#United States #Eagan #Specialty Drugs #Prime Therapeutics #Medical Spending

What’s Driving Medical Benefit Spend?

Prime Therapeutics LLC's recent Medical Pharmacy Trend Report provides crucial insights into the factors behind rising medical benefit expenditures. As healthcare continues to evolve, payers face mounting challenges in managing the escalating costs of specialty medications, particularly in an era where chronic diseases are becoming more prevalent and the aging population demands increased access to these costly treatments.

Rising Costs and Complexity

Specialty medications make up a significant portion of overall health spending, with about 55% of this expenditure classified under the medical benefit, primarily because these drugs are often administered in hospital or clinical settings. The complexity of billing and clinical considerations associated with these therapies adds layers of difficulty for healthcare providers and payers alike, making management of these costs increasingly urgent.

In its 15th edition, the 2025 Medical Pharmacy Trend Report presents a unique combination of medical and pharmacy claims data, which is published annually to support better decision-making. By integrating these data sets, the report offers a comprehensive view of total healthcare costs associated with various therapeutic categories, particularly for commercial and Medicare lines of business. Kristen M. Reimers, senior vice president of specialty clinical solutions for Prime, states, "This year’s data underscores the growing complexity of managing medical benefit drugs, especially as innovation accelerates and costs climb. Our integrated analytics and payer insights help stakeholders navigate these shifts and make informed decisions."

Key Insights from the Report

The report details critical insights that highlight emerging trends in medical drug spending:

• - Oncology drugs remain the leading category, representing 40.7% of commercial and 55.5% of Medicare medical drug expenses.
• - Innovative gene therapies have reached exceptionally high price points, with drugs like atidarsagene autotemcel (Lenmeldy) priced at $4.25 million and eladocagene exuparvovec-tneq (Kebilidi) at $3.95 million.
• - The utilization of high-cost therapies, particularly those exceeding $50,000 per user, has surged, with a notable increase of 38.7% among Medicaid recipients.
• - Vaccines and ophthalmic treatments are also seeing significant growth, driven primarily by products like the pneumococcal 20-valent conjugate (Prevnar 20) vaccine and faricimab-svoa (Vabysmo).
• - Pembrolizumab (Keytruda) has emerged as the leading drug across all payer categories, significantly impacting spending as its indications continue to expand.

Payer Strategies and Financial Concerns

The report also features findings from Prime's annual payer survey, revealing how insurance plans are addressing the challenges presented by these rising costs:

• - 68% of plans are now utilizing value-based contracts or outcomes-based agreements, which align payments with the therapeutic value provided to patients.
• - A significant 72% of plans highlight the management of financial risk as a primary obstacle in covering expensive gene therapies.

In conclusion, the full 2025 Medical Pharmacy Trend Report can be accessed at PrimeTherapeutics.com/Read, where stakeholders will find detailed analyses categorized by therapeutic type, drug-level spending trends, payer strategies, and forecasts extending to 2027. A deeper examination into this year’s findings is available through the upcoming Medical Pharmacy Trend Report webcast, which is scheduled for October 13.

For further context on this essential issue, it's vital to recognize the balance between the need for innovative therapies and the associated financial implications for all parties involved, including payers, providers, and patients alike. This report aims to shed light on these complexities and provide a roadmap for navigating the future of medical benefit spending in a rapidly changing healthcare landscape.