Obamacare plans' drug spending rose faster than other plans in 2016: Express Scripts

(Reuters) - Spending on prescription drugs for health plans created under the Affordable Care Act increased last year at a rate more than three times that of other commercial plans and most government-run plans managed by Express Scripts Holding Co.

FILE PHOTO - The federal government forms for applying for health coverage are seen at a rally held by supporters of the Affordable Care Act, widely referred to as "Obamacare", outside the Jackson-Hinds Comprehensive Health Center in Jackson, Mississippi, U.S. on October 4, 2013. REUTERS/Jonathan Bachman/File Photo

Express Scripts, the largest manager of prescription drug plans for U.S. employers, on Tuesday said year-over-year spending per person for individual insurance plans sold on the Obamacare exchanges where it manages the pharmacy benefit rose 14 percent in 2016, driven by higher drug prices and utilization.

Express Scripts said per-capita spending for other commercial plans it manages, mostly for employers, rose just 3.8 percent last year, despite an 11 percent increase in list prices for brand-name drugs.

Drug spending for plans the company manages under Medicare, the federal government health plan for seniors and disabled, increased 4.1 percent last year while the rise for Medicaid, the government plan for the poor, was 5.5 percent.

Prescription medications for chronic, costly conditions drove drug benefit usage with high-cost specialty medications - including drugs for HIV and inflammatory conditions - accounting for nearly half of total drug spending for exchange plans, the company said.

President Donald Trump and congressional Republicans have vowed to repeal and replace the Affordable Care Act, former President Barack Obama’s signature piece of domestic policy known as Obamacare, but have not yet released details. Last year was the third full year of operation for the exchanges.

Drug pricing has become a lightning rod for criticism with several drugmakers under federal investigations for sharp price increases.

Pharmacy benefit managers like Express Scripts have taken an increasingly aggressive stance in price negotiations with drugmakers, often extracting discounts and after-market rebates in exchange for including medicines in their formularies with low co-payments. But they have also been criticized by pharmaceutical companies, which say they add to their product costs.

Express Scripts said exchange plans, to remain more competitive, tend to have more inclusive formularies than other commercial plans.

“Drug policy is always complicated,” said Express Scripts Chief Medical Officer Steve Miller. “New people coming into CMS (Centers for Medicare & Medicaid Services) and FDA (Food and Drug Administration) will hopefully be able to embrace changes.”

Reporting By Deena Beasley; Editing by Cynthia Osterman