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U.S. prescription spending increase in 2014 highest in over a decade

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Prescription drug spending increased 13.1% in the United States last year, attributed partly to an increase in spending for specialty drugs, according to Express Scripts Inc.

The overall increase in national drug spending last year was the highest rate in more than a decade, according to the Express Scripts 2014 Drug Trend Report released Tuesday. The study included group health claims and Medicare and Medicaid prescriptions.

For specialty medications, such as hepatitis C therapies and compounded drugs, utilization increased 5.8% and cost increased 25.2% from 2013 to 2014, the report states.

Specialty medications accounted for 31.8% of overall drug spending in 2014, up from 27.7% the year prior, according to the report.

“Hepatitis C and compounded medications are responsible for more than half of the increase in overall spending,” Express Scripts said in a statement. The St. Louis-based pharmacy benefit manager noted that the United States spent about 743% more on hepatitis C drugs in 2014 than it did in 2013.

In 2014, for the first time, compounded drugs ranked among the top 10 therapy classes, according to Express Scripts. Drugs for diabetes and high blood cholesterol were the first and second largest therapy classes used last year, the report said.

“Since the implementation of new regulations in 2012 requiring that all components of compounded drugs be specified and billed at the ingredient level rather than being rolled up under the highest priced ingredient, bulk manufacturers and compounding pharmacies have raised prices substantially for the components of many compounded drugs,” the report states. “The result has been unsustainable cost increases.”

If compounded drugs were excluded, total overall drug spend would have increased 10.4% rather than 13.1%, according to the report.

Other costly specialty treatments for conditions like multiple sclerosis and cancer accounted for more than 31% of total drug spending in 2014, according to the statement.

For non-specialty prescription medications, utilization decreased 0.1% and cost increased 6.5%, leading to a 6.4% increase in spending from 2013 to 2014, the report states.

“For the past several years, annual drug spending increases have been below the annual rate of overall health care inflation in the (United States), but that paradigm is shifting dramatically as prices for medications increase at an unprecedented and unsustainable rate,” Dr. Glen Stettin, senior vice president of clinical, research and new solutions at Express Scripts, said in the statement. “Now, more than ever, plans need to tightly manage the pharmacy benefit, implement smarter formularies, control compounded medication use and offer the right clinical support to ensure all patients are able to achieve the best possible health outcomes at a price our country can afford.”