[Ip-health] Press Release: Generic Biotech Medicines Could Save Plan Sponsors and Patients $71 Billion
James Packard Love
james.love@keionline.org
Mon Feb 19 16:22:15 2007
http://phx.corporate-ir.net/phoenix.zhtml?c=69641&p=irol-
newsArticle_print&ID=963453
Generic Biotech Medicines Could Save Plan Sponsors and Patients $71
Billion
ST. LOUIS, Feb 15, 2007 (BUSINESS WIRE) -- Generic biotech medicines
could save U.S. plan sponsors and patients $71 billion over ten
years, with $3.5 billion of the savings occurring the first year,
according to a report issued by Express Scripts, one of the nation's
largest managers of pharmacy benefit plans.
Savings for plan sponsors could amount to $1,900 in the first year
for a multiple sclerosis patient with a therapy treatment that
includes biotech medicines.
"Given the savings potential for plan sponsors and the patient, we
believe it is critical that an approval pathway for generic biotech
medicines be established," says Steve Miller, Express Scripts chief
medical officer and vice president, specialty pharmacy.
A pathway for generic biotech medicines would be created with the
enactment of The Access to Life Saving Medicine Act of 2007, which is
sponsored by Senators Charles Schumer (D-NY), Hillary Rodham Clinton
(D-NY), David Vitter (R-LA) and Susan M. Collins (R-ME) and
Representatives Henry Waxman (D-CA) and Jo Ann Emerson (R-MO). Miller
says, "Express Scripts applauds and supports this important
legislation to make biotech drugs more affordable."
In addition to increased savings for plan sponsors and patients, the
use of generic medicines has been shown to lead to better outcomes
such as improved medication adherence for chronic conditions.
Most biotech medicines are injectable, infused, oral or inhaled and
generally require special handling along with close supervision and
monitoring of the patient's medication therapy. These medicines treat
chronic or complex illnesses that affect less than three percent of
the general population, but they come with a significant price tag --
these patients account for 25 - 30 percent of a company's overall
pharmacy costs.
Biotech medicines differ from traditional drugs in that they are
derived from living sources such as humans, animals or microorganisms
as opposed to drugs synthesized using chemical reactions in the lab.
The $71 billion savings potential could be achieved if the Food and
Drug Administration (FDA) were able to release guidelines for the
approval of generic biotech medicines. Without the guidelines,
generic manufacturers are unable to offer Americans the lower-cost
alternatives to brand biotech medicines.
Controlling the cost of biotech medicines, one of the fastest growing
segments of health care, is a top priority for employers, insurers
and the federal government. Spending for biotech medicines in the
U.S. is expected to reach $90 billion in 2009. Increasing the use of
generics is a proven tool in decreasing costs.
The report's conclusions were based on a review of four biotech
medicine therapy classes for which key patents have already expired.
The therapy classes represent medicines used to treat multiple
sclerosis, anemia, growth hormone deficiencies, and diabetes.
The largest estimated savings of $40.7 billion over ten years is
found in erythropoietins, the class of medicines used to treat
anemia. There are 350,000 dialysis patients and 450,000 oncology
patients using erythropoietins.
There are 15 million Americans diagnosed with diabetes. More than 25
percent of the market could move to a generic biotech medicine and
save $797 million in the first year.
Fifty percent of the 320,000 multiple sclerosis patients treated with
interferons could move to a generic biotech medicine and achieve a
$678 million savings in the first year.
Generic biotech medicines could be used to treat 80 percent of
patients with a growth hormone deficiency, leading to $27.7 million
in first year savings.
The report also includes an analysis of savings for each state and
the District of Columbia. Twenty-six states would save more than $1
billion dollars over a ten year period with California and New York
achieving the greatest savings of $7.7 and $5.8 billion respectively.
The Express Scripts analysis used a conservative discount of 25
percent off the branded equivalent medicine. This is consistent with
the discount on the biotech medicine somatropin, which was released
last year in Europe. The analysis is also based on an 83 percent
generic market share and a 15 percent annual increase in biotech
medicine costs, which is consistent with industry forecasts.
Both the discount and the generic biotech medication fill rate are
more conservative numbers than used for traditional drugs where a 95
percent market share can be achieved and, on average, a generic drug
costs approximately 60 percent less than a brand name drug.
Additionally, the analysis assumes that once the FDA guidelines are
issued, generic biotech medicine manufacturers would quickly begin
production and distribution. To view a copy of the study go to:
http://www.express-scripts.com/ourcompany/news/outcomesresearch/
onlinepublications/ . (Due to its length, this URL may need to be
copied/pasted into your Internet browser's address field. Remove the
extra space if one exists.)
10-year Savings by Therapy Class
----------------------------------------------------------------------
Multiple Growth
Year Sclerosis Erythropoietins Hormone
--------------------- ---------------- ---------------- --------------
1 $678,107,580 $2,004,260,421 $27,657,855
--------------------- ---------------- ---------------- --------------
2 $779,823,717 $2,304,899,484 $31,806,533
--------------------- ---------------- ---------------- --------------
3 $896,797,274 $2,650,634,407 $36,577,513
--------------------- ---------------- ---------------- --------------
4 $1,031,316,865 $3,048,229,568 $42,064,140
--------------------- ---------------- ---------------- --------------
5 $1,186,014,395 $3,505,464,003 $48,373,761
--------------------- ---------------- ---------------- --------------
6 $1,363,916,554 $4,031,283,603 $55,629,825
--------------------- ---------------- ---------------- --------------
7 $1,568,504,037 $4,635,976,144 $63,974,298
--------------------- ---------------- ---------------- --------------
8 $1,803,779,643 $5,331,372,565 $73,570,443
--------------------- ---------------- ---------------- --------------
9 $2,074,346,589 $6,131,078,450 $84,606,010
--------------------- ---------------- ---------------- --------------
10 $2,385,498,578 $7,050,740,217 $97,296,911
--------------------- ---------------- ---------------- --------------
Total $13,768,105,231 $40,693,938,861 $561,557,288
--------------------- ---------------- ---------------- --------------
10-year Savings by Therapy Class
----------------------------------------------------------------------
Year Insulin Total
----------------------------------- ----------------- ----------------
1 $797,059,877 $3,507,085,732
----------------------------------- ----------------- ----------------
2 $916,618,859 $4,033,148,592
----------------------------------- ----------------- ----------------
3 $1,054,111,687 $4,638,120,881
----------------------------------- ----------------- ----------------
4 $1,212,228,440 $5,333,839,013
----------------------------------- ----------------- ----------------
5 $1,394,062,706 $6,133,914,865
----------------------------------- ----------------- ----------------
6 $1,603,172,112 $7,054,002,094
----------------------------------- ----------------- ----------------
7 $1,843,647,929 $8,112,102,409
----------------------------------- ----------------- ----------------
8 $2,120,195,119 $9,328,917,770
----------------------------------- ----------------- ----------------
9 $2,438,224,386 $10,728,255,435
----------------------------------- ----------------- ----------------
10 $2,803,958,044 $12,337,493,751
----------------------------------- ----------------- ----------------
Total $16,183,279,161 $71,206,880,541
----------------------------------- ----------------- ----------------
10-Year Savings by State
----------------------------------------------------------------------
State Savings State Savings
----------------------------------- ----------------------------------
California $7,715,778,789 South Carolina $951,990,002
----------------------------------- ----------------------------------
New York $5,838,087,017 Oregon $800,330,633
----------------------------------- ----------------------------------
Texas $4,873,089,817 Oklahoma $762,586,938
----------------------------------- ----------------------------------
Florida $4,324,688,078 Iowa $695,314,621
----------------------------------- ----------------------------------
Pennsylvania $3,407,429,578 Kansas $643,970,417
----------------------------------- ----------------------------------
Ohio $2,985,859,433 Mississippi $635,709,705
----------------------------------- ----------------------------------
Illinois $2,974,175,774 Arkansas $592,763,131
----------------------------------- ----------------------------------
Michigan $2,243,581,980 Nevada $483,913,418
----------------------------------- ----------------------------------
New Jersey $2,239,246,247 West Virginia $465,977,176
----------------------------------- ----------------------------------
Massachusetts $2,068,874,768 Nebraska $447,538,902
----------------------------------- ----------------------------------
North Carolina $2,032,819,727 Utah $446,717,395
----------------------------------- ----------------------------------
Georgia $1,888,873,398 Maine $364,475,390
----------------------------------- ----------------------------------
Virginia $1,634,206,146 New Mexico $364,018,997
----------------------------------- ----------------------------------
Tennessee $1,531,791,574 New Hampshire $317,558,197
----------------------------------- ----------------------------------
Indiana $1,504,134,163 Rhode Island $313,405,022
----------------------------------- ----------------------------------
Missouri $1,497,379,547 Hawaii $288,896,721
----------------------------------- ----------------------------------
Washington $1,472,004,101 District of Columbia $276,939,227
----------------------------------- ----------------------------------
Wisconsin $1,425,360,744 Idaho $262,791,046
----------------------------------- ----------------------------------
Minnesota $1,418,971,243 Delaware $240,336,514
----------------------------------- ----------------------------------
Maryland $1,388,575,474 Montana $208,662,845
----------------------------------- ----------------------------------
Arizona $1,111,088,576 South Dakota $200,447,773
----------------------------------- ----------------------------------
Louisiana $1,086,169,522 Alaska $192,552,175
----------------------------------- ----------------------------------
Alabama $1,080,418,971 North Dakota $180,183,927
----------------------------------- ----------------------------------
Kentucky $1,031,995,682 Vermont $164,347,092
----------------------------------- ----------------------------------
Colorado $1,023,004,741 Wyoming $105,016,012
----------------------------------- ----------------------------------
Connecticut $1,002,832,174
----------------------------------------------------------------------
Express Scripts, Inc. (Nasdaq: ESRX) is one of the largest pharmacy
benefit management (PBM) companies in North America, providing PBM
services to over 55 million patients through facilities in 13 states
and Canada. Express Scripts serves thousands of client groups,
including managed-care organizations, insurance carriers, third-party
administrators, employers and union-sponsored benefit plans. Express
Scripts is headquartered in St. Louis, Missouri. More information can
be found at http://www.express-scripts.com.
SOURCE: Express Scripts, Inc.
Express Scripts Inc., St. Louis
Media: Rita Holmes-Bobo, 314-702-7584
rholmesbobo@express-scripts.com