OUR MEDIC A L PH AR M AC Y TR END R EPORT IS ON E OF A K I N D.
This industry-leading report is the only detailed source analyzing:
MEDICAL BENEFIT CLAIMS TRENDS
DATA BENCHMARKS
MEDICAL BENEFIT DRUG MANAGEMENT STRATEGIES
Our Medical Pharmacy experts are dedicated to keeping you informed so you can make better healthcare decisions. Dive deeper into the trends, forecasts, and insights in this year’s report.
LAURA WALTERS, R.PH. Director, Specialty Clinical Solutions
SEAN SHIRK, PHARM.D., BCGP Director, Specialty Clinical Solutions
MIRANDA LAW, PHARM.D. Clinical Pharmacist
KATIE LOCKHART, MS
Senior Manager, Forecasting and Pharmacoeconomics
DANNY MELSON
Senior Analyst, Forecasting and Pharmacoeconomics
CARLY RODRIGUEZ, PHARM.D., FAMCP Vice President and Chief Pharmacy Officer Moda Health
EXECUTIVE SUMMARY
Medical pharmacy trends have continued to evolve since the 2020 global pandemic, resulting in dynamic changes in therapies and healthcare. Growing costs for new market entrants and new indications for targeted cancer drugs in oncology impacted trends. The influence of biosimilar products was demonstrated by their increased utilization.
Commercial benefit’s spend returned to a double-digit trend (Fig. 2) that was driven by increases in utilization and the percentage of claims from the outpatient hospital setting, which is typically reimbursed at higher rates. Utilization increases occurred across nearly all therapies, including low-cost drugs such as antiemetics and corticosteroids, and high-cost therapies like oncology, autoimmune, and multiple sclerosis drugs (Fig. 6).
Medicare benefit’s spend trend story was starkly different than the commercial trend. There was lower total utilization in 2022 (Fig. 5), which was offset by changes in drug mix in oncology and hematology that drove up average cost per claim (Fig. 4). While overall outpatient hospital claim volume declined, oncology was the exception with a 2.2% use increase in this setting.
The negative overall total trend for Medicaid can be attributed to lower use of high-cost rare disease, oncology, and infliximab products that accounted for approximately 33% of spend in the previous year. Negative utilization trend in 2022 was due to lower use of high-frequency, low-cost products that accounted for ~58% of total utilization (Fig. 6). Outpatient hospital as a percentage of claim volume declined across most major categories in 2022, particularly for oncology and oncology support, which decreased ~2.5-3.5%.
Therapy categories driving forecast trends in 2024-25 (Fig. 2) include oncology, rare disease, hematology, Alzheimer’s pipeline (Medicare), and gene therapies (primarily Medicaid).
EXECUTIVE SUMMARY
2022 Drug Mix Change
Claims volume for commercial increased 13% in 2022, (Fig. 5) while allowed cost per claim only increased 0.4% (Fig. 4). This dynamic reflects an increase in utilization of lower cost and more frequently administered medications (Fig. 6) — for example, drivers of injectable steroid utilization growth increased by 22%.
Medicare and Medicaid experienced the inverse of the commercial claim volume trend. Claim volume for both government lines of business (LOBs) dropped — Medicare -1.9% and Medicaid -6.5% (Fig. 5) — yet cost per claim rose 6.5% and 5.3%, respectively (Fig. 4). In both instances, these numbers reflect an increased adoption of higher cost and less frequently administered drugs (Fig. 6). For example, Medicare experienced Darzalex Faspro 47.3% and Opdivo 18.5% spend PMPM
while
had Enhertu
and
2023 METHODOLOGY AND DEMOGRAPHICS
The 2023 edition of the Magellan Rx Medical Pharmacy Trend Report was developed utilizing medical pharmacy industry standard methodologies, calculations, guidance from medical drug management experts, and feedback from previous trend reports. Results were based on a non-continuous population over the five years analyzed.
This report includes a combination of primary and secondary research methodologies to deliver a comprehensive view of payer perceptions and health plan actions related to provider-administered infused or injected drugs paid under the medical benefit, also referred to as medical benefit drugs. These medical benefit drugs are commonly used to treat diseases such as cancer, autoimmune disorders, and immunodeficiencies.
Health Plan Claims Data
Medical benefit drug utilization and trend data were collected through secondary analyses of commercial, Medicaid, and Medicare Advantage health plan medical paid claims data for the most recent calendar years. Claims data was analyzed for medical pharmacy utilization across 1,063 healthcare common procedure coding system (HCPCS) and several outpatient sites of service.* Most analyses compared calendar years 2021 and 2022. In some cases, the past five years were analyzed to show a longer period of year-over-year spend and trend. All data includes allowed amount costs directly from health plans for medical drugs only. Administration codes were analyzed separately and discussed on Pg. 12 and in the appendix, Pgs. 49 and 50
*Vaccines and radiopharmaceuticals were excluded. Drugs administered in the hospital inpatient setting are not included in any analyses.
Payer Survey
RESPONDENT SAMPLE Figure 8
29
PAYERS (22 WITH MEDICARE LIVES)
81%
PHARMACY DIRECTORS
RESPONDENT PLAN SIZE Figure 9
55.7M
MEDICAL PHARMACY LIVES (NATIONAL, REGIONAL, AND LOCAL/STATE)
MEDICAL BENEFIT DRUG EXAMPLES FOR THERAPEUTIC CLASSES Figure 11
MEDICAL PHARMACY TREND DRIVERS
All LOBs experienced substantial utilization growth in high-cost therapies (>$50,000/ utilizer/year). The primary driver of the observed increase can be attributed to a higher number of utilizers. Only commercial observed increased utilization of lower cost drugs on a broad scale, which neutralized the change in aggregate cost per claim. Medicare and Medicaid were different from commercial in that their overall utilization dropped because the use of economical drugs that drive claim volume fell. Conversely, the most expensive drugs experienced increased use. This resulted in a decrease in overall utilization, while cost per claim increased (Fig. 12).
The medical drug space continued to evolve with the entrance of novel therapies. For example, Vyvgart, an a IgG Fcantibody fragment for the treatment of generalized myasthenia gravis, and Vabysmo, a vascular endothelial growth factor (VEGF) inhibitor and angiopoietin-2 (Ang-2) inhibitor indicated for the treatment of individuals with neovascular (wet) age-related macular degeneration and diabetic macular edema, both entered the treatment landscape in 2022. Both agents had the biggest impact on Medicare — Vyvgart +$0.17 PMPM and Vabysmo +$0.15 PMPM — while commercial and Medicaid were nominally impacted. Monitoring spend and trend of these novel new therapies along with strategic planning to account for their impact will be key in the upcoming years.
*https://www.fda.gov/drugs/nda-and-bla-approvals/fast-track-approvals **https://www.accessdata.fda.gov/scripts/opdlisting/oopd/listResult.cfm ***Rank based on PMPM spend includes positive or negative changes 2021-22. See Pgs. 29-34 for drug and category level breakdowns.
COMMERCIAL
Commercial medical benefit drug trends continued to grow with new drug and therapeutic indication approvals by the FDA. After seeing a lower trend in 2021 (+3.1%), the total spend in 2022 increased $5.36 PMPM, or +13.5% (+13.0% utilization, +0.4% cost) (Pg. 5, Fig. 12). The top 10 spend categories accounted for 77% of spend in the last two years (Fig. 15).
Overall cost per claim trend in 2022 was weak due to significant utilization increases of low-cost, high-volume drugs, dampening the aggregate cost per claim (Pg. 3, Fig. 4). Biosimilars continued to mitigate costs in high-spend market baskets in oncology, oncology support, and non-oncology therapeutic categories.
Utilization consistently increased regardless of drug cost and was the primary driver of trend, in particular for oncology products (Fig. 18).
Oncology PMPM trend was +19.5% (Fig. 16), of which utilization contributed +10.5% while cost drove the rest. Specifically, utilization of oncology products that cost >$100k/utilizer/year increased 27% in 2022. Keytruda’s spend increase was heavily driven by increased utilization with greater number of utilizers and claims, +$1.08 PMPM (Pg. 7). Oncology support spend decreased 4.5% (Fig. 16) which was due to utilization of lower-cost antiemetics and biosimilar products (e.g., CSF and ESA). Nononcology utilization trend was +13%, while cost trend decreased by 2%, equating to an +11% trend in the category (Fig. 16).
Claims from the hospital outpatient (HOP) administration setting continue to account for a larger portion of total utilization, increasing +10% since 2018 (Pg. 2, Fig. 3).
Increased reimbursement and HOP administration were offset by decreasing utilization and dramatic drops in ASP rates for the innovator products Remicade and Neulasta (Pg. 38, 39 & 42).
Crohn’s
MEDICAL PHARMACY TRENDS
2021-2022
Due to rounding, totals may not add up accurately.
*Utilizers refers to the number of unique users for each drug and therapy combination.
*Reimbursement refers to changes in the level of provider reimbursement, provider mix, and site-of-service mix (relative to ASP).
*Inflation refers to ASP/AWP price changes on a per unit basis.
*Dosing refers to the number of units administered per claim.
Gammagard Liquid (Immune Globulin)
Tysabri (MS)
Darzalex Faspro (Oncology)
Perjeta (Oncology)
Neulasta (Oncology Support: CSF)
Remicade (Crohn’s/UC)
Opdivo (Oncology)
Entyvio (Crohn’s/UC)
Ocrevus (MS)
Keytruda (Oncology)
Gammagard Liquid (Immune Globulin)
Tysabri (MS)
Darzalex Faspro (Oncology)
Perjeta (Oncology)
Neulasta (Oncology Support: CSF)
Remicade (Crohn’s/UC)
Opdivo (Oncology)
Entyvio (Crohn’s/UC) Ocrevus (MS)
Keytruda (Oncology)
MEDICARE
Medicare’s overall spend PMPM increased 4.5% in 2022, and while this does not compare to pre-COVID double digit trends, it does reflect a faster rate of growth experienced in the previous year (+3.1%). There was a 1.9% decrease in utilization from 2021 to 2022. From a cost perspective, there was a trend increase of 6.5%, with +1.4% attributed to inflation*, while the remainder was due to changes in drug mix (Pg. 5, Fig. 12). Breaking down utilization changes into various cost per utilizer per year groups (Pg. 3, Fig. 6) highlights the impact of drug mix on cost trend. Drugs costing <$100/utilizer/year experienced a utilization decrease of 4.3%, while drugs costing more than $50,000/ utilizer/year observed an 8.4% increase in use.
The top 10 spend categories accounted for 84% of spend in 2022 (Fig. 19). Oncology spend was $36.90 PMPM, and 49% or $18.04 was attributed to four of the top five spend drugs: Keytruda, Opdivo, Darzalex Faspro, and Tecentriq (Pg. 9, Fig. 21). Together, these four oncology drugs drove $2.66 increase in PMPM spend; however, other oncology products’ decrease in spend offset some of that for a $1.75 PMPM or 5.0% increase in the oncology category. A spend increase of 6.2% was seen in the non-oncology classes, led by various ophthalmic injection and hematological products, e.g., Eylea and Vyvgart (Fig. 19).
Neulasta’s falling ASP and use within the pegfilgrastim market basket (Pg. 42) counteracted the reimbursement increases observed in 2022 (Pg. 9, Fig. 22).
Top spend products such as Eylea, Opdivo, and Darzalex Faspro experienced dramatic increases in utilizers, driving their spend higher. For Medicare, Keytruda’s spend growth was heavily attributed to rising reimbursement and ASP (+$0.76 PMPM; Pg. 9, Fig. 22).
Viscosupple
Disease
Crohn’s Disease/ Ulcerative Colitis
Rheumatoid Arthritis
MEDICAL PHARMACY TRENDS
2022 MEDICARE TOP 10 MEDICAL BENEFIT DRUGS BY SPEND Figure 21
2021-2022 MEDICARE COMPONENTS OF CHANGE* Figure 22
Claims Per Utilizer Reimbursement Inflation/Dosing Utilizers
Due to rounding, totals may not add up accurately.
*Utilizers refers to the number of unique users for each drug and therapy combination.
*Reimbursement refers to changes in the level of provider reimbursement, provider mix, and site-of-service mix (relative to ASP).
*Inflation refers to ASP/AWP price changes on a per unit basis.
*Dosing refers to the number of units administered per claim.
Xgeva/Prolia
Tecentriq (Oncology)
Eylea (Ophthalmic
Keytruda (Oncology)
Darzalex Faspro (Oncology)
MEDICAL PHARMACY TRENDS
MEDICAID
Overall, Medicaid saw a PMPM trend decrease of 1.6% due to a 6.5% decrease in utilization (Pg. 5, Fig. 12), most of which can be attributed to high frequency drugs costing <$1,000/utilizer/year. There was an increase in the average cost per claim due to drug mix changes, where the use of drugs costing in excess of $50,000/ utilizer/year increased significantly — particularly for high-cost oncology and rare disease drugs (e.g., Keytruda and Tepezza; Pg. 11, Fig. 25).
Oncology drugs were the top spend class, representing 31% of total PMPM. Despite total Medicaid PMPM spend decreasing $0.31 PMPM in 2022, oncology drug spend rose 3.1% (+$0.18 PMPM; Fig. 23). This was primarily because of cost (+4.4%) versus utilization (-1.3%). The most notable exception is Keytruda, which increased $0.23 PMPM, mainly due to increased utilization (Pg. 11, Fig. 25).
For non-oncology drugs, spend fell $0.36 PMPM (or -2.8%; Fig. 24) in 2022, largely based on utilization declining 6.8%. The most notable therapeutic categories with decreases in PMPM spend that saw fewer utilizers in 2022 included gastrointestinal use of Remicade and extremely high-cost rare disease drugs (>$300k/utilizer/year) like Spinraza, Gamifant, Exondys, and Zolgensma (Pg. 11, Fig. 26).
The top 10 spend categories accounted for 72% of spend in 2022 (Fig. 23).
The two top spend drugs that saw the largest increases were Keytruda and Sublocade. Each had different reasons for their PMPM spend escalation. Keytruda’s main source was an increase in claims per utilizer. Sublocade had an increase in utilizers (Pg. 11, Fig. 26).
Medicaid was the only LOB with drugs from the rare disease category in the top 10 PMPM spend (Fig. 23). Both Exondys and Spinraza saw lower spend in 2022, albeit for different reasons. Fewer utilizers of Spinraza suppressed the PMPM by $0.22. While Exondys experienced growth in the number of claims per utilizer, spend fell primarily due to fewer units being administered per dose (Pg. 11, Fig. 26).
2021-2022 TOP 10 DRUG THERAPY CATEGORIES BY PMPM SPEND Figure 23
MEDICAL PHARMACY TRENDS
2022 MEDICAID TOP 10 MEDICAL BENEFIT DRUGS BY SPEND Figure 25
Due to rounding, totals may not add up accurately.
*Utilizers refers to the number of unique users for each drug and therapy combination.
*Reimbursement refers to changes in the level of provider reimbursement, provider mix, and site-of-service mix (relative to ASP).
*Inflation refers to ASP/AWP price changes on a per unit basis.
*Dosing refers to the number of units administered per claim.
Tepezza
Sublocade
Sublocade (Substance
Opdivo (Oncology)
Entyvio (Crohn’s/UC)
Exondys
Keytruda (Oncology)
Administrative Code Reimbursement
Much like in previous years’ trend reports, the site of service had a substantial impact on administration costs. Chemotherapy administration for Medicare and Medicaid realized PMPM decreases of 8.5% and 4.7% respectively, and commercial had an increase of 14.4% in 2022. The drop in spend associated with this same code for Medicare was a result of a 7% decrease in utilization combined with a small drop in cost. The decrease in spend for Medicaid for CPT 96413 (chemo infusion up to an hour) was overwhelmingly due to a 5% drop in use. Commercial’s increase in spend for CPT 96413 (chemo infusion up to an hour) was due to cost and utilization, with each increasing 6.5-7.5%.
Medicare experienced a significant jump in spend associated with CPT 96365 (IV infusion up to an hour) of 37.6%. This was mainly due to substantial increases in the cost per administration in 2022.
2022 TOP ADMINISTRATIVE CODES BY PMPM FOR HOSPITAL OUTPATIENT AND PHYSICIAN OFFICE Figure 27
COMMERCIAL
CPT® Code & Description
96413 Chemotherapy administration, intravenous infusion technique; up to 1 hour, single or initial substance/drug
96365 Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); initial, up to 1 hour
96375 Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); each additional sequential intravenous push of a new substance/drug
96372 Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular
96361 Intravenous infusion, hydration; each additional hour
MEDICARE
CPT® Code & Description
96413 Chemotherapy administration, intravenous infusion technique; up to 1 hour, single or initial substance/drug
67028 Intravitreal injection of a pharmacologic agent (separate procedure)
96365 Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); initial, up to 1 hour
20610 Under general introduction or removal procedures on the musculoskeletal system
96374 Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); intravenous push, single or initial substance/ drug
MEDICAID
CPT® Code & Description
90460 Immunization administration through age 18 via any route of administration, with counseling by physician or other qualified healthcare professional; first or only component of each vaccine or toxoid administered
96413 Chemotherapy administration, intravenous infusion technique; up to 1 hour, single or initial substance/drug
96372 Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); subcutaneous or intramuscular
96374 Therapeutic, prophylactic, or diagnostic injection (specify substance or drug); intravenous push, single or initial substance/ drug
96365 Intravenous infusion, for therapy, prophylaxis, or diagnosis (specify substance or drug); initial, up to 1 hour
MEDICAL BENEFIT CATEGORIES
Rare Disease
Rare disease therapies continued to be an area of growth and innovation offering new hope for patients. There were eight FDA approvals for drugs for low prevalence diseases in 2021-2022, offering new therapeutic agents for patients who previously had few to no options. Cell and gene therapies offer exciting new potential curative options contributing to growth in this category. Forecasts project that this growth will continue over the next three years at a rate of about 20-49% across all three LOBs (Fig. 31).
Demographic differences in patient populations contributed to various drug utilizations across the three LOBs. While spend percentage and PMPM can be low for these products, their annual allowed amount per utilizer can be significant — as seen in commercial on Pg. 35, the 10 highest cost drugs can be over $700,000 annually. Rare disease is unique in that PMPM spend can be driven by even a single utilizer due to the significant costs associated with the drugs.
There were several drugs with new utilization in 2022, including Luxturna, Amondys 45, Givlaari, and Ryplazim*.
Commercial had a 36% trend in this category, which was largely driven (60%) by spend increases for Gamifant (# of units {dose} increases) and Tepezza (# of utilizer increases). Overall, CNS rare disease drugs did see a drop in utilization across all three LOBs, caused by utilization decreases of Spinraza, Radicava, and Zolgensma (Pg. 36).
to market drug in
For list of rare disease drugs included, refer to Pg. 36.
Biologic Drugs for Autoimmune Disorders (BDAIDs)*
Commercial PMPM trend in this category increased modestly, driven mainly by increased utilization of Entyvio, Stelara SQ, and Inflectra for Crohn’s disease and ulcerative colitis (Fig. 32 & Pg. 38).
Entyvio utilization and cost increased in Medicare for Crohn’s disease and ulcerative colitis; it was offset by decreased utilization of most drugs indicated for rheumatoid arthritis. The result was an overall flat Medicare PMPM trend in this category (Fig. 32 & Pgs. 38, 39).
Medicaid PMPM trend decreased modestly based on decreased ASP rates due to biosimilar competition within this class.
Consistent across lines of business, the entrance of infliximab biosimilars has contributed to cost per claim decreases and also played a large role in the negative PMPM trend for Medicare and Medicaid (Fig. 32).
For all lines of business, other autoimmune disorders not called out above experienced no remarkable change from the previous year’s PMPM spend levels.
• Entyvio’s growth in market share (34.8% to 35.3%; Pg. 38, Fig. 102) has increased spend $0.33 PMPM from the previous year.
• Remicade’s market share and cost have continued to drop (-5% market share, price change -$3,233 per utilizer (Pg. 32, Fig. 92), with utilization shifting to biosimilars Inflectra and Renflexis in 2022.
• While Remicade (<$30k/utilizer/year) retained the majority of utilization within this class, Entyvio’s (~$45k/utilizer/year) use began to contend with that of Remicade.
• Outside of Remicade, Entyvio dominated this space despite the availability of infliximab biosimilars ranging from ~$16-19k/ utilizer/year.
• Provider reimbursement may be more favorable with Entyvio due to ASP decreases from biosimilar competition in the infliximab class.
MEDICARE
Rheumatoid arthritis
• Spend fell by $0.13 PMPM in 2022, driven by negative spend PMPM trend across nine out of 11 RA indicated drugs. Notably, Rituxan was down $0.10 PMPM due to both cost per claim and annual claims per 1k members decreasing (Pg. 39, Fig. 106).
Crohn’s disease and ulcerative colitis
• Despite less costly infliximab biosimilars being available in this space, Entyvio, at a cost of >$30k/utilizer/year, has grown to dominate spend due to higher cost and utilization.
MEDICAID
Crohn’s disease and ulcerative colitis
• Spend decreased $0.14 PMPM in 2022.
• The main driver of the reduced spend was Remicade, which dropped from $0.56 to $0.32 in 2022, driven equally by reduced cost and utilization across all sites of service.
• Other drugs, including Entyvio, Stelara SQ, Stelara IV, Inflectra, and Avsola, experienced slight increases.
Crohn’s/UC chosen for LOB deep dives based on the size of spend and spend growth in 2022. *Refer to Pg. 51 in the appendix for definition of the above abbreviated conditions. **Values less than $0.10 PMPM may not be shown on graphs.
36
MEDICAL BENEFIT CATEGORIES
Oncology*
Commercial oncology PMPM jumped by 19.5% in 2022 (Fig. 38). Top drivers of growth included Keytruda, Darzalex Faspro (ease of administration), Enhertu, and Opdivo. Each of the top drivers experienced substantial increases in utilizers, some of which can be attributed to expanded indications: Keytruda (breast), Opdivo (GI), Enhertu (lung and breast), Darzalex Faspro (relapsed multiple myeloma) (Pgs. 44-46).
Despite Medicare’s oncology PMPM increasing 5% in 2022 (Fig. 38), oncology utilization was down 5.9%, particularly in rituximab, bevacizumab, and trastuzumab market baskets. Darzalex Faspro’s expanded indications and simplified administration (SQ vs. IV) drove its 47.3% (+$0.74 PMPM) growth in 2022. Some transition of CAR-T drugs (e.g., Breyanzi, Yescarta) from an inpatient to an outpatient setting was also a notable contributor to increased outpatient spend in 2022.
Compared to commercial and Medicare, the growth in oncology for Medicaid was marginal (+3.1%). Decreased PMPM spend for Medicaid included rituximab, bevacizumab, trastuzumab products, and other agents such as Alimta, Kymriah, and Yervoy (which saw fewer utilizers).
*Does not include oncology-support drugs such as antiemetics, colony-stimulating factors, gastrointestinal: chemoprotectants, and erythropoiesis-stimulating agents.
MEDICAL BENEFIT CATEGORIES
Commercial — Breast Cancer Deep Dive
Since 2018, breast cancer spend has grown from $3.01 to $4.65 PMPM (+54.7%) and had a significant +33.4% trend in 2022 largely due to Keytruda and Perjeta (Fig. 44).
Keytruda received an expanded indication for treatment of triple negative breast cancer July 2021. The approval for this type of breast cancer was practicechanging due to previously limited treatment options.
Breast cancer-indicated use of Keytruda surged ~400% in 2022, accounting for +$0.79 out of the +$1.39 growth in total Keytruda spend PMPM (Pg. 7, Fig.17)
• The substantial increase in unique utilizers per 100k members (3.5 to 10.6) alone was responsible for half the +$0.79 rise in 2022 Keytruda spend as seen in Fig. 43.
The Enhertu increases were likely due to newly discovered efficacy and resulting approval for treatment of HER2-low breast cancer in 2022.1
Perjeta’s increased utilization was likely a result of the newly available data in 2021 indicating increased survival through its combined use with a trastuzumab product in the first line setting for those with HER2+ breast cancer.2
Breast cancer chosen for deep dive based on the size of spend and spend growth in 2022.
*Market share based on unique drug utilizers.
**Due to rounding, totals may not add up accurately.
**Impact not shown for all components when impact is negligible.
References:
** 2021-2022 COMMERCIAL COMPONENTS OF
**Utilizers refers to the number of unique users for each drug and therapy combination.
**Reimbursement refers to changes in the level of provider reimbursement, provider mix, and site-ofservice mix (relative to ASP).
**Inflation refers to ASP/AWP price changes on a per unit basis.
**Dosing refers to the number of units administered per claim.
Multiple myeloma spend increased from $4.10 to $4.86 PMPM (+18.6%) in 2022 (Fig. 47) and was almost entirely driven by increasing costs. Since 2018, spend for this cancer type has grown from $2.55 to $4.86 PMPM (+90.8%).
The increases in Darzalex Faspro, driven by significant increases in utilization combined with Kyprolis increases in claims per utilizer, were the primary contributors to the total 18.6% trend in multiple myeloma treatment spend on the medical benefit (Fig. 48).
Darzalex IV remained a high-spend multiple myeloma drug in 2022 ($0.57 PMPM) but has trended down from the previous year’s spend levels (-36.1%).
Darzalex IV’s utilization decrease was exceeded by Darzalex Faspro’s growth.
• Total Darzalex utilization went from 42.3 to 45.7 utilizers per 100k members.
• Switching to the Faspro formulation occurred due to preferring shortened administration time and more convenient SQ route of administration (versus IV for original Darzalex formulation).
Multiple myeloma chosen for deep dive based on the size of
*Market share based on unique drug utilizers.
**Due to rounding, totals may not add up accurately.
**Impact not shown for all components when impact is negligible.
6 SPEND DRUGS Figure 47
**Utilizers refers to the number of unique users for each drug and therapy combination.
**Reimbursement refers to changes in the level of provider reimbursement, provider mix, and site-ofservice mix (relative to ASP).
**Inflation refers to ASP/AWP price changes on a per unit basis.
**Dosing refers to the number of units administered per claim.
Darzalex Faspro Kyprolis Velcade Darzalex IV Empliciti Xgeva
MEDICAL BENEFIT CATEGORIES
Medicaid — Breast Cancer Deep Dive
Breast cancer spend increased from $1.53 in the previous year to $1.74 PMPM (+13.2%) in 2022. Since 2018, breast cancer spend has grown from $1.23 to $1.74 PMPM, a 41% trend increase (Fig. 52).
Drug mix changes were the major driver of cost trends in 2022; higher spend products like Keytruda and Enhertu experienced triple digit utilization trend gain.
Keytruda utilization trend was primarily utilizer driven (+135.5%) vs. claims per utilizer (+42.4%).
Enhertu utilization was primarily driven by a +327.7% increase in utilizers and a 18.3% increase in claims per utilizer. The Enhertu increases are likely due to newly promoted efficacy1 and new approval for HER2-low breast cancer in 2022. Enhertu was the first FDA-approved option for this indication (Fig. 53).
Perjeta’s PMPM has declined since its most recent peak in 2019. Although Perjeta’s Medicaid PMPM spend has remained flat over the past couple of years, it is still the No. 2 drug spend in this category.
Breast cancer chosen for deep dive based on the size of spend and spend growth in 2022.
*Market share based on unique drug utilizers.
**Due to rounding, totals may not add up accurately.
**Impact not shown for all components when impact is negligible.
References:
Keytruda Perjeta Kadcyla Kanjinti Enhertu Xgeva
** 2021-2022 MEDICAID COMPONENTS OF CHANGE Figure 53
**Utilizers refers to the number of unique users for each drug and therapy combination.
**Reimbursement refers to changes in the level of provider reimbursement, provider mix, and site-ofservice mix (relative to ASP).
**Inflation refers to ASP/AWP price changes on a per unit basis.
**Dosing refers to the number of units administered per claim.
The oncology support antiemetics PMPM trended higher for commercial line of business (Fig. 57) largely due to increased utilization of higher cost products such as Cinvanti and Emend. Although Aloxi and Zofran utilization grew in 2022, their growth did not heavily impact commercial spend PMPM due to their relatively low cost per claim.
Medicare and Medicaid showed lower total spend PMPM in 2022 (Fig. 57), which can be mostly attributed to substantial decreases in utilizers for Aloxi and Emend in addition to cost for Akynzeo.
For Medicare, the cost per claim for Akynzeo decreased by 23% from the previous year, in line with its declining ASP. Aloxi continued to have lower PMPM trend, with an 81% drop in its cost per claim since the launch of its generic product in 2018.
Looking ahead, the PMPM spend in this category remains flat for commercial and continues to tumble in the government LOBs due to the lack of significant pipeline drugs in the category and declining ASPs.
Oncology Support: Long-Acting CSF
The PMPM for oncology support longacting CSF class continued to trend downward across all lines of business (Fig. 61), resulting from increased uptake of biosimilars for all LOBs and decline in the use of cytotoxic chemotherapy (Medicaid only).
The utilization trend for Neulasta dropped by double digits: -16% for commercial, -17% for Medicare, and -20% for Medicaid. Neulasta remained the top-used drug in this category, capturing between 6172% of market share for all LOBs in 2022 (Pg. 42). This is likely due to the easier administration associated with on-body injector Neulasta Onpro.
Udenyca was the most utilized biosimilar in this category, holding approximately 13% (commercial), 8% (Medicare), and 19% (Medicaid) market share (Pg. 42). Udenyca PMPM spend dropped across all lines of business, largely due to cost per claim decreases and a shift from hospital outpatient to physician site of service.
This category is forecasted for further PMPM decline as ASPs continue to erode from biosimilar competition, including Udenyca’s on body delivery system, which is pending FDA approval.
MEDICAL BENEFIT CATEGORIES
Hematology*
Hematology continues to be a category to watch, with all LOBs seeing an overall increase in PMPM spend in 2022 (Fig. 65). The basis for the overall spend PMPM increase was unique for each LOB: commercial due to overall claim volume increasing by 15%, and Medicare and Medicaid due to overall cost per claim increasing by 28% and 5%, respectively.
Newer therapies for myasthenia gravis made an impact on this category’s PMPM shortly after approval. gMG indicated drugs experienced substantial increases in PMPM spend across all LOBs, particularly Ultomiris (expanded indication) and Vyvgart (new drug approval).
Nplate was another significant driver of PMPM spend increases: +$0.05 commercial, +$0.10 Medicare, and +$0.08 Medicaid PMPM (Pg. 40).
With multiple drugs available for the unique indications in this class, management strategies can be designed to help control spend.
As hematology drugs continue to receive expanded indications, this category will be one to monitor.
*Hematology drugs included in this report are Adakveo, Nplate, Panhematin, rituximabs, Soliris, Ultomiris, Uplizna, and Vyvgart.
*Rituximab products were only included when used for hematologic indications.
2022 % OF MEDICAL DRUG SPEND Figure 66
2022 COST PER CLAIM Figure 67
ONCOLOGY BIOSIMILAR TRENDS*
Oncology biosimilars have seen significant provider and payer uptake. Biosimilars for bevacizumab, trastuzumab, and rituximab made up greater than 73% of the market share for each product line (Fig. 69-71). The embracing of biosimilars occurred rapidly — the innovator/reference product for each had greater than 93% market share just a few years ago. These products are prime examples of how biosimilars can influence a market basket and lower the cost of life-saving therapies.
The short-acting CSF class has seen similar uptake of biosimilars in the same time period. Biosimilars made up 86% of the market utilization, with Zarxio taking the lion’s share (Pg. 41). Utilization of biosimilars for long-acting CSFs has not been as widely adopted (Fig. 72). Both Neulasta formulations** continued to hold the majority of the market share. Biosimilars continued to make ground in the space, but at a slower pace than the short-acting products (Pg. 42). This may change in the next year with the approval of an on-body injector biosimilar.
The epoetin alfa class (not shown) has seen a biosimilar market shift, despite a shortage of Retacrit during 2022. The biosimilar accounts for 64% of the market utilization.
Biosimilar adoption and development has reduced oncology spend, and will continue to do so as more products come to the market. Embracing biosimilar strategies can play a significant part in easing medical drug costs moving forward.
*For more market share detail, refer to Pgs. 47 and 48 of the appendix.
**Product has one HCPCS code for SQ and OnPro formulations.
BEVACIZUMAB MARKET SHARE** Figure 69
TRASTUZUMAB MARKET SHARE Figure 71
RITUXIMAB
MARKET SHARE** Figure 70
MARKET SHARE Figure 72 Market share based on unique drug utilizers. Only drugs with $0.01 PMPM or greater were included in market share analysis.
Market share numbers above represent the average across all LOBs.
**Bevacizumab and rituximab market shares reflect oncology indications only.
Medical benefit trend and spend was the top concern for payers in 2022, which was previously number 4 from the previous year’s survey. This was likely the result of continued PMPM spend increases since COVID 2020 lockdowns, especially for commercial, where the 2022 trend (13.5%) exceeded the 2019 trend (7.6% prior to COVID). One-time gene and cell therapies and oncology were the number 2 and 3 top concerns respectively for half of payers, as 10 new cell and gene therapy products were approved in the last year and the pipeline in oncology continues to brim with innovation. Nearly all payers were using prior authorization and/or step therapy to manage trend, with the majority requiring PA on ≥100 drugs. Most payers were also leveraging SOS programs, which had an average reported savings of 25%, to address the growing PMPM trend. Interestingly, the majority of payers reported responsibility for managing non-traditional medical pharmacy benefit categories, with the top three being vaccines, insulin devices, and administration services.
MANAGEMENT TOOLS Figure 74
MEDICAL PHARMACY MANAGEMENT
Payer Survey: Oncology Management Strategies
Top Oncology Management Strategies (Fig. 78)
The top three oncology specific strategies payers were using or considered using to address the large and growing spend of medical oncology drugs are regimenbased prior authorizations, dose rounding, and oncology site of service.
Drug Wastage* (Fig. 80)
The Hematology/Oncology Pharmacy Association (HOPA) recognizes and supports dose rounding of oncology products to reduce waste and cost. Most payers surveyed have embraced HOPA’s position by implementing drug wastage programs, albeit with differing requirements and rounding protocols, with average reported savings of 19%.
Oncology Site of Services (SOS) (Fig. 79)
The most common drug category payers reported oncology SOS use for was immunotherapies, which includes Keytruda and Opdivo. Reimbursement (i.e., higher cost sites of care) drove 18% of the two drugs’ combined commercial PMPM increase ($0.31 of $1.76) from 2021 to 2022, highlighting the SOS program savings opportunity for this category.
Oncology
Biosimilars (Fig. 81)
Biosimilars continued to be a costsaving strategy, as most payers reported preferring biosimilars over reference products to drive savings. Half of payers required step therapy for new utilizers, while another one-third required biosimilar use for all utilizers.
TOP ONCOLOGY MANAGEMENT STRATEGIES Figure 78
In use or considering use (N = 25)
Regimen-based PAs
Drug wastage
Oncology SOS
Performance status PA criteria
Exclude NCCN 2A recommendations
Incentivize lower-cost regimens
Study eligibility PA criteria for accelerated approval drugs
ONCOLOGY SITE OF SERVICE Figure 79
DRUG WASTAGE (DW)* Figure 80
DW Program Type (N = 22)
ONCOLOGY BIOSIMILARS Figure 81
*Drug wastage (DW) survey questions were not specific to oncology. DW programs typically include mostly oncology related drugs.
Prior authorization (PA) and dose wastage were the two most common strategies payers utilized for managing checkpoint inhibitor immunotherapies. These therapies accounted for a material amount of medical drug spend and included Keytruda, the 2022 top spend medical drug and trend driver for all lines of business. Payers reported average savings of 8% from dose optimization (flat versus weight-based) programs for this category.
Precision
Medicine in Oncology (Fig. 83)
Precision Medicine has become an important proposition for payers — nearly half are concerned about genomic testing management and require PAs for testing. Interestingly, 60% of those payers using PA involved the pharmacy department in the genomic testing process, and for good reason — there were more than 100 FDA-approved oncology drugs with biomarker testing, plus more in the pipeline.1
CAR-T therapies are a challenging category to manage due to their complex administration process, which can involve additional costs for inpatient stays and management of side effects. Although the CAR-T products are priced ~$450K, the total cost for CAR-T product and associated care services can vary greatly. One study found costs per individual ranging from ~$350K to more than $2 million.2
Most payers use PA with single case agreements for reimbursement of the CAR-T product and related inpatient stay. Reimbursement strategies may evolve over time, as many payers did not see CAR-T administration move to the outpatient setting. Lastly, nearly one quarter of payers have considered CAR-T product preferencing.
Pharmacy Dept. Involvement in Genomic Testing (N=15)
MEDICAL PHARMACY MANAGEMENT
Payer Survey: Rare Disease Management Insights
Ultra-Rare Disease (Fig. 85)
All payers utilized prior authorization for ultra-rare conditions (≤1/50,000 people), while 93% of payers also utilized medical records and 85% consult key opinion leaders. These heightened management strategies reflect the high cost of these medications — the most expensive drug, Hemgenix (etranacogene dezaparvovec) for hemophilia B, costs $3.5 million per treatment.
Gene Therapy (Fig. 87)
Most payers reported PA and value-based contracts and/or warranties as their top management strategies. However, a few payers reported excluding coverage for gene therapies entirely.
Management strategies will evolve as more real-world experience is gained and clinical guidelines start addressing their place in therapy. Strategies may eventually differ between gene therapy products addressing an unmet need versus those entering a therapeutic area with established and effective competitor therapies.
Hemophilia
(Fig. 86)
Nearly three-fourths of payers allowed billing of the medical benefit for hemophilia products. The most common management strategies involved PA, assay management, and care/case management services.
Hemophilia will be an important therapeutic area to follow with new gene therapy competition (Roctavian and Hemgenix) and a robust pipeline including new mechanisms of action and the potential for hemophilia type agnostic treatments.
Due to rounding, totals may not add up accurately.
2022 TOP 20 COMMERCIAL PMPM SPEND BY DRUG THERAPY CATEGORY Figure 89
TOP 25 DRUG PMPM SPEND 2021-22 Figure 93 This year’s report includes drivers and dampeners. *Trend driver rank is based on total change from 2021-22.
4
$2,168,000
*Drugs administered in the hospital inpatient setting are not included in analyses. *Annual allowed cost per utilizer rounded to nearest thousand. The above drugs are approved for conditions that fall into the following categories: Rare Diseases, CNS: Rare Diseases, Enzyme Replacement Therapy, Antihemophilics, Myasthenia Gravis, Oncology, and Hereditary Angioedema. $1,237,000
Cost per Utilizer
*Drugs with negligible amounts of spend were not included in market share analysis. *Market share based on unique drug utilizers. Due to rounding, totals may not add up accurately.
*Rare disease drugs included in this report are Amondys 45, Enjaymo, Evkeeza, Exondys 51, Gamifant, Givlaari, Luxturna, Nexviazyme, Onpattro, Oxlumo, Radicava, Reblozyl, Ryplazim, Spinraza, Tepezza, Viltepso, Vyondys 53, and Zolgensma.
Spinraza Gamifant Exondys 51 Givlaari Reblozyl Radicava Other Tepezza Spinraza Gamifant Exondys 51 Givlaari Reblozyl Radicava Other
2022 MARKET SHARE TRENDS: SC AND IV IMMUNE GLOBULIN
$64,796 $66,228
*Drugs with negligible amounts of spend were not included in market share analysis. *Market share based on unique drug utilizers. Due to rounding, totals may not add up accurately.
utilizers. Due to rounding, totals may not add up accurately.
2022 MARKET SHARE TRENDS: OPHTHALMIC INJECTIONS
Due
Due to rounding, totals may not add up accurately.
Due to rounding, totals may not add up accurately.
Orencia
APPENDIX
2022 BIOSIMILAR MARKET SHARE*
Drug Group** Figure 123
Trastuzumab Drug Group Figure 124
Rituximab Drug Group** Figure 125
Infliximab Drug Group Figure 126
*Market share based on unique drug utilizers. **Bevacizumab and Rituximab market share reflects oncology indication only. Totals may not add to 100% because drugs with immaterial market share are excluded from the graphics.
Hycela
Remicade
APPENDIX
2022 BIOSIMILAR MARKET SHARE*
Pegfilgrastim Drug Group Figure 127
Neulasta
Drug Group Figure 128
Epoetin Alfa Drug Group Figure 129
*Market share based on unique drug utilizers. Totals may not add to 100% because drugs with immaterial market share are excluded from the graphics.
administration through 18 years of age via any route of administration, with counseling by physician or other qualified healthcare professional; first or only component of each vaccine or toxoid
