Claim Trend

Net Dollar Impact $-0.32

$-29.5M

-23.2%

Net Spend Trend

-18.2%

Total Net Spend Trend

-6.1%

Claim Volume Trend

Net Cost Per Claim Trend

Class Summary

Oncology, oral: hematology, a specialty class, was the No. 10 net spend category in 2020, with a positive net dollar impact on total net spend. Market share in this class was closely spread, but Revlimid had the highest market share and accounted for 20% of class spend.

Hepatitis C agents, a specialty class, was the No. 9 net spend category in 2020, with a positive net dollar impact on total net spend. As seen in total net spend for Medicaid, Mavyret was the top agent by utilization in the class but had a negative dollar impact on the category.

FIGURE 29: SPEND AND UTILIZATION TRENDS

FIGURE 28: SPEND AND UTILIZATION TRENDS

Imbruvica tablet (oral) Revlimid (oral) Imatinib (oral) Sprycel (oral) Other

Hydroxyurea (oral)

Market Share 7.3%

3.0%

Mercaptopurine (oral)

Sofosbuvir/velpatasvir (AG) (oral) Ribavirin tablet (oral) Epclusa (oral) Mavyret (oral) Other

Net Dollar Impact Change

8.2%

Market Share 3.7%

3.7%

5.4%

1.6% 1.8%

0.05

0.03

10.2%

-0.02 $-0.02 $

1.3% 1.7% 1.9%

-0.06

26.6%

31.6%

40.8%

Harvoni tablet (oral)

Net Dollar Impact Change

41.3%

Vosevi (oral)

-0.07

19.0%

16.2%

4.4% 5.6%

6.5%

19.4%

18.9%

0.04

0.02

2.4%

0.00

-0.18

5.7%

2019

56.2%

53.5%

2020

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

2019

2.1% 2020

2020

0.00

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Hemophilia

Stimulants and Related Agents

Net Dollar Impact $-0.37

$-33.4M

Net Dollar Impact $-0.68

-8.9%

Net Spend Trend

-2.1%

Total Net Spend Trend

-6.9%

Claim Volume Trend

Net Cost Per Claim Trend

$-64.1M

-27.5%

Net Spend Trend

-0.8%

Total Net Spend Trend

-26.9%

Claim Volume Trend

Net Cost Per Claim Trend

Class Summary

Hemophilia, a specialty class, was the No. 3 net spend category in 2020, with a negative net dollar impact on total net spend. The majority of agents in the class had a net negative dollar impact, though Hemlibra and Alprolix had a positive dollar impact. Hemlibra had more than a quarter of the utilization in the class, increasing almost 10 percentage points from 2019.

Stimulants and related agents, a traditional class, was the No. 6 net spend category in 2020, with a negative net dollar impact on total net spend. Vyvanse capsule had a negative net dollar impact but accounted for the highest market share in the class.

FIGURE 22: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 25: MARKET SHARE AND NET DOLLAR IMPACT

Hemlibra (SQ) Alprolix (IV) Eloctate (IV) Other

Idelvion (IV)

Advate (IV)

Market Share

Adynovate (IV)

Focalin XR (oral) Amphetamine salt combo (oral) Concerta (oral) Adderall XR (oral) Other

Net Dollar Impact Change

Market Share 7.2%

6.8%

27.4%

0.35

15.1%

10.5%

10.9%

19.0%

18.6%

-0.13

0.03

5.2

5.5%

6.8%

13.0

-0.02

-0.12

$ %

5.1%

-0.21

-0.12

5.6%

5.9%

10.8

9.3%

-0.34

32.9%

33.4%

2020

2019

2020

11.0

32.8%

2019

14.0%

0.01 0.00

$ $

16.0%

37.4%

-0.08

13.8%

Vyvanse capsule (oral)

Net Dollar Impact Change

16.6% 4.4% 5.0%

Guanfacine ER (oral)

-0.15

-0.27

2020

2021 / MAGELLANRX.COM/TRENDREPORT

PIPELINE AND FORECASTING Pharmacy Pipeline

Key Conditions Forecast

Figure 30 identifies notable agents that are further from approval. These are products with the potential for significant clinical and financial impact. Their development status is being tracked on the MRx Pipeline radar. These pipeline products, their respective class or proposed indication, as well as an estimated financial forecast for the year 2025, are displayed. The financials are projected total annual U.S. sales, reported in millions.

With a steady increase in the pipeline, most key conditions will see annual increases in trend over the next three years. Conditions with generic introductions or specialized management strategies, such as hepatitis C (see figure 31), will see decreases in trend.

For more detailed information on the pipeline, please see the latest MRx Pipeline Report on our website.2

FIGURE 31: KEY CONDITIONS FORECAST 2020

2021

2022

2023

FIGURE 30: KEEP ON YOUR RADAR 69%

voclosporin

aducanumab

$649

$940

Immunology

Neurology

remdesivir COVID-19

betibeglogene autotemcel (Zynteglo)

Hematology/Gene Therapy

$1,190

$366

relugolix

1% 3

casimersen

Women’s Health/ Oncology

Neurology/Gene Therapy

$187

$578

16%

14%

10%

14%

-9%

10%

Antipsychotics

3% 3%

HIV/AIDS

Hemophilia

Anticonvulsants

% 2% 4

Cystic Fibrosis

efgartigimod

mRNA-1273 vaccine COVID-19

Immunosuppressants

$2,859

$727 58%

lonapegsomatropin

elivaldogene tavalentivec (Lenti-D)

Endocrine

$589

Neurology/Gene Therapy

$42

lenadogene nolparvovec (GS010) Ophthalmology/ Gene Therapy

$39

-4%

18%

inclisiran

Cardiovascular

ipatasertib

$693

Oncology

$510

For more detailed information on the pipeline, please see the latest MRx Pipeline Report on our website.3

drug names appear in  Specialty magenta throughout the publication.

3 MRx Pipeline Report. https://issuu.com/magellanrx/docs/mrx_pipeline_jul_0721?fr=sZDMzZTQwMjcxMzQ accessed September 2021.

14%

21%

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021

5% -27% -37 Stimulants and Related Agents

-5% -3

4% 5%

13%

17% 10%10%

-4%

-23%

Cytokine CAM Antagonists

OpioidDependence Treatment

Hepatitis C

Oncology, Oral: Hematology

METHODOLOGY The Magellan Rx Medicaid Pharmacy Trend Report focuses exclusively on Medicaid FFS drug spend and does not include managed care utilization. It provides a comprehensive year-over-year analysis of Medicaid FFS pharmacy claims data on a cost per claim basis.

» T he report trends are based on gross cost and net cost per claim basis and compare the 2019 calendar year data to the 2020 calendar year data. » T he data set used in this evaluation contains more than 97 million claims, with a gross cost of $12.7 billion and a net cost of $5.2 billion. » T wo years of complete FFS data was obtained from 25 Medicaid FFS clients across the country. Claims data used in this report is publicly available on the CMS website: https://www.medicaid.gov/medicaid/prescription-drugs/state-drug-utilization-data/ index.html.

» L ike commercial plans, traditional and specialty drug trends are not immune to manufacturer price actions at the gross cost level. However, the increase at the net cost level is somewhat mitigated by supplemental rebates (where applicable) and the CPI-U penalty component of the federal rebate. » T his report incorporates the CMS federal rebate data for both 2019 and 2020 to achieve the highest accuracy for the Medicaid FFS space. Federal rebate data at the drug level is confidential and protected by federal law under the Social Security Act at 42 U.S.C. 1396r-8 (b)(3)(d). Therefore, this report does not disclose net cost pricing information on a per-drug basis.

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For a downloadable version (PDF) of this report or any of our other trend reports, please visit magellanrx.com.

MRx customer data used in analysis

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2021 / MAGELLANRX.COM/TRENDREPORT

GLOSSARY AG..................................................................................................................................................... authorized generic

HIV/AIDS................ human immunodeficiency virus/acquired immunodeficiency syndrome

AMP............................................................................................................................. average manufacturer price

INH....................................................................................................................................................inhaled/inhalation

ASP...................................................................................................................................................average sales price

INJ............................................................................................................................................................................injection

AWP.....................................................................................................................................average wholesale price

IV....................................................................................................................................................................... intravenous

CAM........................................................................................................................................cell adhesion molecule

MCO.............................................................................................................................. managed care organization

CMS.............................................................................................Centers for Medicare & Medicaid Services

P&T...............................................................................................................................pharmacy and therapeutics

COVID-19.................................................................severe acute respiratory syndrome coronavirus 2

PDL................................................................................................................................................... Preferred Drug List

CPI-U................................................................................Consumer Price Index for All Urban Consumers

ROA............................................................................................................................................. rebate offset amount

DUR.........................................................................................................................................drug utilization review

SL..........................................................................................................................................................................sublingual

ER..........................................................................................................................................................extended release

SQ................................................................................................................................................................ subcutaneous

FFS............................................................................................................................................................. fee-for-service

WAC................................................................................................................................wholesale acquisition cost

FMAP...................................................................................................federal medical assistance percentage

XR.........................................................................................................................................................extended release

GDR.......................................................................................................................................generic dispensing rate

MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2021