Branded Prescription Drug Prices Continue to Rise – Blue Cross Blue Shield Association Report Reveals

Rise in Generic Drug Utilization Unable to Contain Overall Cost Increase for More Expensive Branded Prescription Drugs

CHICAGO – Prescription drug spending among branded specialty and patent-protected drugs continues to outpace generic drugs at $79.5 billion, according to an update to last year’s study of medical claims by the Blue Cross Blue Shield Association (BCBSA). At more than $100 billion, prescription drugs represent more than 20 percent of overall healthcare spending for Blue Cross and Blue Shield (BCBS) commercially insured members, which is critical to understanding overall healthcare costs. 

“Accountability and transparency are key to developing a better understanding of overall health care costs, particularly the cost of prescription drugs that are essential to maintaining a person’s health,” said Maureen Sullivan, chief strategy and innovation officer for BCBSA. “The report findings underscore the underlying cost drivers in the prescription drug market and identify potential surges in overall drug costs in the future."

The report, which encompasses eight years of drug utilization*, price changes and overall spending, examined why the rise in use of generic drugs has been unable to contain the overall cost increase for branded prescription drugs.** Some of the findings include:    

  • More expensive branded prescription drug spending is up 4 percent since 2016. Branded prescription drugs comprise only 17 percent of total prescriptions filled but account for 79 percent of overall drug spending at $79.5 billion.
  • Steady annual increases in branded patent-protected prescription costs drive the majority of spending in the branded drug space, growing 5 percent in the past year alone. 
  • The growing market share of inexpensive generic drugs continued to slow the increase in total drug spending. While generic drug spending has declined 3 percent since 2016, it hasn’t kept pace with the rapid rise in specialty branded drugs. 

BCBSA also published a list of the top medications by spending during 2017 across the BCBS System. It’s worth noting that the top three drugs on the list are used to treat autoimmune disorders.***

  • Humira® 
  • Remicade® 
  • Enbrel®  
  • Novolog® 
  • Neulasta® 

This is the twenty-second study of the Blue Cross Blue Shield: The Health of America Report® series, a collaboration between BCBSA and Blue Health Intelligence, which uses a market-leading claims database to uncover key trends and insights in health care affordability and access to care. 

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*Medical claims for 41 million commercially insured BCBS members were reviewed for this analysis, but the raw number that is written is an extrapolation to account for the 88 million members who currently have BCBS commercial coverage. 
**Pharmacy claims were used to estimate total spending and utilization. 
*** Humira®, Remicade®, Enbrel®, Novolog®, and Neulasta® are the property of their respective owners, which are in no way associated or affiliated with the Blue Cross and Blue Shield Association.

About BHI
Blue Health Intelligence (BHI) is the nation’s premier resource for data-driven insights about healthcare trends and best practices, promoting healthier lives and more affordable access to safe and effective care. BHI leverages a team of analytics experts and advanced technology, coupled with access to the greatest number of healthcare claims—172 million lives—gathered over 10 years in a safe, HIPAA-compliant, secure database. The resulting conformed, reliable data set has the broadest, deepest pool of integrated medical and pharmacy claims, reflecting medical utilization in every ZIP code. Blue Health Intelligence (BHI) is an Independent Licensee of the Blue Cross Blue Shield Association. BHI is a trade name of Health Intelligence Company, LLC.

The Blue Cross Blue Shield Association is an association of 35 independent, locally operated Blue Cross and/or Blue Shield companies.