Blue Cross NC Data: Brand Name Drug Prices Driving Up Costs for Consumers

87% of prescriptions are generic, but NC spends 4 times more on branded drugs

Durham, N.C. – Even as North Carolinians move increasingly toward using generic drugs, our state is still paying more for prescription medicines. Expensive brand-name, patent-protected prescriptions are driving the annual growth in drug spending in North Carolina. That trend is reflected across the US, according to a new study by the Blue Cross and Blue Shield Association (BCBSA).  
 
According to Blue Cross NC claims data, prescriptions for generic drugs for the company’s members in North Carolina increased from 74 percent of all prescriptions in 2011 to 87 percent in 2017, while the number of prescriptions for branded drugs fell by half, from 26 percent to 13 percent. Still, Blue Cross NC customers spent $1.5 billion on branded drugs in 2017 compared to $361 million on generics.
 
Despite buying nearly seven times as many generic drug prescriptions than branded, North Carolinians spend four times as much on branded drugs versus generics. 
 
“We need to lower the prices of brand-name drugs, particularly the most costly specialty drugs used to treat serious chronic illnesses,” said Blue Cross NC President and CEO Patrick Conway. “Patients, doctors and insurers in North Carolina have worked together to find more affordable alternatives to using expensive branded drugs. Yet we continue to see unsustainable price growth for prescription drugs.”
 
“Consumers spend more on prescription medicines every year. Many drug companies have raised prices to unsustainable levels unrelated to value,” according to Conway. “Health care spending will continue to spiral upward until the actual prices of drugs, tests and procedures are lower. Drug companies, health plans, hospitals, doctors and consumers must work together to lower drug costs. All North Carolinians deserve better quality care at lower costs, and more change in the system is needed to make this happen. Drug prices must decrease.” 
 
The BCBSA report, “Rising Costs for Patented Drugs Drive Growth of Pharmaceutical Spending in the US,” analyzes drug utilization from 2010-2017, including price changes and overall spending. According to the research, prescription drug spending increased 10 percent every year for Blue Cross and Blue Shield members across the nation over the past seven years, an overall rise of 73 percent.*
 
BCBSA attributes the upward cost trend to a small fraction of emerging patented drugs that are quickly gaining in popularity and large year-over-year price increases that are more than offsetting the continued growth in use of lower-cost generics. 
 
Key findings of the BSBCA research report include: 
 
· From 2010-2017, generic drugs increased from 66 percent to 82 percent of total prescriptions filled in the US, while brand drugs’ share of total prescriptions declined from 34 percent to 18 percent. The rising cost of brand drugs has allowed these prescriptions to maintain the vast majority of total drug spending, at 78 percent, roughly the same proportion brand drugs held in 2010.
 
· The cost of brand drugs with patent protection and no generic alternatives is rising at an average annual rate of 25 percent (and 285 percent since 2010), more than double the 10 percent average annual rate of spending for all drugs. These patent-protected drugs now make up 63 percent of total drug spending, up from 29 percent of total spending in 2010 – despite the fact that they make up less than 10 percent of total prescriptions filled.
 
· A list of the top 25 patent-protected drugs in terms of spending in 2015 shows dramatic increases in spending. 
 
This is the twelfth study of the Blue Cross Blue Shield Association, The Health of America Report series, a collaboration between the Blue Cross Blue Shield Association and Blue Health Intelligence, which uses a market-leading claims database to uncover key trends and insights into health care affordability and access to care.
 
* The report examines the medical claims of more than 30 million BCBS commercially-insured members per year (non-Medicare) and more than $208 billion in prescription spending from January 2010 through September 2016. Unit prices were computed as the total cost of the prescription divided by the days supplied, or the average daily price of the prescription.
 
About Blue Cross and Blue Shield of North Carolina:
Blue Cross and Blue Shield of North Carolina improves the health and well-being of our customers and communities through innovative health care products, insurance, services and information to more than 3.8 million members, including approximately 1 million served on behalf of other Blue Plans. Since 1933, we have worked to make North Carolina a better place to live through our support of community organizations, programs and events that promote good health. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Visit Blue Cross online at bluecrossnc.com. All other marks are the property of their respective owners.
 
About BHI:
Health Intelligence Company is the nation’s premier health intelligence resource, delivering data-driven insights about healthcare trends and best practices, resulting in healthier lives and more affordable access to safe and effective care. HIC accesses healthcare claims data from more than 140 million individuals nationwide, collected over nine years, in a safe, HIPAA compliant and 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. Health Intelligence Company, LLC operates under the trade name Blue Health Intelligence (BHI) and is an Independent Licensee of BCBSA. For more information, visit bluehealthintelligence.com/.
 
About the Blue Cross Blue Shield Association:
The Blue Cross and Blue Shield Association is a national federation of 36 independent, community-based and locally operated Blue Cross and Blue Shield companies that collectively provide health care coverage for one in three Americans. BCBSA provides health care insights through The Health of America Report series and the national BCBS Health Index. For more information on BCBSA and its member companies, visit BCBS.com. 
 
                                                                                                   ###