Trends in annual drug expenditure – a 16 year perspective of a public healthcare maintenance organization

Abstract

BackgroundModern drug therapy accounts for a major share of health expenditure and challenges public provider resources. The objective of our study was to compare drug expenditure trends for ten major drug classes over 16 years at Maccabi Healthcare Services (MHS), the 2nd largest healthcare organization in Israel.MethodsA retrospective analysis of drug expenditure per HMO beneficiary between the years 1998–2014. Trends in annual mean drug expenditures per MHS member were compared among 10 major drug classes.ResultsAverage annual drug expenditure per beneficiary increased during the study period from 429.56 to 474.32 in 2014 (10.4 %). Ten drug classes accounted for 58.0 % and 77.8 % of total drug cost in 1998 and 2014, respectively. The overall distribution of drug expenditure among drug classes differed significantly between 1998 and 2014 (p < 0.001), mainly due to the increase in expenditure for cancer drugs, from 6.8 % of total drug cost to 30.3 %. In contrast, expenditures for cardiovascular drugs decreased during the same period from 16.0 to 2.7 %. Moreover, the median annual increase in net drug costs per HMO member during 1998–2014 was largest for cancer drugs (NIS 6.18/year; IQR, 1.70–9.92/year), about two-fold that of immunosuppressants, the second fastest growing drug class (NIS 2.81; IQR, 0.58–7.43/year).ConclusionsThe continuous rise in anti-cancer drug expenditure puts a substantial burden on the medication budgets of public health organizations. Coordinated measures involving policy makers, physicians, and pharmaceutical companies will be required for efficient cost containment.

The insurability of innovative pharmaceutical cancer technologies

“…Medicare must then, by law, provide any technologies that has FDA approval, thus weakening the ability to negotiate with pharmaceutical companies in order to lower costs. Furthermore, Lomnicky et al [ 4 ] found that even when a health plan is widely implementing cost containment methods its expenditure on cancer care technologies rises significantly over time.…”

“…Over the years, the number of drugs in Israel with a price of over NIS 10,000 per package has grown significantly, as has the average price of drugs [ 3 ]. Lomnicky et al [ 4 ] compared the trends in drug expenditure by the Maccabi Health Services over a 16-year period and found that while cancer drugs accounted for only 6.8% of its total drug expenditure in 1998, their proportion rose steadily over time to 30.2% in 2014, making them Maccabi’s largest single drug class expenditure. They explain this increase as being due to the increasing number of approvals for high-priced biological and targeted cancer therapies (such as monoclonal antibodies and modern tyrosine kinase inhibitors).…”

“…In their comment on Lomnicky et al [ 4 ], Goldstein et al [ 5 ] discuss some of the problems and future challenges that will arise from the growing costs of cancer care and in particular cancer drugs. The researchers conclude that with the arrival of new therapies, the future of cancer care is promising, but that it will challenge the ability to pay for treatment.…”

The IJHPR celebrates five years of quality publication

“…The topics covered include: the national initiative to increase health care equity [3], the pediatric dental reform [4], medical education [5, 6], advanced practice providers [7], tobacco control [8], and growing pharmaceutical expenses [9, 10]. In addition, since our last editorial [11] (December 2014), the IJHPR has published its first article by a Nobel Prize laureate [12], and its first contributions from China [13] and India [14].…”

“…The first such symposium will be on the growing expenditures on cancer medications and the program will include presentations by authors of the relevant IJHPR articles [9, 10, 16, 17], along with presentations from Israeli health care leaders who are grappling with this issue.…”