Commercial Total Trend measures the rate of change in total spend, which is driven by utilization and unit cost for the population covered by employers, health maintenance organizations, health insurers, union-sponsored benefit plans and third-party administrators.
COMPONENTS OF COMMERCIAL TREND, 2012–
Key Insights
- Annual trend was 2.7%, driven by higher drug costs for specialty medications, which represent 24.5% of total PMPY spend. Compared to 2011, 2012 utilization was up 0.6% while unit costs increased 2.1%.
- The impact of specialty drugs on PMPY spend and overall trend is expected to continue. The Food and Drug Administration (FDA) approved 22 new specialty medications in 2012, some with price tags worth tens of thousands of dollars per month. For information on other newly approved drugs, see New and Notable.
- Traditional drugs had an annual decline in cost and total trend, due to the effect of the patent cliff – the wave of blockbuster patent expirations for drugs in many of the top therapy classes. Greater availability of generic alternatives and increased competition decreased costs to both payers and patients.
Per Member Per Year