2024 Medical Pharmacy Trend Report Executive Summary

Medical Pharmacy

Trend Report

™

2024 FO U RTEENTH ED ITI O N EXECUTIVE SU M MARY

Methodology The 2024 edition of the Prime Therapeutics Medical Pharmacy Trend Report (formerly known as the Magellan Rx Medical Pharmacy Trend Report) was developed using medical pharmacy industry standard methodologies, calculations, guidance from medical drug management experts and feedback from previous trend reports. Results were based on a non-continuous population over the five years analyzed. The trend forecast utilized various modeling techniques, including time series modeling, product mapping, custom component modeling, assumptionbased modeling and forecasting by analogy, to generate trend forecasts at a line of business level.

This report includes research data obtained through a survey of payers conducted in Spring 2024 to deliver a comprehensive view of payer perceptions and health plan actions related to provider-administered, -infused or -injected drugs paid under the medical benefit, also referred to as medical benefit drugs. These medical benefit drugs are commonly used to treat chronic, progressive, incurable medical disorders.

Health plan claims data Medical benefit drug utilization and trend data were collected through secondary analyses of commercial, Medicaid and Medicare Advantage health plan medical paid claims data for the most recent calendar years. Claims data was analyzed for medical pharmacy utilization across 1,106 health care common procedure coding systems (HCPCS) and several outpatient sites of service.* Most analyses compared calendar years 2022 and 2023. In some cases, the past five years were analyzed to show a longer period of year-over-year spend and trend. All data includes allowed amount costs directly from health plans for medical drugs only. *Radiopharmaceuticals were excluded. Drugs administered in the hospital inpatient setting were not included in any analyses.

Questions? Contact us at mptrends@primetherapeutics.com. © 2024 Prime Therapeutics LLC. Prime Therapeutics 2024 Medical Pharmacy Trend Report™ is published in conjunction with D Custom. All rights reserved. All brand names 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: Prime Therapeutics Medical Pharmacy Trend Report™, Fourteenth Edition, © 2024. Used with permission.

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Commercial

Executive summary

11.2%

12.2%

Medicare

Medicaid

3.9%

commercial PMPM trend

Medicare PMPM trend

Medicaid PMPM trend

$49.08 PMPM

$78.35 PMPM

$20.24 PMPM

Major trend drivers

39

Vaccines — commercial and Medicare

novel medical pharmacy drug approvals in 20231, 2, 3

Vabysmo — commercial and Medicare Rare disease decreases — Medicaid

Utilization trends

13.1%

5.3%

0.6%

commercial

Medicare

Medicaid

Keytruda top drug by spend across all lines of business

Biosimilars mitigate trend in multiple therapy classes

2024 M E D I CA L P HA R M ACY TR E N D R E P O RT

2

Commercial

Medicare

Medicaid

2023 top spend drugs' impact on trend Figure 1 Keytruda

Keytruda

18.3%

21.2% Ocrevus

• Keytruda continued to be a double-digit trend driver for commercial (21.2%), Medicare (18.3%) and Medicaid (16.7%).

16.7%

-0.9% Opdivo

9.2%

Top drug spends

• Ocrevus and Entyvio continued to drive trend in commercial and Medicaid due to increases in both claims and utilizers.

Ocrevus

Eylea

12.3% Entyvio

Keytruda

15.5%

16%

• Eylea held the second spot by PMPM spend in Medicare, although spend decreased by 0.9% due to increased Vabysmo uptake.

Entyvio

• Opdivo spend in Medicare rose due to increased utilization in urinary system and respiratory cancers.

18.8%

$0-100

$100-1,000

$1,000-10,000

$10,000-50,000

7.1%

-4.9%

-0.8%

• There were double-digit increases in utilizers with an annual cost of more than $50,000 in both commercial (26.8%) and Medicare (16.4%).

6.3%

10.1%

16.4% 5.6%

4.8%

8.4%

3.7%

12%

• Medicaid saw decreased utilization for lower-cost therapies (less than $100 annual cost/utilizer and $1,000–$10,000 annual cost/ utilizer).

8.8%

• Utilization increased for each cost category for commercial and Medicare in 2023.

10.7%

Utilization by cost

26.8%

27.2%

2023 utilization trend by annual cost* Figure 2

$50,000+

*Reflects change in utilization of drug and therapy combinations for the various annual cost/utilizer categories shown.

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Commercial

EXEC U T I VE S U M M A RY

Allowed cost per claim Figure 3

-1.7% $828

$700

5.3% 3.3%

$746 $636

1,196.6

1,259.6

13.1%

$657 639.9

723.6

0.6% 367.4

2022

Medicaid

Annual claims per 1k members utilization Figure 4

6.6%

$814

Medicare

2023

2022

369.7

2023

Allowed cost per claim

Annual claims per 1k members

• Cost per claim decreased by 1.7% in commercial, driven by higher utilization of lower cost drug classes such as vaccines (+169.6% claims volume), corticosteroids (+12%) and infectious disease (+14.2%). Within the top 20 drugs by spend, Remicade (-17.8%) and Mvasi (-12.4%) had the greatest decreases in cost per claim.

• Commercial posted a double-digit increase in claims volume (13.1%) in 2023. The top three drugs that contributed to this trend were dexamethasone, Rocephin and Prevnar 20.

• Cost per claim increased for the government businesses, with a 6.6% trend in Medicare and 3.3% trend in Medicaid.

• In the top 20 Medicare drugs, Imfinzi (+31.1%) and Tepezza (+25.3%) had the greatest increases in cost per claim. For Medicaid, the greatest increase in cost per claim was in the unclassified code (J3590). Total spend for drugs over all unclassified codes was $0.27 PMPM.

• Medicare claims volume increased by 5.3% in 2023. Prevnar 20, DepoMedrol, COVID-19 vaccines and Vabysmo were the top contributors to this trend.

• Medicaid claims volume remained flat at 0.6%. Claims volume increases for pneumococcal and COVID-19 vaccines were offset by decreases in Makena and injectable corticosteroids. The FDA withdrew Makena's approval in April 2023 as confirmatory trials did not verify clinical benefit.

2024 M E D I CA L P HA R M ACY TR E N D R E P O RT

4

Commercial

Medicare

Medicaid

Forecast • Expect further biosimilar movement — Eylea, Stelara and Soliris all have approved biosimilars that are expected to launch in the next few years.

• Monoclonal antibodies for Alzheimer's: Kisunla was approved in July 2024, joining Leqembi as a potential trend contributor in the Medicare space.

• CAR T-cell therapies Abecma, Carvykti and Breyanzi received approvals as earlier-line therapies in 2024, which may increase utilization of these agents.

• Gene therapies Casgevy, Lyfgenia and Kresladi (pending FDA approval) have the potential to impact the rare disease therapy category in future years.

2020-2026 PMPM trends and forecast Figure 5

12.2%

*Forecasted trends are shown for 2024.

5

2021

2022

2023

2024*

2025

2026

6.3%

5.8%

6.7%

4.7%

7.1%

6%

3.3%

6.6% 0%

3.9%

4.6%

2.3% -6.2%

1.8%

2.8%

2020

5.5%

11.2%

Commercial: $49.08 Medicare: $78.35 Medicaid: $20.24

7.1%

11.3%

13.5%

2023 PMPM by LOB

Glossary and references CAR T............................................................................................................................chimeric antigen receptor T-cell therapy

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

COVID-19.................................................................................................................................................... coronavirus disease of 2019

PMPM.......................................................................................................................................................................per member per month

Crohn’s/UC...............................................................................................................................crohn’s disease / ulcerative colitis

Utilizers........................................................................................................................................................... number of unique utilizers

FDA................................................................................................................................................ U.S. Food and Drug Administration

Reference #

Page #

Citation

1

2

IPD Analytics. FDA Novel Drug Approvals - 2023 Year in Review. Published March 2024

2

2

2023 Biological License Application Approvals. FDA. https://www.fda.gov/vaccines-blood-biologics/development-approval-process-cber/2023-biological-licenseapplication-approvals

3

2

Novel Drug Approvals for 2023. FDA. https://www.fda.gov/drugs/new-drugs-fda-cders-new-molecular-entities-and-new-therapeutic-biological-products/novel-drugapprovals-2023

Full report will be published in October 2024

2024 M E D I CA L P HA R M ACY TR E N D R E P O RT

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