The report claims that “since 2010 prescription drug spending has increased 10 percent annually for Blue Cross and Blue Shield (BCBS)members since 2010, an overall rise of 73 percent.This upward trend is due to a small fraction of emerging, patented drugs with rapid uptake and large year-over-year price increases that are more than offsetting the continued growth in utilization of lower-cost generic drugs.
These higher costs are being incurred by consumers and payers alike; while consumer out-of-pocket costs have risen just three percent annually for prescription drugs in total, they have risen 18 percent annually for patented drugs.”
You might wonder how it is possible for consumer out of pocket costs to rise 3 percent annually if the increase in patented drug spending has increased 18 percent? Is it because health plans are sucking up the difference in cost for our sake? A closer look at the findings suggests answers.
1 BCBS compared apples – the average increase in out of pocket costs – which includes the increase in the use of generic drugs – to oranges, namely the pre-rebate increase in spending on drugs for Hepatitis C, autoimmune diseases and cancer for less than 1 percent of chronically ill patients. Indeed, the BCBS ‘study’ acknowledges that the drug spending data they use is pre-rebate. But let’s stick with sticker prices for now and ask: how does the increase in the use of a small number of new medicines affect drug spending and total health expenditures.