Spending on specialty medicines took a record rise in the U.S. last year, driven primarily by new drugs for hepatitis C, according to pharmacy benefits manager Express Scripts, which has been waging a war against the therapies’ costs.
Total prescription drug spending rose 13 percent in 2014, the biggest increase since 2003, Express Scripts said in a report Tuesday. Spending on specialty medicines, such as those for inflammatory diseases, multiple sclerosis and cancer—as well as hepatitis C—rose an unprecedented 31 percent.
Express Scripts, the largest pharmacy benefits manager in the U.S., has been at the forefront of a campaign against high drug prices for hepatitis C treatments such as Gilead Sciences‘ Sovaldi, which costs about $1,000 per day, or $84,000 for a 12-week course of treatment. In December, Express Scripts made a deal with Gilead’s competitor, AbbVie, to exclusively offer its drug on its largest plan, sending Gilead’s shares plummeting.
That move ignited a price war that culminated in early February, when Gilead shocked investors by announcing expected discounts of 46 percent on its hepatitis C drugs, Sovaldi and Harvoni, for 2015.
“The reality is, these are great new drugs that are coming to the market,” Express Scripts Chief Medical Officer Steve Miller said in a Tuesday interview on CNBC’s “Squawk Box.” “The trouble is it’s just not sustainable pricing. And so we have to do something to both bring the products to the marketplace, but also make it affordable for patients.”
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Spending on hepatitis C drugs, driven primarily by Gilead’s medicines, rose 743 percent last year, Express Scripts said. It forecast an increase of 67 percent in spending on that category this year, due to pricing-control strategies such as the one with AbbVie. The medicines mark a tremendous advance in the treatment of hepatitis C, curing most patients with drugs taken orally and with fewer side effects than older therapies that required injections.