2020 Medicaid Pharmacy Trend Report

PRIME

THER APEUTIC S

TABLE OF CONTENTS

02

Introduction

06

Medicaid Fee-forService Trends

24

Pipeline and Forecasting

EDITORIAL STAFF Stephanie Stevens, MPH Director, Research and Publications

CONTRIBUTORS

03

Key Trends and Insights

09

Class and Drug Trends

25

Methodology

Meredith Delk, Ph.D., MSW Senior Vice President, General Manager, Government Affairs Douglas Brown, R.Ph., MBA Consultant, Government Markets Christopher Andrews, Pharm.D. Vice President, Value-Based Purchasing

04

Medicaid Pharmacy Economics

11

Key Therapeutic Classes

by Net Dollar Impact

26

Glossary

Troy Phelps Senior Director, Analytics

© 2020 Magellan Rx Management LLC. Magellan Rx Management 2020 Medicaid Trend Report™ 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 Trend Report™, Fifth Edition, © 2020. Used with permission.”

1 MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2020

INTRODUCTION Magellan Rx Management is pleased to present the fifth edition of the Magellan Rx Management Medicaid Pharmacy Trend Report, the industry’s leading report exclusively detailing trends in the Medicaid pharmacy fee-for-service (FFS) space and the only detailed source examining Medicaid FFS gross and net drug spend trends.* In 2019, as in prior years, we saw state legislatures struggle to balance the growing cost of state Medicaid programs with state budget projections. Across the country, states expanded authority for state Medicaid agencies to negotiate additional discounts with manufacturers for high-cost drugs, increased the use of clinical criteria, furthered the reach of preferred drug list programs, and took steps to introduce the use of outcomes-based contracting. tates a so ontin e to move t e arma ene t rom e i ai mana e are or ani ations (MCOs) back to Medicaid fee-for-service (FFS) to take advantage of lucrative federal and supplemental re ate ro rams ome se r ti i ation revie oar s an arma an t era e ti s ommittees to evera e ini a evi en e an nan ia in ormation in o es o o erin state costs for the most expensive Medicaid covered drugs.

The four-year FFS trend clearly illustrates the variability in the Medicaid program and the inherent challenges states faced. The trend continued to grow after hitting its lowest point in 2017 (see figure 1). Specialty growth continued to drive this increasing trend and is rapidly approaching a forecast we ave ma e sin e t e rst e ition o t is re ort in t at s e ia t r s i a o nt or o net r s en in e i ai n s e ia t a o nte or o net s en ie ma in st o ti i ation

ear over ear in rease o an res e tive at tren ontin e into ear it a rst arter in rease o ort nate t e a an e o t e arters tren e in sin e i its to bring down the trend for 2019. tates ontin e to e ore an im ement efforts to o nter a an e t e in reasin ost o s e ia t drugs with unique payment models such as subscription- and outcomes-based contracting. While still early in their life cycle, these models are critical for states that want to move the conversation from volume to value.

One area of consistency in Medicaid FFS was the Top 5 drug classes, which remained the same yearover ear A an anti s oti s a o nte or more t an o tota net s en an t e o asses a o nte or a most see figure 2).

As t e e i ai arma ren e ort t rns ve an t e e i ai res ri tion r an s a e continues to evolve, we strive to keep you ahead of the trends and challenges in the Medicaid FFS space. In this report, our now-standard in-depth analysis of the top drug classes has expanded to in e an a itiona si ate ories an etai a etter i t re o asses it a si ni ant net o ar impact. As usual, we have included a forecast of Medicaid FFS trend as well as pipeline updates.

Aligning with the increased trend, as noted in our annual webinar last year, we have kept an eye on a micro-trend emerging in third- and fourth-quarter specialty net cost per claim data, which showed a

Thank you for your continued interest in the Medicaid Pharmacy Trend Report. We will continue to bring you these important trends to drive conversations and uncover strategic opportunities to better manage Medicaid pharmacy programs in the coming years.

FIGURE 1: 4-YEAR NET COST PER CLAIM TREND

FIGURE 2: TOP 5 CLASSES BY NET SPEND 2019

Traditional

Specialty

Overall Trend

HIV/AIDS Antipsychotics Hemophilia Treatment Anticonvulsants Stimulants and Related Agents Other

12.3% 8.4% 0

0

7.5%

20.5% 1.9% -5.1%

4.6% -4.4% -9.7%

6.1% 0.8% -2.6%

8.6% 4.3% -0.4%

2016

2017

2018

2019

60.9%

6.0%

4.9%

Please note: COVID-19 did not impact these data, as this report covers 2018-2019 trends.

*

2020 / MAGELLANRX.COM/TRENDREPORT

2

KEY TRENDS AND INSIGHTS Overall Trends

Traditional vs. Specialty Impact

FIGURE : 2019 TREND IN NET SPEND

Claim volume ratio remains virtually unchanged while total net spend on specialty drugs increased by 2.4%. Specialty drugs will account for 50% of the total net drug spend in Medicaid by 2020.

4.3%

FIGURE 6: TOTAL NET COST

FIGURE 5: CLAIM VOLUME

Overall Trend

Traditional

-0.4%

8.6%

Traditional Trend

Specialty Trend

Specialty

Traditional

1.3%

Specialty

1.3% 48.5%

46.1%

-0.10

-2.0%

Cost Trend

Utilization Trend

$

141.12

-0.9%

Cost Trend

Utilization Trend

$

FIGURE 4: O ERALL COST TREND 201 -2019 2018

2019

2018

2019

9 .7%

9 .7%

2018 5 .9%

FIGURE 7: TRADITIONAL COST TREND

% Change

2018

2019

2019 51.5%

FIGURE : SPECIALTY COST TREND

% Change

2018

2019

% Change

5.4%

3.7% 3.7%

117.57

3,631.62

$

$

71.26

$

113.36

$

4.3%

8.6%

3,445.12

$

69.92

$

1 7 1.90

47.77

$

$

-0.4%

1,640.78

$

45.81

$

25.02

$

Gross Cost per Claim

Net Cost per Claim

3 MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2020

Gross Cost per Claim

24.92

$

Net Cost per Claim

Gross Cost per Claim

Net Cost per Claim

MEDICAID PHARMACY ECONOMICS The Medicaid pharmacy pricing landscape has remained largely n an e over t e ve ears a e an as ro e t is report. The basic tenet of the program is the same — manufacturers a ree to a ase or e era re ate in e an e or man ator pharmacy coverage for their products by states that provide the e i ai arma ene t rrent a states an t e istri t o Columbia). Through this agreement with the Centers for Medicare & Medicaid Services (CMS), manufacturers gain “payable” status everywhere. Medicaid rules permit individual states or a group of states to contract additional (or “supplemental”) rebates to further reduce the net cost of pharmaceuticals. These ontra ts are rote te e i ai s est ri e e em tion e arma ene t is in e in t e e era e i a Assistan e er enta e A so states s are s ementa rebates, as they do federal rebates, with the federal government. e ot er re ate a tor in t e e ation t e re ate offset amo nt A ontin es to o entire to t e e era government and constitutes a small portion (roughly 2.5%) of the federal rebate. In 2019, the average total discount was 59.4% (54.6% federal and 4.8% supplemental).

In 2019, the CMS continued to implement technical revisions to the rebate calculation to address the unintended consequences o t e Affor a e are A t A A an a e is te ni a change was recommended by the Medicaid and CHIP Payment and Access Commission (MACPAC). In 2018, the president’s budget an e t e re ate offset amo nt a ation in or er to ari t e im a t on ine e tension r s e et an e t e blended average manufacturer price (AMP) calculation to remove any authorized generic’s AMP from the brand AMP calculation, effe tive restorin A to re a t ori e eneri eve s on ran e r s is move ene te e i ai ro rams e a se federal rebates are proportional to AMP; therefore, increased AMP results in increased federal rebates. Multisource brands saw the esire effe t in t e o rt arter re ate e as man federal rebates returned to pre-generic-launch levels. Going into more states ma ta e a vanta e o ran s it si ni ant

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 e om etitive t e man a t rer o t e ne ran i offer an additional discount — 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 thus 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 discount increases (see figure 9).

utilization and a lower net cost than their generic equivalents.

While Medicaid programs must reimburse for utilization of these covered products, they still incorporate many utilization mana ement too s mana e are or ani ations s se to drive prescription use according to product preferred drug list stat ses A on it t e ene t o t e est ri e e em tion these tools help Medicaid programs successfully manage the arma ene t to t e o est net ost ossi e ossi t e i est an e to e i ai arma over t e ast ve ears is states ta e o t e sin e or ni e ro ram mo e Ten of 26 states included in this report have implemented the sin e ro ram mo e t ree in a one an t ere i be more in 2020 and 2021. The economics that ensure that state Medicaid programs pay the lowest net cost available combined with the favorable ACA allowance for collection of federal and (under prescribed conditions) supplemental rebates for Medicaid ti i ation ma e t e sin e tren i e to ontin e

As t e atent e iration a roa es t e man a t rer generally increases the cost of the drug and the Consumer ri e n e or r an ons mers ena t a e erates the growth of the federal rebate in the quarters just prior to that event.

Key Points in Medicaid Economics » s » »

FIGURE 9: MEDICAID P ARMACY ECONOMICS

o est net ost is a ate net o e era ementa an offset re ates

o not ase s lowest net cost.

ementa re ates at t e e

Br

Drug Pr e

Ge er Drug Pr e

ense o

ran r s an e ess e ensive t an t eir eneri equivalents and can save states millions of dollars.

The Economics To understand Medicaid economics at the drug level, assume pharmacy reimbursement, wholesale acquisition cost (WAC), and AMP are all the same. 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

State Net Drug C s

$100.00

Su

$50.00

e e Re e

State Net Drug C s

$23.10

Br

Fe er

Re

e

Re

e

2020 / MAGELLANRX.COM/TRENDREPORT

4

(Greater of 23.1% AMP or AMP est ri e ena t

e r Introduction

Time

P e Ge er

Ge er A

Fe er

ena t

E r I r u

FIGURE 10: BRAND AND GENERIC NET COST PER CLAIM Brand

o

Generic Ge er s -e e

50K 150

50K 1 0

50K 115

50K 100

50K 85K

e es e er r

50K 45K

Brand Two-Year Average: $400K

50K 35K

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Q1

Q2

Q3

Q4

Q1

Q2

201

Ge er

Q3

Generic Two-Year Average: $685K

50K 25K

$ $

Q4

2019

I

At atent e iration ommer ia ans e ome t e a n o a generic as an opportunity to lower reimbursement and overall drug cost. In Medicaid, generic launches require careful thought an nan ia eva ation Generi s t i a enter t e mar et at a discounted price point relative to the brand’s full price but with a federal rebate at only 13% of AMP. The net cost of a brand drug can be markedly less than the generic at this time (see figure 10 a tors affe tin t e avai a i it o t is ne eneri an a se t e net ost o t e eneri to remain re ative i or as on as si mont s to

Me

F re s

multiple years. In 2019, brand-over-generic programs accounted for $320 million in savings for states included in this report, with an average of $70 saved per claim.

Ge er U

e i ai ee or servi e ro rams most o ten re orte o er eneri ti i ation rates t an e i ai or ot er ommer ia programs due to the federal rebate’s impact on the net cost of brand drugs compared to their generic equivalents. The CMS calculation

g their probability of being nonadherent to chronic medications in order to improve patient outcomes. Medicaid forecasting data can be found on

At is

atient

enti

ation

r

r

ost

ost

ore astin

an

a e

rovi es

re ative

ore astin

re i t s o s t e overa at rom

t en o

ross tren is e

e rom

to

figure 12

strati es in ivi

atient a

enti

atients

ation

ase

on

e ates

i

ontin e to e

85.7%

85.5%

85.4%

85.3%

5.9%

85.8%

6.1%

Q2

Q3

Q4

Q1

Q2

Q3

Q4

201

offset in reasin

Gross

r

ri es

11 . 6

$

tren s

5 MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2020

121.1

$

125.62

$

1 4.25

$

47.77

$

2019

2020

$

48.76

2.2%

2.7%

2.1%

4.3% 45. 1

i not im a t t is ata as t is re ort overs

117.57

$

6.9%

3.7%

.1%

t

2018

ease note

2019

et et

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

*

eneri

Q1

e to ne

groundbreaking therapies and specialty drugs entering the market (see

t re tren s At is

i enti es an

ran an

84.8%

3.7%

a tors

roa tive

assi

FIGURE 11: GENERIC UTILI ATION RATE

e te to sta

macro-predictions on drug spend and trend, as well as the rivin t ose

ires states to

FIGURE 12: MEDICAID FORECASTING

i enti es atients at ris o e

ifferent mo e s are avai a e

re

Two-Year Average: 85.6%

erien in

o

ien

R e

adverse events and forecasts future drug-cost drivers for customers.

re i t roa tive

eneri e

drugs not by their formal label name but by their CMS drug class indicator: single-source, innovator multisource, or non-innovator m tiso r e e im a t to is si ni ant e a se a t ori e generics (AGs) that have a non-innovator multisource (generic) label name pay an innovator multisource (brand) federal rebate and t s et o nte as ran r s t e ver an states avera e an effe tive eneri is ensin rate G en e ne as r s t at o not ave a ro rietar r name and where AGs count as generic even though they pay a brand CMS rebate. Consideration of brand-over-generic use pushes this re even i er see figure 11).

$

50.06

$

2021

2022

51.1

MEDICAID FEE-FOR-SER ICE TRENDS Fe er

Re

eU

e

O er

2019 saw a 1% decrease, from 55.6% to 54.6%, in the aggregate federal rebate er enta e in sive o t e re ate offset amo nt a s ar ontrast to s increase. This decline, driven by new specialty drugs and a growth in specialty net s en as si ni ant offset a orres on in rise in s ementa re ates good news for states. On closer inspection, the federal rebate on traditional drugs increased 1% while the federal rebate on specialty drugs decreased 3.6%, from to onsi erin t at ne to mar et r s start it a e era re ate of 23.1% of AMP, higher utilization of newer products is pulling down the average specialty federal rebate.

Drug C s Tre

s

sa an overa in rease in ot ross an net ost er aim As in t e growing cost of specialty drugs was the primary contributor to the rising net trend we see in t is ear s re ort

FIGURE 14: GROSS COST PER CLAIM 2019

ementa re ates as a er ent o ross s en ere ear over ear to riven a se e t ro o i ti i e s e ia t ran r s vera total discounts, net of federal, supplemental, and ROA, were down 0.2% year over year. The average federal rebate can subdivide as either specialty and traditional r s or ran an eneri r s see figure 1

an e

4.9% 1.9%

115.54 11 . 5

4.5%

.6%

117.10 11 .00

119.6 114.0

11 .11 11 .06

.7%

117.57 11 . 6

$

$

$

$

$

$

$

$

$

$

FIGURE 1 : FEDERAL REBATE PERCENTAGE BY SEGMENT

Q1

Q2

Q3

Q4

Weighted Average

FIGURE 15: NET COST PER CLAIM Brand 65.4%

Specialty 48.1%

Federal Rebate* 55.6%

2019

Br 6 .7%

Traditional 60.4%

S e 44.5%

Federal Re e 54.6%

Tr

an e

7. % .4%

61.4%

4. %

4.2% 2. %

Generic 11.1%

Ge er 11.1%

2019

46.10 45.0

49.47 46.10

4 .16 46.59

47.77 45. 1

$

$

$

$

$

$

$

$

$

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

47.45 45.5

$

Q2

Q3

Q4

Weighted Average

2020 / MAGELLANRX.COM/TRENDREPORT

6

Tr

Drug C s Tre

s

S e

Drug C s Tre

s

Traditional drug trend continued its decline for the fourth consecutive year, but, with a net ost er aim tren o st it is itt e an e sin e i e tra itiona r s sti a o nt or o ti i ation t at annot o nter ei t s e ia t r s en s im a t on t e overa r tren

ost not ti i ation rove s e ia t tren in i in rease i e ti i ation e ine a mo est net ost er aim in rease an ti i ation e ine

FIGURE 16: GROSS COST PER CLAIM

FIGURE 1 : GROSS COST PER CLAIM

2019

an e

2019

6.1% 1.9%

2.1%

-0.7%

70.17 70.69

71.45 69.51

72. 0 70.26

70.6 69.21

71.26 69.92

$

$

$

$

$

$

$

$

$

$

$

Q2

Q3

Q4

Weighted Average

FIGURE 17: NET COST PER CLAIM 2019

554.12 54.09

4.9%

4.7%

6.0%

$

Q1

an e

.6%

2. %

$ $

60 .64 442.99

Q1

$ $

Q2

6 7.6 46 .62

5.4%

$ $

Q3

2019

Weighted Average

an e

26.15 24.94

24.26 24.70

24.92 25.02

1 716.09 1 5 6. 1

.0%

7.6%

11.7%

-0.4%

-1. %

1 742.12 1 61 .4

1 00.94 1 667.74

.6%

1 71.27 1 74 .22

1 7 1.90 1 640.7

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Q1

Q2

6 1.62 445.12

7.0%

1.1%

25.26 24.99

$ $

Q4

4.9%

24.06 25.44

7 5.11 521.60

FIGURE 19: NET COST PER CLAIM

an e

-5.4%

sa net ost er or om arison

Q3

Q4

7 MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2020

Weighted Average

Q1

Q2

Q3

Q4

Weighted Average

aim sa

MEDICAID FEE-FOR-SER ICE TRENDS Br

Drug C s Tre

s

Ge er

sa a ear over ear in rease in ot ross an net ost er aim or ran r s it ne s e ia t ran r s s as i tarv em i ra an i io e rivin tren

FIGURE 20: GROSS COST PER CLAIM 2019

Drug C s Tre

2019 saw a decrease in both gross and net cost per claim for generic drugs.

FIGURE 22: GROSS COST PER CLAIM

an e

2019

9. %

7.5%

5. %

an e

-5.9%

7.5%

1. % -1. %

7.1%

65 .66 610.29

6 6.

649.1

s

696.15 647.56

701.

6 9.00

6 .69 6 5.76

22.92 24. 7

2 .5 2 .

-1.0%

1.9%

24.25 2 . 2

2 .69 2 .25

2 .60 2 .

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Q1

Q2

Q3

Q4

Weighted Average

FIGURE 21: NET COST PER CLAIM 2019

Q1

Q2

Q3

Q4

Weighted Average

FIGURE 2 : NET COST PER CLAIM

an e

2019

12. %

1.6%

-5.9%

.1%

9. %

an e

-1. %

10. %

2. %

-0.9%

11.1

%

196.55 176.92

209.95 192.14

219.06 194.19

21 .99 197.97

209.55 1 9.96

20.21 21.47

20.77 21.16

21.41 21.06

21. 2 20.74

20.92 21.11

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Q1

Q2

Q3

Q4

Weighted Average

Q1

Q2

Q3

Q4

Weighted Average

2020 / MAGELLANRX.COM/TRENDREPORT

8

CLASS AND DRUG TRENDS In 2019, overall net cost per claim increased by $1.96, or 4.3%, from $45.81 to $47.77. In the following sections, we examine the impact of therapeutic classes and their individual drugs that contributed most to that increase.

Therapeutic Class Net Dollar Impact

Drug Ne S e

Of the Top 5 classes by net spend, HIV/AIDS was the only one to also have a positive dollar im a t on t e e i ai ene t see figure 24). Conversely, stimulants and related agents were t e t i est s en ass t a t e most ne ative o ar im a t on t e e i ai ene t in t e tota net ost o n an ontri tin to t e ne ative tren in tra itiona net s en see figure 25).

Some of the top traditional and specialty drugs account for large majorities of their class’s net s en n tra itiona a a entin a o nts or o tota net s en in ne ro at i ain see figure 26). In specialty, Mavyret accounts for more than half of total net spend in hepatitis C, at 62%, and Ibrance takes almost three quarters of spend in oncology, oral — breast, at 71% see figure 27).

FIGURE 24: 2019 TOP 5 CLASSES INCREASING TOTAL NET SPEND BY DOLLAR IMPACT

FIGURE 26: 2019 TOP 10 TRADITIONAL DRUGS BY PERCENT OF CLASS TOTAL NET SPEND

Traditional

Specialty

Traditional

I

Specialty

0.42

$

0.32

42.5%

$

0.26

$

HIV/AIDS

sti

i rosis

ra

Cytokine and CAM Antagonists

0.25

$

Glucocorticoids, Inhaled

0.22

$

Bronchodilators, eta A onists

FIGURE 25: 2019 TOP 5 CLASSES DECREASING TOTAL NET SPEND BY DOLLAR IMPACT Traditional Stimulants and Related Agents

.5%

Specialty Analgesics, Narcotics Short

0.10

$-

Contraceptives, Oral

0.08

$-

0.19

$-

0.41

$-

9 MAGELLAN RX MEDICAID PHARMACY TREND REPORT / 2020

11.1% Vraylar ra

.7%

.7%

9.2

10. %

Latuda ra

Rexulti ra

Abilify aintena

Vimpat a et ra

1 . %

16. %

Methylphenidate Vyvanse on erta a s e ra ra

19%

Invega stenna

o one i m

Gabapentin a s e ra

FIGURE 27: 2019 TOP 10 SPECIALTY DRUGS BY PERCENT OF CLASS TOTAL NET SPEND Traditional

Hepatitis C Agents

%

Specialty

70.9% 62.0%

Multiple Sclerosis Agents

0.06

$-

12. %

1 .4%

14.4%

Triumeq ra

Advate

Hemlibra

16.2%

16.5%

Eloctate

Genvoya ra

27. %

29.0%

Biktarvy ra

Orkambi Tablet ra

.7%

Symdeko ra

Mavyret ra

Ibrance Capsule ra

Drug Ne D

rI

n tra itiona t e o orti oi s in a e r A vair is s a t e i est net o ar im a t see figure 2 Anti s oti s a t ree r s in t e to an a t e sevent i est im a t on tota net s en a ross a asses see ge 14 n s e ia t t e A r i tarv a t e i est o ar im a t at t i e t e amo nt o t e ne t i est im a t r em i ra see figure 29). Conversely, t e r s e reasin t e o ar im a t ere a so rom t ese t o asses it Genvo a im a tin tota net s en an A era re in tota net s en see figures 0 1).

FIGURE 2 : 2019 TOP 10 TRADITIONAL DRUGS INCREASING IN IMPACT

0.25

$

Advair is s

0.19

$

Vraylar ra

0.1

$

Proventil A

0.14

$

Lidotral o i a

0.11

$

Concerta ra

$

0.08

$

0.08

Humalog ia

Peg 3350 Powder Pack OTC ra

FIGURE 0: 2019 TOP 10 TRADITIONAL DRUGS DECREASING IN IMPACT

Adderall ra

0.05

$

Epinephrine 0.3 Mg i en

0.05

Suboxone im

0.04

$

$

Abilify aintena

Invega stenna

0.16

$-

et et PEG 3350 phenidate ER phenidate ER Powder Pack on erta on erta AG ra ra ra

0.10

$-

0.10

$-

Humalog en

Strattera ra

0.07

$-

$-

0.08

$-

0.06

Nexium ra

Pulmicort 0.25, 0.5 mg es es

0.06

$-

0.05

$-

Mavyret ra

Triumeq ra

0.11

$-

$-

Lyrica Capsule ra

0.05

0.28

$-

FIGURE 29: 2019 TOP 10 SPECIALTY DRUGS INCREASING IN IMPACT

FIGURE 1: 2019 TOP 10 SPECIALTY DRUGS DECREASING IN IMPACT

1.19

$

0. 9

$

0. 9

$

0.28

$

Biktarvy ra

Hemlibra

Epidiolex ra

Symdeko ra

0.23

$

Symtuza ra

Genvoya ra

0.16

$

$

0.14

$

$

0.1

$

Dupixent

Orkambi Packet ra

Zolgensma

Ingrezza ra

Trikafta ra

0.14

0.1 0.25

$-

Orkambi Tablet ra

0.23

$-

n

a et ra

0.16

$-

Advate

Spinraza

0.16

$-

$-

0.15

n

s ension ra

0.1

$-

Harvoni a et ra

0.12

$-

Descovy ra

0.12

$-

$-

2020 / MAGELLANRX.COM/TRENDREPORT

0.11

10

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

HIV/AIDS

Cystic Fibrosis, Oral Net Dollar Impact $0.42

$33.9M

5.4%

Net Spend Trend

Total Net Spend Trend

-10.2%

Claim Volume Trend

Net Dollar Impact $0.32

17.5%

$32.5M

Net Cost Per Claim Trend

21.5%

Net Spend Trend

17.8%

Total Net Spend Trend

Claim Volume Trend

3.1%

Net Cost Per Claim Trend

Class Summary

Class Summary

HIV antiretrovirals remained the No. 1 net spend class in 2019. This class was also the No. 1 positive trend driver. With less than two years on the market, Biktarvy has quickly become the No. 1 net spend product in Medicaid. Utilization of Biktarvy drew from other Gilead products such as Genvoya, the No. 1 negative trend driver; Descovy, the No. 7 negative trend driver; products containing tenofovir disoproxil fumarate; and even Triumeq (No. 9) and Tivicay (No. 10).

This class was the No. 2 positive trend driver due to an 18% increase in utilization, moving from the No. 7 net spend class in 2018 to No. 6 in 2019.

FIGURE 33: MARKET SHARE AND NET DOLLAR IMPACT FIGURE 32: MARKET SHARE AND NET DOLLAR IMPACT Biktarvy (Oral) Tivicay (Oral) Triumeq (Oral)

Genvoya (Oral) Descovy (Oral) Other

Market Share

MARKET

Net Dollar Impact Change

4.0% 12.6%

Symdeko (Oral) Orkambi Tablet (Oral) Kalydeco Tablet (Oral) Orkambi Packet (Oral) Trikafta (Oral) Other

Biktarvy was not only the No. 1 net spend product but also the No. 1 positive trend driver. This class contained three of the Top 5 net spend products and was the No. 1 positive trend driver.

16.5%

Market Share

Net Dollar Impact Change

11.0%

10.8%

9.7%

9.5%

9.0%

0.28

$

MARKET

BRAND

Symtuza, the No. 5 positive trend driver, rose from the No. 253 net spend product in 2018 to No. 27 in 2019 despite the inclusion of a protease inhibitor instead of an integrase inhibitor.

1.19

$

8.9

%

0.14

$

55.6%

30.8%

0

-0.25

Symdeko was the No. 4 positive trend driver, advancing from the No. 23 net spend product in 2018 to No. 7 in 2019. These increases made the class the No. 2 positive trend driver in 2019.

0.13

$

0.01

$

$

52.2%

44.9%

-0.09 $-0.12 $

-0.11

$

-0.21

$

2018

2019

Trikafta was introduced to the market in 2019 and became the No. 76 net spend product. This pathway is similar to the other products in this class — utilization and net spend grow quickly.

20.1% 33.2%

10.9%

MARKET

CLINICAL

Dual-combination single-tablet regimens containing integrase in i itors i not i si ni ant market share, amounting to just 1% of all utilization in this class in 2019.

2019

11 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

0

13.3% 10.7

%

17.2% 2.2

%

4.9% 2018

-0.23

$

7.7% 4.3% 2019

-0.01

$

2019

CLINICAL

Most investigational candidates in this class are not beyond phase two in clinical trials; therefore, market competition will not drive down net costs.

Cytokine and CAM Antagonists

Glucocorticoids, Inhaled Net Dollar Impact $0.26

$27.3M

36.4%

Net Spend Trend

Total Net Spend Trend

13.0%

Claim Volume Trend

Net Dollar Impact $0.25

20.7%

$27.7M

Net Cost Per Claim Trend

261.7%

Net Spend Trend

-3.2%

Total Net Spend Trend

Claim Volume Trend

273.7%

Net Cost Per Claim Trend

Class Summary

Class Summary

This class rose from the No. 10 net spend class in 2018 to No. 9 in 2019.

This class jumped from the No. 85 net spend class in 2018 to No. 28 in 2019, largely due to a temporary increase in Advair Diskus net spend. Although patent expirations on inhalers are occurring, federal rebates are still valuable as they keep brands inexpensive relative to new generic equivalents.

FIGURE 34: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 35: MARKET SHARE AND NET DOLLAR IMPACT

Humira Pen Kit (INJ) Enbrel Pen (INJ) Humira Kit (INJ) Cosentyx Pen Injecter (SQ) Otezla (Oral) Other

Market Share

Net Dollar Impact Change

MARKET

Flovent Hfa (INH) Symbicort (INH) Advair Diskus (INH) Dulera (INH) Pulmicort 0.25, 0.5 Mg Respules (INH)

Year-over-year, TNF-alpha inhibitors account for less market share than in the previous year as more products with other mechanisms of action came to the market. In 2019, this market share was 72%.

Other

Net Dollar Impact Change

Market Share

MARKET

This class experienced a 274% increase in net spend in 2019, mostly realized prior to the change in the AMP calculation that determines federal rebate amounts for products. It was the No. 4 positive trend driver.

0.02

$

0.02

$

42.5

%

14.4% 9.8% 3.7% 3.7%

25.9%

Stelara, the No. 16 positive trend driver, rose from the No. 64 net spend product in 2018 to No. 32 in 2019 despite wide non-preferred status. This trend impact came primarily from increased utilization as opposed to an increase in net spend per prescription.

41.9

11.6% 8.5%

BRAND

Advair Diskus was the No. 5 positive trend driver and rose to the No. 39 net spend product in 2019. For three quarters, it had the advantage of being under the old AMP calculation method, wherein federal rebates were substantially suppressed.

36.4% 0.25

$

19.5% 22.4%

0.23 19.1%

5.5% 3.9%

CLINICAL

28.6%

2019

31.5%

$

-0.01 2019

$

2018

BRAND

%

0

Utilization of these products grew steadily in 2019, accounting for the class ranking as the No. 3 positive trend driver.

Utilization increased 13% while net spend grew by 21%.

CLINICAL

14.6% 5.7% 6.6%

5.4% 5.1%

0.08

$

-.01 -.01

$ $

17.6%

16.1

$

2018

2019

2019

%

-0.05

0

The authorized generic for Advair Diskus accounted for only 13% of the utilization between it and the brand equivalent combined in 2019 due to the ifferen e in t eir net ri es is as e to anticipation of the AMP calculation change.

2020 / MAGELLANRX.COM/TRENDREPORT

12

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Bronchodilators, Beta-Agonist

Immunomodulators, Atopic Dermatitis Net Dollar Impact $0.22

$24.4M

90.8%

Net Spend Trend

Total Net Spend Trend

-4.6%

Claim Volume Trend

Net Dollar Impact $0.20

100.0%

$22.1M

Net Cost Per Claim Trend

150%

Net Spend Trend

Total Net Spend Trend

18.8%

Claim Volume Trend

110.4%

Net Cost Per Claim Trend

Class Summary

Class Summary

As in glucocorticoids, inhaled, this class experienced a brief increase in net spend prior to the im ementation o t e A a ation an e t at too effe t t ese asses are tie to et er in t at t ations in e era re ates an ave a ar e nan ia im a t in t ese high-volume classes.

Plenty of attention is expected for this class in coming years as the market sees injectable and oral o tions t at aim in rease e a t ome it si ni ant i er net osts

FIGURE 36: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 37: MARKET SHARE AND NET DOLLAR IMPACT

ProAir HFA (INH) Proventil HFA (INH) Albuterol Neb Soln 2.5 Mg/3 Ml (INH) Albuterol Neb Soln 0.63, 1.25 Mg (INH) Ventolin HFA (INH) Other

Market Share

Net Dollar Impact Change

MARKET

Eucrisa (TOP) Protopic (TOP)

Elidel (TOP) Dupixent (SQ) Tacrolimus (TOP) Other

MARKET

This class experienced a 100% increase in net spend in 2019, mostly realized prior to the AMP calculation change that determines federal rebate amounts for products. It rose from the No. 37 net spend class in 2018 to No. 17 in 2019 and was the No. 5 positive trend driver.

Market Share

Net Dollar Impact Change

This class was the No. 6 positive trend driver and increased its net spend rank from No. 73 in 2018 to No. 29 in 2019; net spend increased 110% with an increase in utilization of 19%.

0.01

$

0.03

$

BRAND 51.8%

53.2%

0.18

$

The fact that Proventil HFA was the No. 8 positive trend driver illustrates the impact that the AMP calculation change had on net prices in Medicaid. It was the No. 41 net spend product in 2019, up from No. 796.

41.9%

44.5%

BRAND

Dupixent was the No. 9 positive trend driver, rising from the No. 136 net spend product of 2018 to No. 33 in 2019. Its utilization increased nearly 200%.

26.4%

18.8

21.9

%

%

MARKET 2.5%

18.2%

18.7

%

3.2% 2018

1.9% 2.4% 2.0%

0.01

$

0.03

$

5.4% 2019

In 2019, all three authorized generics for albuterol HFA brands accounted for less than 5% of all brand and generic a tero A ti i ation e to t e ifferen e in their net prices. This was due to anticipation of the AMP calculation change.

2019

13 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

0.16

$

36.5%

CLINICAL

Eucrisa was the leading market-share product in 2019, with a prescription total equal to that of all calcineurin formulations combined. The net spend for Eucrisa was still well under half that for Dupixent.

14.2% 5.7% 8.7%

2.2% 2.4%

2018

9.3% 2.8% 5.4% 2019

2019

Antipsychotics

Hemophilia Treatment Net Dollar Impact $0.18

$11.9M

2.8%

Net Spend Trend

-.09%

Total Net Spend Trend

Claim Volume Trend

Net Dollar Impact $0.16

3.7%

$10.5M

Net Cost Per Claim Trend

2.7%

Net Spend Trend

Total Net Spend Trend

7.7%

Claim Volume Trend

-4.7%

Net Cost Per Claim Trend

Class Summary

Class Summary

Antipsychotics remained the No. 2 net spend class in 2019. Although utilization decreased slightly, the increase in net spend per prescription more than compensated for the increased net spend relative to 2018. This class was the No. 7 positive trend driver on the strength of a 3.7% increase in net spend. In this class, utilization of longtime generics can also be a contributor to trend: The combined utilization of paliperidone and chlorpromazine was responsible for 8% of the class net spend.

As in 2018, hemophilia was the No. 3 net spend class in 2019. This class was the No. 8 positive trend driver. If the success of Hemlibra is any indication, new non-factor products to the market will continue to push net spend higher in hemophilia treatment.

FIGURE 38: MARKET SHARE AND NET DOLLAR IMPACT Quetiapine (Oral) Aripiprazole (Oral) Risperidone (Oral) Olanzapine (Oral) Latuda (Oral) Other

Market Share

23.6%

16.7%

Hemlibra (SQ) Adynovate (IV)

Advate (IV) Eloctate (IV) Idelvion (IV) Other

BRAND

Net Dollar Impact Change

Vraylar’s market share increased from 0.9% in 2018 to 1.6% in 2019 despite largely non-preferred status across states included in the analysis. It also had $0.19 impact on the drug trend, the largest contributor in the class.

Market Share

Net Dollar Impact Change

MARKET

17.4%

Latuda, Rexulti, and Vraylar utilization accounted for 8% of market share but 29% of net spend in the class.

0.27

15.2%

8.9

9.1

5.3

5.5

%

17.3%

15.8%

29.3%

2018

2019

-0.04

$

-0.04

$

2019

CLINICAL

Hemlibra, the monoclonal antibody used as prophylaxis, was the No. 8 net spend product in 2019, up from No. 74 in 2018, and the No. 2 positive trend driver.

16.3% 6.7% 4.4%

13.4% 6.6%

%

0

BRAND

0.39

$

0.02 0.05

$ $

%

29.6%

This class contained three of the top 10 net spend products in 2019: Eloctate (No. 6), Hemlibra (No. 8), and Advate (No. 9).

However, Advate was also the No. 5 negative trend driver.

3.4%

5.2% %

MARKET

21.3%

23.5%

$

15.9%

FIGURE 39: MARKET SHARE AND NET DOLLAR IMPACT

-0.16

0

$

47.9%

Utilization of long-acting injectables accounted for only about 4% of market share but 39% of net spend in the class.

41.7% -0.06

$

-0.07

$

2018

2019

CLINICAL

Valoctocogene roxaparvovec is under A revie in an o e t e rst gene therapy approved in this class.

2019

2020 / MAGELLANRX.COM/TRENDREPORT

14

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Anticonvulsants

Movement Disorders Net Dollar Impact $0.16

$12.1M

4.0%

Net Spend Trend

-3.9%

Total Net Spend Trend

Claim Volume Trend

Net Dollar Impact $0.16

8.2%

$17M

Net Cost Per Claim Trend

63.7%

Net Spend Trend

65.4%

Total Net Spend Trend

Claim Volume Trend

-1.0%

Net Cost Per Claim Trend

Class Summary

Class Summary

Hidden in anticonvulsants’ move from the No. 5 net spend class in 2018 to No. 4 in 2019 was the nan ia im a t o i io e n its rst ear on t e mar et it ro ete to t e o net ost product. The net spend for anticonvulsants increased 8% from 2018 to 2019.

ti i ation in t is ass ontin es to ro e onentia ear over ear i is re e te in a net s en metri s ese r s are ommon se to treat t e si e effe ts asso iate it r s used to treat certain types of mental illness. Given the number of antipsychotic claims dispensed in Medicaid, there is plenty of room for continued growth.

FIGURE 40: SPEND AND UTILIZATION TRENDS

FIGURE 41: SPEND AND UTILIZATION TRENDS

Lamotrigine (Oral) Topiramate (Oral) Divalproex (Oral)

Clonazepam (Oral) Levetiracetam (Oral) Other

Market Share

BRAND

Net Dollar Impact Change

14.3%

14.7%

15.6%

14.5%

e eneri s or n orm ations rovi e si ni ant savin s a o t $23 million —for states in 2019 as utilization converted to the less expensive versions.

Generics for the tablet and suspension were the No. 4 and No. 8 negative trend drivers, respectively.

Ingrezza (Oral) Austedo (Oral) Tetrabenazine (Oral) Xenazine (Oral) Ingrezza Initiation Pack (Oral)

Market Share

MARKET

Net Dollar Impact Change

BRAND

11.7%

11.6%

8.7%

9.0%

7.1

7.1%

%

States did a good job of keeping utilization in brand Sabril as opposed to its generics. However, the net spend for the generics was collectively about $16 million (the No. 3 net spend product in this class) despite a prescription count that was half that of the brand utilization.

0.18

$

BRAND 57.4%

62.0%

$

21.9%

$

Ingrezza was the No. 13 positive trend driver and rose from the No. 54 net spend product in 2018 to No. 26 in 2019 despite wide non-preferred status.

0.13

CLINICAL

17.0% 42.6%

BRAND

43.1%

-0.01

$

2018

2019

0

Epidiolex, the No. 3 positive trend driver, fueled the class’s No. 9 positive trend driver ranking. Epidiolex was the No. 16 net cost product in 2019.

2019

15 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

A 65% increase in utilization in 2019 led to No. 10 positive trend driver status for this class. It also rose from the No. 38 net spend class in 2018 to No. 23 in 2019.

0.04

19.9% 12.4% 5.7% 2018

3.4 2019 %

0.01

$

0.3%

-0.02

$

2019

0

Tetrabenazine saw no change in utilization between 2018 and 2019. A few states use a step requirement through this generic before accessing brands for the treatment of Huntington’s chorea with varying success.

Oncology, Oral — Hematologic

Anesthetics, Topical Net Dollar Impact $0.14

$14.0M

21.2%

Net Spend Trend

Total Net Spend Trend

-2.9%

Claim Volume Trend

Net Dollar Impact $0.13

24.8%

$13.9M

Net Cost Per Claim Trend

301.4%

Net Spend Trend

3.7%

Total Net Spend Trend

Claim Volume Trend

286.9%

Net Cost Per Claim Trend

Class Summary

Class Summary

Despite a 3% decrease in utilization, this class experienced a 25% increase in net spend that moved it from the No. 13 net spend class in 2018 to No. 10 in 2019.

Numerous PDL classes continue to be monitored for net spend impact despite a composition consisting primarily of highly utilized, inexpensive generics. Products such as Lidotral, the No. 13 positive trend driver and No. 65 net spend product in 2019, are easy to spot in this environment.

FIGURE 42: MARKET SHARE AND NET DOLLAR IMPACT Hydroxyurea (Oral) Mercaptopurine (Oral) Revlimid (Oral) Sprycel (Oral) Imatinib (Oral) Other

FIGURE 43: MARKET SHARE AND NET DOLLAR IMPACT Lidocaine Hcl Ointment (TOP) Lidocaine/Prilocaine Cream (TOP) Lidotral (TOP) Lidocaine Hcl Cream OTC (TOP) Lidocaine Hcl Cream (TOP) Other

BRAND Market Share

42.6%

Net Dollar Impact Change

Utilization of Gleevec is in the process of transitioning to imatinib as the net price for the generic becomes lower.

Market Share

Net Dollar Impact Change

BRAND

40.6%

Lidotral utilization accounted for $15 million in 2019 net spend in a class with a 2018 net spend of less than $5 million it o t offerin a ear ini a ene t compared to existing products.

41.1%

47.7%

0.16

$

21.2% 6.9% 5.8% 3.6% 19.9%

19.0%

0.14

$

BRAND

7.2%

The transition from Imbruvica capsules to Imbruvica tablets registered a double hit on the positive trend for the class, accounting for two of the Top 10 net spend products.

5.6% 4.2% 23.4%

-0.01

$

2019

8.1%

0

-0.02

6.2% 4.9%

2019

2018

$

2018

37.0% 39.5%

0.2% 1.7%

6.5% 4.9% 2019

2.4%

-0.01

$

0

2019

2020 / MAGELLANRX.COM/TRENDREPORT

16

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Epinephrine, Self-Injected

Oncology, Oral — Breast Net Dollar Impact $0.08

$8.6M

N/A

Net Spend Trend

8.6%

Total Net Spend Trend

Claim Volume Trend

Net Dollar Impact $0.07

N/A

$86.5M

Net Cost Per Claim Trend

10.2%

Net Spend Trend

Total Net Spend Trend

-1.3%

Claim Volume Trend

11.7%

Net Cost Per Claim Trend

Class Summary

Class Summary

is ass remaine a so r e o r stration in fferin a eneri t at a a o net ost t was not consistently available led to increased utilization of higher-cost devices and contributed to the class status as the No. 20 positive trend driver in 2019.

There were six oncologic product divisions in the Top 31 net spend classes reported in 2019; this was the second-highest individual class and the No. 14 positive driver of net spend. It rose from the No. 15 net spend class in 2018 to No. 12 in 2019.

FIGURE 44: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 45: MARKET SHARE AND NET DOLLAR IMPACT

Epinephrine 0.3 mg (Epipen) (AG) (INJ) Epinephrine 0.15 mg (Epipen Jr) (AG) (INJ) Epinephrine 0.3 mg (Epipen) (INJ) Epinephrine 0.3 mg (Adrenaclick) (AG) (INJ) Epipen (IM) Other

Market Share

Anastrozole (Oral) Tamoxifen Citrate (Oral) Letrozole (Oral) Exemestane (Oral) Ibrance Capsule (Oral) Other

MARKET

Net Dollar Impact Change

0.02

MARKET

$

45.6%

52.5%

Market Share

Utilization of non-authorized generics for EpiPen rose from under 500 to over 20,000 in the span of a year. This utilization accounted for 34% of market share but virtually the entire $8.4 million in net spend for the class.

0.01

$

Net Dollar Impact Change

31.9%

32.6%

26.9%

24.9%

0.02

$

0.05

$

BRAND

20.1% 22.7% 0.3% 9.9% 7.7

%

19.1%

20.1%

0.05

$

12.8% 0.01

$

9.8% 4.2%

Generics comprised nearly 89% of utilization in this class in 2019, representing a reduction of less than 1% from 2018. Overall utilization in the class went down slightly, but net spend rose more than 10%.

6.6%

6.4%

$

-0.01

5.7%

5.9%

0

6.9%

7.5%

$

-0.01

9.8%

10.2%

2018

2019

2019

2018

2019

17 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

2019

Ibrance dominated this class with nearly $50M in net spend as the No. 12 net spend product. However, growth in Verzenio ti i ation as t e most si ni ant river o trend.

Immune Globulins

Immunomodulators, Asthma Net Dollar Impact $0.05

$5.2M

13.5%

Net Spend Trend

Total Net Spend Trend

7%

Claim Volume Trend

Net Dollar Impact $0.05

6.1%

$5.6M

Net Cost Per Claim Trend

32.8%

Net Spend Trend

13.1%

Total Net Spend Trend

Claim Volume Trend

17.4%

Net Cost Per Claim Trend

Class Summary

Class Summary

This class was the No. 15 positive trend driver in 2019 and moved up from the No. 26 net spend class in 2018 to No. 22 in 2019.

This class experienced modest increases in utilization and net spend, ranking as the No. 46 net spend class in 2019. If Dupixent had been categorized in this class instead of in immunomodulators, atopic dermatitis, this would have been a Top 20 net spend class.

FIGURE 46: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 47: MARKET SHARE AND NET DOLLAR IMPACT

Hizentra Vial (SQ) Gamunex-c (INJ) Gammagard Liquid (INJ) Privigen (IV) Cuvitru (SQ) Other

Market Share

Xolair Vial (SQ) Xolair Syringe (SQ) Nucala Vial (SQ) Fasenra Syringe (SQ) Nucala Auto-injector (SQ) Other

Net Dollar Impact Change

Market Share

Net Dollar Impact Change

0.01

$

46.7%

44.6%

MARKET 0.01

$

0.01

$

16.1%

15.1%

There was a slight uptick in utilization in 2019, evenly distributed among available products. Subcutaneously administered products continue to make up just over half the overall utilization.

BRAND

orm ation an es ontri te si ni ant to the increased net spend in 2019, led by Xolair’s syringe — the No. 22 positive trend driver.

0.06

$

56.4%

88.8%

16.0% 0.01

$

15.2%

5.0%

7.7%

6.7%

6.3%

10.1%

10.2%

2018

2019

0.02

$

25.9%

0

0.03

$

-0.03

10.8% 8.4% 2019

2018

2.8%

5.9% 2019

$

0.7% 0.3% 2019

2020 / MAGELLANRX.COM/TRENDREPORT

18

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Antimigraine Agents, Other

PAH Agents, Oral and Inhaled Net Dollar Impact $0.05

$5.1M

267.1%

Net Spend Trend

Total Net Spend Trend

493.9%

Claim Volume Trend

Net Dollar Impact $0.04

-38.2%

$3.2M

Net Cost Per Claim Trend

6.7%

Net Spend Trend

-11.7%

Total Net Spend Trend

Claim Volume Trend

20.8%

Net Cost Per Claim Trend

Class Summary

Class Summary

As e e te ro a ti a itonin ene re ate e ti e G in i itors a se a si ni ant in rease in t is ass ti i ation an net s en in t eir rst ear on t e mar et ti t is ass did not break into the Top 100 classes in net spend due to substantial discounts available to Medicaid. It was the No. 18 positive driver of trend.

This class stayed at No. 18 in net spend in 2019 but was the No. 19 positive driver of trend at the same time. This was possible due to a 21% increase in net spend owing largely to a new generic for Revatio suspension. However, there were several new generics in this class (Letairis and Tracleer) that also contributed to a lesser extent.

FIGURE 48: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 49: MARKET SHARE AND NET DOLLAR IMPACT

Aimovig (SQ) Emgality Pen (SQ) Ajovy (SQ) Cambia (Oral) Dihydroergotamine Mesylate (Nasal)

Market Share

i ena a et ra Adcirca (Oral) Letairis (Oral) Revatio Suspension (Oral) a a a A ir a ra Other

Other

Market Share

Net Dollar Impact Change

Net Dollar Impact Change 0.01

$

CLINICAL

37.4% 0.02

$

51.7% 1.1% 3.2%

New non-triptan treatment options expected to launch in 2020 will keep a focus on the impact of this class.

0.01

$

25.6%

11.8%

9.9%

4.6% 4.2%

2018

2019

0.01

19.4%

0

8.4% 6.5% 1.2%

10.6% $

0.07

12.9%

10.7% 16.9%

-0.05

$

25.6%

3.3% 2019

19 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

The use of Revatio suspension accounted for about 75% of utilization between the brand and its generic but less than 50% of the net spend between the two. Medicaid programs would have spent less money by preferring this brand over its generic equivalent.

$

13.9% 15.0%

31.5%

MARKET

32.7% 41.9%

2018

2019

2019

COPD Agents

Neuropathic Pain

Net Dollar Impact $-0.04

$-4.4M

Net Dollar Impact $-0.04

-50.5%

Net Spend Trend

-1.1%

Total Net Spend Trend

Claim Volume Trend

-50.0%

$-5.9M

Net Cost Per Claim Trend

-8.2%

Net Spend Trend

-4.5%

Total Net Spend Trend

Claim Volume Trend

-3.9%

Net Cost Per Claim Trend

Class Summary

Class Summary

In a year when negative trend drivers were less impactful than their counterparts, COPD agents a some si ni an e e o ne ative tren river t is ass e erien e a e ine in net spend due to increased rebate totals.

Neuropathic pain fell from the No. 11 net spend class in 2018 to No. 14 in 2019 — the No. 10 negative class driver of net spend.

FIGURE 50: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 51: MARKET SHARE AND NET DOLLAR IMPACT

Spiriva (INH) Ipratropium/Albuterol (INH) Combivent Respimat (INH) Ipratropium Nebulizer (INH) Atrovent HFA (INH) Other

Market Share

Gabapentin Capsule (Oral) Duloxetine (Cymbalta) (Oral) Gabapentin Tablet (Oral) Lyrica Capsule (Oral) Lidocaine (TOP) Other

Net Dollar Impact Change

Market Share

Net Dollar Impact Change

0 -0.01

$

39.2%

36.5

0.02

$

BRAND

The impact of Combivent Respimat’s lower net cost per prescription had the greatest nan ia im a t in t e ass t t e ro t ene te rom a itiona states istin it as preferred.

%

49.7%

MARKET

0.01

$

47.1%

0 -0.01

$

Although Lyrica brand utilization decreased slightly with the launch of its generic, it was actually its declining net spend that contributed most to the class’ s fall in net spend ranking.

-0.01

$

23.7%

25.5%

10.8

10.0%

-0.03

$ %

8.6% 5.2

%

6.9%

19.2%

21.0%

13.9%

%

12.5

15.9%

2018

2019

13.2%

1.7%

2.3% 10.5%

2.3% 2019

2018

-0.05

$

14.6%

5.1%

4.5% 2019

2019

2020 / MAGELLANRX.COM/TRENDREPORT

20

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Analgesics, Narcotics Long

Hypoglycemics, Insulin

Net Dollar Impact $-0.05

Net Dollar Impact $-0.05

$-5.9M

-32.4%

Net Spend Trend

-15.3%

Total Net Spend Trend

Claim Volume Trend

-20.1%

$-5.3M

Net Cost Per Claim Trend

30.8%

Net Spend Trend

-0.3%

Total Net Spend Trend

Claim Volume Trend

31.2%

Net Cost Per Claim Trend

Class Summary

Class Summary

This class served as a negative trend driver based on the 15.3% reduction in prescriptions and the 20.1% reduction in net spend.

This class remains at the bottom of the rankings according to net spend yet continues to decline in overa nan ia im a t to e i ai ran in as t e o ne ative river o tren in

FIGURE 52: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 53: MARKET SHARE AND NET DOLLAR IMPACT

Morphine ER Tablet (Oral) Fentanyl (TD) Oxycontin (Oral) Methadone Tablet (Oral) Methadone (Oral) Other

Market Share

Lantus Solostar Pen (SQ) Novolog Pen (SQ) Lantus Vial (SQ) Humalog Vial (SQ) Levemir Pens (SQ) Other

Net Dollar Impact Change

Market Share

Net Dollar Impact Change

0 -0.01

$

27.5%

30.1%

-0.01

$

14.8%

17.0%

CLINICAL

The continued trend away from opioid analgesic utilization resulted in No. 7 negative class trend driver status for this class. Utilization fell 15% in 2019 after a double-digit decrease in 2018, as well.

22.9%

MARKET

25.5% 0.08

$

10.5% 11.8

%

10.8% 9.8%

0 -0.02

$

13.8

%

-0.01

$

14.8% 8.2% 8.9% 2.1%

-0.02

2018

9.8%

9.2%

9.2

34.9%

34.9%

2018

2019

%

-0.01 -0.01

$ $

7.6% $

27.1%

10.7%

-0.08

$

28.1

%

2019

2019

21 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

2019

As expected, authorized generics and biosimilars again did not make an impact in utilization in this class due to their high relative net cost compared to reference brands. Less than 2% of utilization was in these product types.

Multiple Sclerosis Agents

Analgesics, Narcotics Short

Net Dollar Impact $-0.06

Net Dollar Impact $-0.10

$-7.8M

-14.9%

Net Spend Trend

Total Net Spend Trend

-12.6%

Claim Volume Trend

-2.5%

$-12.0M

Net Cost Per Claim Trend

-18.9%

Net Spend Trend

-17.8%

Total Net Spend Trend

Claim Volume Trend

-1.3%

Net Cost Per Claim Trend

Class Summary

Class Summary

A 13% reduction in utilization was primarily responsible for this class’ status as the No. 5 negative trend driver in 2019. There were slight increases in oral therapies and small declines in injectable ones.

This class had the third-most negative trend due to a 17.8% decrease in utilization and an 18.9% decrease in net spend.

FIGURE 54: MARKET SHARE AND NET DOLLAR IMPACT

FIGURE 55: MARKET SHARE AND NET DOLLAR IMPACT

e era ra Gilenya (Oral) Aubagio (Oral) Copaxone 40 mg/ml (SQ) Copaxone 20 mg/ml (SQ) Other

Hydrocodone/APAP (Oral) Oxycodone/APAP (Oral) Oxycodone (Oral) Tramadol (Oral) APAP/Codeine (Oral) Other

BRAND Market Share

17.7%

Net Dollar Impact Change

18.9%

Increased rebate obligation for Copaxone 40 m m in e tion as t e most si ni ant net price change in this class. Even so, this only rated as the No. 43 negative trend driver.

0.01 .0.02

0

$

-0.01

12.4%

11.9%

12.4%

12.8%

11.8%

11.8%

10.4%

Net Dollar Impact Change

$

$

11.9%

Market Share

37.2%

0

36.6%

-0.01

$

-0.04

$

-0.01

$

-0.04

2018

34.1

%

2019

20.9%

15.6%

16.6%

15.4%

15.2%

%

4.9 5.9%

4.8 5.9%

2018

2019

CLINICAL $

33.9%

21.0%

2019

New product launches for Mavenclad and Mayzent did not make an impact in a market it s ient ora o tions or treatment

CLINICAL

The continued trend away from opioid analgesic utilization resulted in No. 3 negative class trend driver status for this class. Utilization fell 18% in 2019 after a double-digit decrease in 2018, as well.

-0.04

$

-0.04

$

%

-0.01

$

2019

2020 / MAGELLANRX.COM/TRENDREPORT

22

KEY THERAPEUTIC CLASSES BY NET DOLLAR IMPACT

Hepatitis C Agents

Stimulants and Related Agents Net Dollar Impact $-0.41

Net Dollar Impact $-0.19

$-24.7M

-14.8%

Net Spend Trend

-1.8%

Total Net Spend Trend

Claim Volume Trend

-13.2%

$-51.2M

Net Cost Per Claim Trend

Net Spend Trend

-16.5%

Total Net Spend Trend

-2.8%

Claim Volume Trend

-14.1%

Net Cost Per Claim Trend

Class Summary

Class Summary

This class dropped in the net spend rankings from No. 6 in 2018 to No. 7 in 2019. Utilization o sa va e treatments remaine o s ea in to t e i rea or effe tiveness o t e ora treatment options.

Despite its status as the No. 1 negative trend driver among PDL classes, stimulants and related agents was still the No. 5 net spend class in 2019. Net spend fell over 14% between 2018 and 2019, largely due to utilization movement between brand and generic equivalents. As discussed on a e e era re ate va es ere si ni ant an e t e remova o a t ori e eneri s from the blended AMP calculation upon which federal rebates are based. Increases in Adderall XR and Concerta federal rebates following the revised calculation resulted in net prices to states that were far more attractive than that of their generic equivalents.

FIGURE 56: MARKET SHARE AND NET DOLLAR IMPACT Mavyret (Oral) Epclusa (Oral) Harvoni (Oral) Sofosbuvir/velpatasvir (AG) (Oral) Vosevi (Oral) Other Market Share

BRAND

Net Dollar Impact Change 0.05

$

0.01

$

49.8%

0

The authorized generic for Epclusa (and, to a lesser extent, Harvoni) ranked a modest No. 207 in 2019. The manufacturer launched its own authorized generic as a mechanism to decrease reimbursement costs. However, net prices in Medicaid were such that the appeal of the authorized generic did not extend throughout this market.

51.3% -0.11

$

MARKET

Mavyret was the No. 11 negative trend driver and its net spend rank fell from No. 2 in 2018 to No. 3 in 2019. Utilization was relatively unchanged.

34.3%

12.9%

2018

Vyvanse Capsule (Oral) Amphetamine Salt Combo (Oral) Guanfacine ER (Oral) Adderall XR (Oral) Focalin XR (Oral) Market Share

2.2%

5.1% 3.7% 4.0% 2019

-0.12

$

0.02

$

19.3%

13.3%

13.4%

9.7%

10.6%

13.0%

10.1%

1.6%

-0.02 $-0.01 2019 $

23 M A G E L L A N R X M E D I C A I D P H A R M A C Y T R E N D R E P O R T / 2 0 2 0

-0.01

$

BRAND -0.28

$

-0.04

$

36.3%

39.0% -0.10

$

2018

0

Concerta was the No. 15 positive trend driver and rose to the No. 110 net spend product in 2019, up from No. 7,300 in 2018. Its generics, authorized and non-authorized, were the No. 13 and No. 14 negative trend drivers, respectively, and together would have been the No. 4 negative trend driver.

Adderall XR was the No. 1 negative trend driver and fell from the No. 13 net spend product in 2018 to No. 56 in 2019. The class was also the No. 1 negative trend driver, as net spend fell 14% in 2019.

7.6%

MARKET

Utilization did not change appreciably year-over-year; a lower net spend (-13%) designated this class the No. 2 negative trend driver.

BRAND Other

Net Dollar Impact Change

19.8%

7.9%

28.7%

6.4%

FIGURE 57: MARKET SHARE AND NET DOLLAR IMPACT

2019

2019

MARKET

The impact of the AMP calculation change, effe tive t i ontin e to e felt throughout 2020 and beyond for some key products, leading to increased market share shifts from generics to their brand equivalents.

PIPELINE AND FORECASTING Keep on Your Radar

Key Conditions Forecast

ota e a ents t at are rt er rom a rova ave een i enti e in Figure 58. These products ave t e otentia or si ni ant ini a an nan ia im a t eir eve o ment stat s is ein tracked on the MRx Pipeline radar. These pipeline products, their respective class or proposed in i ation an an estimate nan ia ore ast or t e ear are is a e e nan ia s are projected total annual U.S. sales, reported in millions.

it a stea in rease in t e i e ine man e on itions nota t ose it eneri introductions or specialized management strategies, such as pain conditions, hepatitis C, and MS, i see stea ann a in reases in tren over t e ne t t ree ears see figure 59).

2

FIGURE 59: EY CONDITIONS FORECAST

FIGURE 58: KEEP ON YOUR RADAR 2 20%

voclosporin

aducanumab

$649

$940

Immunology

17%

Neurology

remdesivir COVID-19

12% 12%

relugolix

casimersen

Anti-Clotting era

$187

4

%

-9%

3%

Neurology/Gene Therapy

$578

9%

8% 5%

$366

Women's Health/ Oncology

11%

-3%

9%

betibeglogene autotemcel (Zynteglo)

Hematology/Gene Therapy

$1,190

17%

1%

Attention e it era tivit isor er

Ast ma

e ression

Autoimmune: Anti in ammator

efgartigimod

mRNA-1273 vaccine COVID-19

Immunosuppressants

$2,859

$727

lonapegsomatropin

elivaldogene tavalentivec (Lenti-D)

Endocrine

$589

2% 10%

Neurology/Gene Therapy

$42

10% 6

%

lenadogene nolparvovec (GS010) Ophthalmology/ Gene Therapy

$39

-5%

inclisiran

Cardiovascular

ipatasertib

7% 4%

3%

3%

-9%

-10%

$693

-13%

Oncology

ia etes

$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.

is ni e at ist is a s ro ts it t e otentia or si ni ant projected total annual U.S. sales, reported in millions. i e ine e ort tt s iss om ma e anr o s mr i e ine

ini a an mr

10%

-1%

7%

nan ia im a t

ese i e ine ro

r s m i

ts t eir res e tive

A

ass or ro ose in i ation an an estimate

ertension

Multiple Sclerosis

nan ia ore ast or t e ear

are is a e

n oo

e nan ia s are

a esse

2020 / MAGELLANRX.COM/TRENDREPORT

24

METHODOLOGY e a e an e i ai ana sis o e i ai

ren e ort o se e sive on e i ai arma aims ata on a ost er aim asis

aim an

r

s en an

»

e re ort tren s are ase on ross an net ost er a en ar ear ata to a en ar ear ata

om are

»

e ata set se in t is eva ation ontains more t an ross ost o i ion an a net ost o i ion

»

ata as o taine rom e i ai ients a ross t e o ntr rom i t o ears o om ete ata are avai a e aims ata se in t is re ort is i avai a e on t e e site tt s me i ai ov me i ai res ri tion drugs/state-drug-utilization-data/index.html.

mi ion

aims

it a

oes not in

e mana e

are or ani ation

ti i ation t rovi es a om re ensive ear over ear

» As in ommer ia ans tra itiona an s e ia t r tren s are not imm ne to man a t rer ri e a tions at t e ross ost eve o ever t e in rease at t e net ost eve is some at miti ate s ementa re ates ere a i a e an t e ena t om onent o t e e era re ate »

o a ieve t e i est eve o a ra or t e e i ai s a e t is re ort a ain in or orates t e e era re ate ata or ot an e era re ate ata at t e r eve is on entia an rote te e era a n er t e o ia e rit A t at r ere ore t is re ort oes not is ose net ost pricing information on a per-drug basis.

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ition i e ine e ort to a

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May 2020

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

GLOSSARY ACA ................................................................................................................................................Affor a e are A t

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

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

........................................................................................................................................................................ injectable

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

...................................................................................................................................................................... intravenous

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

.........................................................................................................................................................line of business

AWP ....................................................................................................................................avera e

o esa e ri e

CGRP .................................................................................................................calcitonin gene-related peptide CMS ............................................................................................Centers for Medicare & Medicaid Services ...............................................................................................

roni o str

tive

monar

isease

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

ti i ation revie

a ment an A ess ommission

............................................................................................................................. managed care organization P&T ..............................................................................................................................

arma

an t era e ti s

.................................................................................................................................................. re erre

r

ist

A ............................................................................................................................................ re ate offset amo nt ............................................................................................................................................................ site of service

.........................................................................................................................................................extended release

............................................................................................................................................................... subcutaneous

A ..............................................................................................................

A ministration

....................................................................................................................................................................transdermal

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

..............................................................................................................................................................................topical

oo an

r

A ..................................................................................................federal medical assistance percentage G

MACPAC ........................................................... e i ai an

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

HHS .................................................................................

e artment o

ea t an

WAC ...............................................................................................................................

o esa e a

isition ost

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

man ervi es

IM .................................................................................................................................................................intramuscular 2020 / MAGELLANRX.COM/TRENDREPORT

26