2014 Public exchange report DEFINING
evolution
Our purpose To help people get the medicine they need to feel better and live well
DEFINING
evolution 2014 Public exchange report
Contents
3
4
An evolution unfolds Defining evolution
6 Key findings 8
Defining demographics
10
Defining plan types
12
Defining drug spend and utilization
22
Defining the future
DATA AND INSIGHTS
• This report looks closely at changes in drug costs, utilization and other key measures that affect pharmacy spending. Data from Jan. 1 – Dec. 31, 2014, is compared across Prime Therapeuticsʼ (Prime’s) public exchange and commercial members. Unless otherwise noted, all insights come from Prime’s analyses. • Pharmacy trend data represents more than 13 million unadjusted public exchange claims and more than 143 million unadjusted commercial claims processed in 2014. Claim counts are assigned based on daysʼ supply, and 90-day fills have been converted to carry the same weight as 30-day retail fills. • To calculate data within this report, we used an average membership for both the public exchange and commercial populations. KEY TERMS Public exchange members: people enrolled in a public health insurance exchange plan with pharmacy benefits
provided by Prime Commercial members: people enrolled in health insurance plans provided by an employer or other organization
with pharmacy benefits provided by Prime (excluding Medicare and Medicaid) Unadjusted claims: any pharmacy claim filled, no matter the length of the supply, is counted as one claim Adjusted claims: claim counts are attributed to the days’ supply, with one prescription counted for every
30 days of supply (e.g., if claim is for 90-day supply, it would be counted as three prescriptions) Specialty: all drugs managed through our specialty pharmacy program Traditional: all drugs not on our specialty drug management list Total drug spend: combined spend for drugs covered under the pharmacy benefit
Definitions matter: Specialty drugs All pharmacy benefit managers (PBMs) face the same challenges: high costs, steep inflation and rising use. But not all PBMs measure these challenges in the same way. This is particularly true of specialty drugs. There
A NOTE ON THE NUMBERS
is no single definition of “specialty.” In the past, many commonly used and low-cost drugs were excluded from specialty classifications. Today, these drugs are frequently being included, a redefinition that can make specialty drug spend appear lower. Given the extreme variability of specialty drug costs, the definition truly makes a difference.
an evolution
unfolds
We’re proud of our success in this
Beyond those basic numbers, this
new market. And proud to have
report provides some interesting
helped 1.4 million people in 2014,
comparisons of these two groups,
many previously uninsured, get
including the:
the medicine they need to feel
• Leading drug categories by
better and live well. As of today, we are now serving 1.95 million public exchange members. Prime — like others in the industry — entered the first year
utilization and spend • Top drugs by utilization and spend • Impact of hepatitis C and HIV
of public health exchanges with
We don’t know what the future
many unanswerable questions.
holds. But with a full year of
Given the infancy of this market,
public exchange data behind
we were unsure how many people
us, we’re also providing our
would enroll for coverage through
perspective on the legal
our Blue Cross and Blue Shield
questions, economic conditions
(Blue) Plan clients and owners,
and market trends that will likely
what their health status would
influence the public exchange
be, or what level of coverage
market going forward.
they would select.
In the meantime, we’re
We anticipated that public
excited about serving our
exchange members would be
public exchange members
older and have more health
together with our Blue Plan
care needs than our commercial
owners and clients in 2015.
members. This report, based on the first full year of data, confirms those initial expectations. Prime’s public exchange members were, on average, eight years older, more likely to be women and had a per member per month
Michael Showalter
(PMPM) cost 4.1 percent higher
Senior Vice President
than our commercial members.
Prime Therapeutics
Prime served 1 in every 6 people who enrolled in health coverage through public health exchanges in 2014.
DEFINING
The introduction of public health care exchanges has ushered in a new type of health care consumer. As we analyzed this population’s demographics, medicine use and drug spend in 2014 compared to our commercial membership — and reflected on what the future may bring — we uncovered several key findings.
4
In 2014, a unique population emerged. 5
key findings for
public exchange Older and predominantly female Prime’s 2014 public exchange population was 56.1 percent female and had an average age of 42.6 years.
More cost-conscious Public exchange members chose lower-cost medicines (generic drugs and 90-day supplies of long-term medicines) more frequently than commercial members.
$
Filled more prescriptions Public exchange members filled 11.7 prescriptions on average in 2014, exceeding commercial member fills by 13.6 percent.
6
membership Used fewer specialty drugs, but incurred higher specialty drug spend Public exchange members incurred 16.4 percent higher specialty drug spend, despite lower utilization, due largely to higher use of more expensive drugs.
hep C hi v
More likely to have hepatitis C or HIV Public exchange members were 2.5 times more likely to have hepatitis C or HIV, and that drove almost 200 percent higher spend on related medicines.
Understanding of health benefits continues to evolve In 2014, almost 3 out of 4 public exchange members chose silver plans. As this population gets healthier and becomes more educated on their options, catastrophic and bronze plans are quickly gaining popularity.
Growing in numbers — for now On par with national growth, Prime saw a public exchange membership enrollment spike of 41 percent for the 2015 plan year.
7
d e m o g r a p h i c s
DEFINING
In 2014, health reform introduced the public exchanges. With this, a new member demographic emerged in the health insurance marketplace.
8
commercial
public exchange gender
49.9%
56.1%
50.1%
43.9% average age
34.7 years
42.6 years
A higher percentage of exchange members were between 45 and 64 years old, pushing the average age higher than Prime’s commercial membership.
age tier mix (by years) 22%
<18
8%
26%
18 – 34
25%
16%
35 – 44
16%
18%
45 – 54
22%
16%
55 – 64
28%
2%
>65
1%
Prime’s findings are similar to the national average, which found that 28 percent of individuals who selected a health insurance plan in the public marketplace were 18–34 years of age.1
9
DEFINING
plan types
Primeâ&#x20AC;&#x2122;s silver-plan enrollment level was similar to the national average of 65%.2
Members enrolled through the public exchanges had distinctly different health plans from our commercial population. Notably, the types of health plans they could select were regulated. As outlined in the Affordable Care Act (ACA), there were five basic types of qualified health plans available.
Qualified health plans Plan type
Premiums
Out-of-pocket costs for members (average member cost share)
Plan-paid costs (average plan cost share)
Percent of Prime始s public exchange members who selected plan type
Platinum
10%
90%
4.6%
Gold
20%
80%
7.6%
Silver
30%
70%
71.2%
Bronze
40%
60%
16.4%
Catastrophic*
>40%
>60%
0.2%
*Available only to people who are under 30 years old or have a hardship exemption.1
11
DEFINING
$ drug spend & utilization 12
commercial
public exchange
Prime commercial versus public exchange membership drug costs (Jan. 1â&#x20AC;&#x201C;Dec. 31, 2014) difference Average PMPM cost
$82.05
$85.42
+4.1%
Specialty spend as a percent of overall spend
24.6%
28.6%
+16.4%
90-day supply utilization as a percent of overall claims
9.0%
13.6%
+51.0%
Member spend (out-of-pocket) as a percent of overall spend
19.4%
14.3%
-26.3%
Generic utilization
80.9%
85.6%
+5.8%
Drug costs
16.4%
Primeâ&#x20AC;&#x2122;s public exchange membership showed slightly higher overall PMPM drug costs versus our commercial membership. This was because the mix between traditional and specialty drugs differed. Our public exchange population used high-cost drugs such as Sovaldi, Harvoni and Atripla more heavily.
Specialty drug spend was 16.4 percent higher for our public exchange membership than our commercial membership due to greater use of high-cost drugs.
13
spend
Top drug categories by spend We identified the top 20 drug categories by total spend for the public exchange and commercial populations and found several similarities: • Most (18 of 20) categories overlapped, with the exception of pulmonary hypertension and immunosuppressants, which ranked 19 and 20 on the list of top drug categories by spend for the public exchange members, respectively. • Three of the top five categories on each list overlapped, including: diabetes, autoimmune and pain. • Diabetes was the highest spend category for both populations. We also found some significant differences. Public exchange members incurred significantly higher spend for both hepatitis C and HIV drugs. This indicates a higher incidence of severe chronic disease in this group.
Top drugs by spend
5
by spend. We found that hepatitis C and HIV drugs accounted for five of the
drugs by spend for
exchange members. For commercial
members treated hepatitis C or HIV.
14
categories, we analyzed the top drugs
Five of the top 10 public exchange
$
In addition to analyzing the top drug
top 10 drugs by total spend for public members, only one of the top 10 drugs by total spend was associated with hepatitis C, and none with HIV. This major difference can be attributed to the high cost of Sovaldi, Olysio, Harvoni, Atripla and Truvada.
$
Read an in-depth analysis on page 20.
commercial
public exchange
Top 20 drug categories by spend (Jan. 1–Dec. 31, 2014) 10.1% Diabetes 8.4% Autoimmune 5.3% Pain 4.9% High cholesterol 4.8% Multiple sclerosis (MS) 4.5% ADHD 4.2% High blood pressure 4.1% Respiratory 3.6% Estrogens and osteoporosis 3.6% Cancer (pills) 3.5% Hepatitis C 3.2% Depression 2.8% HIV 2.5% Gastrointestinal disorders 2.3% Seizure 2.0% Psychosis Primeʼs public exchange membershipʼs top five drug categories by spend, and where those categories fall for commercial members.
1.0% Lifestyle 1.0% Growth hormones 0.9% Blood thinners 0.8% Hemophilia
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Diabetes 10.9% Hepatitis C 9.9% HIV 8.8% Autoimmune 6.8% Pain 6.1% Cancer (pills) 4.0% Multiple sclerosis (MS) 3.9% Respiratory 3.5% High cholesterol 3.3% High blood pressure 3.3% Depression 3.2% ADHD 2.8% Psychosis 2.6% Seizure 2.3% Estrogens and osteoporosis 2.2% Gastrointestinal disorders 1.4% Hemophilia 1.0% Blood thinners 0.9% Pulmonary hypertension 0.5% Immunosuppressants 0.5%
Top 10 drugs by overall spend (Jan. 1–Dec. 31, 2014) Humira (arthritis) Enbrel (arthritis) Sovaldi (hepatitis C) Crestor (cholesterol) Nexium (acid reflux) Abilify (depression) Five of the top 10 drugs on the list of top drugs by overall spend for public exchange members treated hepatitis C or HIV.
Copaxone (MS) Lantus (diabetes) Amphetamines (pain) Advair (asthma)
1 2 3 4 5 6 7 8 9 10
Sovaldi (hepatitis C) Humira (arthritis) Atripla (HIV) Enbrel (arthritis) Abilify (depression) Lantus (diabetes) Olysio (hepatitis C) Truvada (HIV) Duloxetine HCL (depression) Harvoni (hepatitis C)
15
utilization
Utilization differences Utilization, the use of drugs, grew quarter over quarter in 2014 for both our commercial and public exchange memberships. And both populations overwhelmingly filled 30-day supplies at retail pharmacies. But public exchange members filled more prescriptions, with an annual average of 11.7 per member (versus 10.3 for commercial members). How members got their medicines filled varied greatly. Public exchange members were 37 percent less likely to use home delivery. But they used our extended supply network (ESN) more than twice as often as commercial members. Home delivery and ESN utilization stayed fairly consistent quarter over quarter.
Top drug categories by utilization Our commercial and public exchange memberships matched each other in rank for the top three drug categories by utilization: pain, high blood pressure and depression. Looking across the top 20 categories, there were also some notable differences. Exchange members had a higher utilization for medicines in nine categories (see below).
Exchange members had higher utilization
9
of traditional drugs in nine categories.* +12.2%
High blood pressure
+9.9%
+21.6%
Pain
+10.7% Blood
+7.3%
Depression
+21.5% Diabetes +35.2%
Seizure
Insomnia
+26.9%
thinners
Psychosis
+203.7% HIV
commercial
public exchange
Prime commercial versus public exchange membership utilization (Jan. 1â&#x20AC;&#x201C;Dec. 31, 2014) difference Average number of prescriptions per member per year
10.3
+13.6%
11.7
Specialty as a percent of overall claims
0.52%
-17.0%
0.43%
Home delivery as a percent of overall claims
2.7%
-37.0%
1.7%
ESN as a percent of overall claims
6.3%
+88.9%
11.9%
Top 10 drug categories by utilization* (Jan. 1â&#x20AC;&#x201C;Dec. 31, 2014) 14.0% High blood pressure 8.9% Pain 7.4% Depression 6.1% High cholesterol 5.4% Estrogens and osteoporosis 5.2% Diabetes 3.5% Respiratory 3.1% Gastrointestinal disorders 2.9% Seizure 2.5% ADHD
*Utilization as a percent of total claims
1 2 3 4 5 6 7 8 9 10
High blood pressure 15.8% Pain 10.9% Depression 7.9% Diabetes 6.3% High cholesterol 6.0% Seizure 3.9% Estrogens and osteoporosis 3.6% Gastrointestinal disorders 2.8% Respiratory 2.7% Insomnia 1.7%
17
specialty
Specialty drug utilization and spend Utilization of specialty medicines by our public exchange population was 17.3 percent less than our commercial population. Although specialty utilization was lower for public exchange members, this group’s specialty spend was 16.4 percent higher. The higher spend rate for public exchange members can be attributed to a higher rate of members living with severe chronic conditions, most notably hepatitis C. Sovaldi, the highest ranking drug by overall spend for the exchange population (outranking the second highest drug by 141.2 percent), cost more than $1,000 per pill in 2014. Similarly, Harvoni, the 10th highest drug by overall spend for the exchange population and one of the newest hepatitis C drugs for members in 2014, cost $1,125 per pill. Sovaldi and Harvoni account for 8.2 percent of total public exchange membership spend. The cost and use of expensive specialty drugs is rising, and there isn’t a slowing on the horizon. In total, 7.2 percent of the top 30 specialty prescriptions (by spend) filled by public exchange members cost $20,000 or more each. Comparatively, only 2.5 percent of the top 30 specialty prescriptions (by spend) filled by commercial members cost $20,000 or more each.
Specialty drugs accounted for just 0.43% of claims for our public exchange members, but they made up 28.6% of the overall drug spend.
commercial
public exchange
Top 10 specialty drugs by percent of specialty spend (Jan. 1–Dec. 31, 2014) 15.3% Humira (arthritis) 10.1% Enbrel (arthritis) 9.9% Sovaldi (hepatitis C) 5.6% Copaxone (MS) 3.7% Tecfidera (MS) 2.7% Gleevec (cancer) 2.2% Olysio (hepatitis C) 2.2% Revlimid (cancer) 2.2% Omnitrope (growth hormone) 2.1% Gilenya (MS)
1 2 3 4 5 6 7 8 9 10
Sovaldi (hepatitis C) 24.6% Humira (arthritis) 10.2% Enbrel (arthritis) 8.6% Olysio (hepatitis C) 4.9% Harvoni (hepatitis C) 4.0% Copaxone (MS) 4.0% Tecfidera (MS) 3.0% Revlimid (cancer) 2.4% Gleevec (cancer) 1.5% Xyrem (insomnia) 1.5%
Top 10 specialty drugs by percent of specialty utilization (Jan. 1–Dec. 31, 2014) Humira (arthritis) Enbrel (arthritis) Copaxone (MS) Tecfidera (MS) Omnitrope (growth hormone) Gilenya (MS) Rebif (MS) Cimzia (arthritis) Sovaldi (hepatitis C) Forteo (osteoporosis)
1 2 3 4 5 6 7 8 9 10
Humira (arthritis) Enbrel (arthritis) Sovaldi (hepatitis C) Copaxone (MS) Tecfidera (MS) Capectiabine (cancer) Gilenya (MS) Ribavirin (hepatitis C) Revlimid (cancer) Simponi (arthritis)
19
Just 0.7 percent of exchange members are living with hepatitis C or HIV. But the impact on spend is huge. Utilization and spend for hepatitis C and HIV treatments were some of the most significant differences between our public exchange and commercial membership.
small need
big cost implications What does 0.7% look like? This small circle, when compared to the large green circle.
A closer look at hepatitis C and HIV drug utilization and spend
commercial
public exchange
Hepatitis C and HIV utilization* difference
Higher utilization
Hepatitis C
0.04%
+177.5%
0.10%
As a whole, our public exchange members had more severe chronic medical conditions than our commercial members. For hepatitis C and HIV, public exchange members were nearly 2.5 times more likely to be filling
HIV
0.16%
+264.8%
0.60%
medicines for these conditions. And this higher likelihood wasn’t limited to a specific age group — members who filled hepatitis C drug prescriptions ranged in age from 6 to 68 years, and those filling HIV drug prescriptions ranged
Combined
0.20%
+248.9%
0.70%
from 3 to 78 years.
Higher spend The combined hepatitis C and HIV spend by our public exchange members was nearly 200 percent higher than spend by
Hepatitis C and HIV spend
our commercial members. Nearly $1 out of every $5 spent on drugs for public exchange
Hepatitis C
3.51%
+183.4%
9.94%
members was spent to treat hepatitis C or HIV. For our public exchange membership, hepatitis C and HIV both ranked within the top three categories for spend. For commercial members, neither even appears in the top 10.
HIV
2.78%
+217.8%
8.84%
For public exchange members, hepatitis C drugs account for just 0.1 percent of all claims, but make up 9.94 percent of total spend. This is largely driven by high-cost drugs such as Sovaldi, Harvoni and Olysio. HIV drugs made
Combined
6.29%
+198.6%
18.78%
up just 0.6 percent of the overall claim volume for public exchange members, but accounted for 8.84 percent of the total public exchange drug spend.
Highly subsidized Approximately one-third of our public exchange membership received cost-share subsidies. Of the public exchange members who filled prescriptions for hepatitis C drugs, 38 percent used benefit subsidies. For those who filled prescriptions for HIV drugs, 51 percent used benefit subsidies. *Utilization as a percent of total claims
21
In 2015, we saw a flood of new competition as more insurers offered plans through the health insurance marketplace. Despite the increased competition, our public exchange membership continued to grow.
DEFINING
the
11.7M3
8.0M
1.4M
1.95M
Prime National
2014
2015
Public exchange membership growth
Our 2015 public exchange membership growth mirrors that of the overall national health exchange membership. As the economy continues to change shape, so will the growth of the public health insurance marketplace. And as tax penalties for the uninsured take effect, we predict a steady growth of public exchange membership. This growth could accelerate if employers face adverse economic conditions, leading to an even greater influx of individuals buying insurance through the public exchanges.
Through our unique connections
Health stabilization
with our Blue Plan owners and
As we continue to serve the growing public exchange
clients, we saw a 41 percent
stabilize. In 2014, we saw heavy use of prescriptions
increase in our public exchange
population, we predict their health, as a whole, will for severe, chronic conditions such as hepatitis C and HIV. This is largely due to an underserved population
membership in 2015. This
who may not have previously qualified to buy insurance
brings our total public exchange
treatment, their health should improve and plan costs
membership to more than
employees toward public exchanges, a higher ratio
1.95 million individuals.
due to their conditions. As these people receive should decline. Additionally, as more employers shift of individuals will be enrolling. These new, healthier individuals would reduce the prevalence of serious medical conditions, increasing the future viability of the state and federal public exchanges.
23
Shifting plan-type selection
Legal uncertainties
In the first year of public health exchange purchasing,
In 2015, the public health exchanges face uncertainty
individuals overwhelmingly selected silver plans.
as portions of the ACA are again put in front of the
From our data, we know that many of these people
U.S. Supreme Court. The law has been highly debated
were seeking treatment for very serious conditions.
since its passage in 2010. This year, the validity of
As their health care needs level out, more people are
some of the language within the law will be debated.
selecting catastrophic and bronze plans. This would
The legality of the premium tax credit subsidies offered
suggest that unsubsidized public health exchange
to qualifying individuals is at stake. Should these
members are identifying another opportunity to
subsidies no longer be available, we expect substantial
save through lower premiums. Thus far, our 2015
disenrollment among the subsidized population.
enrollment has shown a 135 percent increase in
Prime supports the public health insurance marketplace
catastrophic plans and a 70 percent increase in bronze plans.
and subsidies for qualified individuals. If the law is struck down, it could mean many people needing coverage would no longer be able to afford it. As we’ve seen from our utilization data, our benefits are helping people with very serious conditions get treatment. Without an immediate contingency plan, this defeat
E XECUTIVE INSIGHT
Tom Hoffman Vice President and General Manager, Individual Market “Our work with industry partners, other PBMs, and the Centers for Medicare and Medicaid Services has helped align
would result in thousands of sick people no longer being able to pay for the insurance and medicines they need. If the subsidies are defeated, it’s critical for policymakers to work quickly to create a national alternative exchange or new state-based exchanges so people in need can continue to receive subsidies that help them pay for care.
ACA regulations with many unique aspects of pharmacy benefits. This spirit of collaboration has led to positive outcomes and a better member experience across all public exchange plans.”
in summary We expect 2015 to be yet another important year of evolution for the public health exchanges. This evolution will undoubtedly lead to more transformation and adjustments as we look to 2016 and beyond. This is Prime’s first full-year report analyzing spend, utilization and trends for our public exchange membership. Moving forward, we will gain additional insight into this population. And that knowledge will allow us to continue working together with our Blue Plan owners and clients to help people get the medicine they need to feel better and live well. 24
About Prime Therapeutics Prime helps people get the medicine they need to feel better and live well. The company manages pharmacy benefits for health plans, employers, and government programs including Medicare and Medicaid. Prime processes claims and delivers medicine to members, offering clinical services for people with complex medical conditions. Headquartered in St. Paul, Minn., Prime serves more than 26 million people. It is collectively owned by 13 Blue Cross and Blue Shield Plans, subsidiaries or affiliates of those plans. Prime has been recognized as one of the fastest-growing companies in the nation. For more information, visit PrimeTherapeutics.com or follow @Prime_PBM on Twitter.
References Healthcare.gov. (2015). How to choose marketplace insurance: Marketplace insurance categories. Retrieved from https://www.healthcare.gov/choose-a-plan/plans-categories/.
1
United States Department of Health and Human Services. (2014). Health insurance marketplace: Summary enrollment report for the initial annual open enrollment period. Retrieved from http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Apr2014/ib_2014apr_enrollment.pdf.
2
Armour, S. Affordable Care Act enrollment near 11.7 million. (2015, March 9). The Wall Street Journal. Retrieved from http://www.wsj.com/articles/affordable-care-act-enrollment-near-11-7-million-1425930343.
3
All brand names are the property of their respective owner.
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