Commercial Health Plans’ Spending on Drugs Slowed in 2016: Express Scripts

February 6, 2017

Express Scripts Holding Co., the largest pharmacy benefit manager in the United States, said prescription drug spending for its members slowed to less than 4 percent in 2016, at a time when scrutiny of drug price hikes has intensified.

Prescription benefit managers (PBMs) negotiate drug benefits for health plans and employers, and have in recent years taken an increasingly aggressive stance in price negotiations with drugmakers.

They often extract discounts and after-market rebates from drugmakers in exchange for including their medicines in their formularies with low co-payments.

Per-person spending on prescription drugs increased 3.8 percent in 2016, compared with the 5.2 percent increase in 2015, according to Express Scripts’ drug trend report on Monday.

Brand-name list prices increased nearly 11 percent in 2016, the company said.

Drug pricing has become a lightening rod for criticism with several drugmakers under federal investigations for sharp price increases.

U.S. President Donald Trump in a meeting with pharmaceutical executives last week urged them to manufacture more of their drugs in the United States and cut prices.

Express Scripts, which is also the target of short-seller Citron Research’s Andrew Left, said on Monday it saved its members $1.3 billion in 2016.

Left in December called Express Scripts the “culprit behind pharmaceutical price gouging,” and added that the company benefited from the “opaqueness” of drug pricing.

(Reporting by Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila)


Topics USA Commercial Lines Drugs

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