Policy & Regulation News

Expensive Hepatitis C Drugs Quadrupled Prescription Spending

By Jacqueline DiChiara

- Healthcare spending for the privately insured has steadily increased over the last 5 years, confirms today’s fifth annual healthcare spending report from the Health Care Cost Institute (HCCI).

healthcare spending prescription drug costs

An eclectic rollercoaster of various numbers are reported – some up, some down, and some merely hanging on for the ride. 

HCCI's sizable 5-year analysis, based on de-identified health insurance providers’ Health Insurance Portability and Accountability Act (HIPAA) compliant claims data, researched claims for over one-quarter of the nation's total privately insured population.

Despite last year’s reported increase of 3.4 percent, overall use of healthcare services declined last year, says HCCI. Despite this, prices for all categories of services have reportedly risen.

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  • Last year’s most sizable decline in use (-2.7%) was in regard to acute admissions, says HCCI. Such decreased by 1 admission per 1,000 individuals. Contrastingly, outpatient visits were associated with the smallest recorded drop in use (-0.9%), decreasing by only 3 visits per 1,000 individuals.

    According to HCCI, over a five-year period, per capita spending growth remained “relatively steady,” increasing between a range of 3 to 4 percent annually.

    Last year, healthcare spending averaged nearly $5,000 per person, up 3.4% from the year prior, says HCCI. Out-of-pocket spending increased by over 2 percent to over $800, HCCI confirms.

    Brand name drugs are the new financial focus

    Last year, brand prescription drug spending increased at a rate described as “the largest increase in spending on brand prescriptions in recent years,” according to HCCI, referencing an 8.2 percent ($42) spike. 2012 numbers regarding brand prescription spending declined by $3.

    Despite a nearly 16 percent decrease in the use of brand prescriptions, last year’s spending for such quadruped from the year prior to $45 per capita, says HCCI.

    Hepatitis C antiviral drugs more specifically accounted for over $29 of the $45 per capita increase, reports HCCI. Such a spike was namely linked to the use of several newly available – and costly – Hepatitis C drugs Olysio, Sovaldi, and Harvoni.

    “The average price per filled day (not including rebates, discounts, or coupons) of Hepatitis C drugs was $983.30, compared to $38.30 for all other brand anti-infective medications,” states HCCI. "There were 30 filled days of Hepatitis C drugs per 1,000 individuals in 2014,” HCCI explains.

    "It's striking to see the impact high priced drugs can have on health care spending, particularly in the case of three Hepatitis C drugs, where use is relatively low," says Amanda Frost, HCCI Senior Researcher. "With more high-priced drugs set to enter the market, higher spending on brand prescriptions is a potential trend to watch," Frost adds.

    Adds HCCI Executive Director, David Newman, "With the implementation of the Affordable Care Act, HCCI looks forward over the coming years to continue its analysis of health care trends, tracking any changes brought by the ACA in order to aid and improve the U.S. health care system."

    HCCI highlights other spending findings

    • Prices increased for all services: The smallest average price increase was for professional services (3.1%), an increase of $3 per service. The largest average price increase was for acute inpatient admissions (4.6%), an increase of $831 per admission.
    • Out-of-pocket spending decreased for some services: Spending out of pocket on acute inpatient admissions (-$1) and on brand (-$9) and generic (-$4) prescriptions decreased by $14 per capita in 2014 compared to the previous year, while spending out of pocket on outpatient ($16) and professional ($15) services increased by a total of $31 per capita in 2014.
    • Women spending more out of pocket each year: Every year between 2010 and 2014, out-of-pocket spending was higher by women than by men. This difference grew every year, reaching $237 in 2014.
    • Gap in spending between young and old increasing: The difference in spending between the oldest and youngest age groups studied increased every year studied: from $6,281 in 2010 to $6,806 in 2014. In 2014, spending was $2,660 for children ages 0-18 and $9,466 for pre-Medicare adults, ages 55-64 (the oldest age group in HCCI's dataset).