Express Scripts, Medco praise generics for drug trend slowdown

Drug Cost Management Report, July 11, 2003

Express Scripts reports that its first-quarter 2003 drug trend slowed to 11.3%, compared with 16.9% in the same quarter of 2002. The PBM attributes the deceleration to:

* Increased acceptance and utilization of generic drugs by members;

* A mild flu season, with fewer antihistamines and cough-and-cold remedies used;

* Reduced utilization of estrogen drugs for hormone replacement therapy due to publicity about safety concerns last year.

Of these factors, generic drug utilization has the greatest potential for continued impact on the drug trend, the PBM says. During the first quarter of 2003, 47% of all prescription claims processed by Express Scripts were for generic drugs, up from 43% a year earlier. Greater use of generic drugs reduced the dollar outlay for prescription drugs by 3.2% during the first quarter and, for all of 2002, by 2.1%.

Express Scripts says that brand-name drugs representing $32.3 billion in U.S. sales are due to expire in the next five years, including Monopril, Nolvadex, Cipro and Celexa (see figure 1, page 3).

Despite the impact of generic utilization, the trend in certain categories remained high. Express Scripts said spending on blood pressure medications increased by 10.6% during the first quarter, cholesterol medications rose by 14.1%, and diabetes meds by 14.5%.

For the entire year of 2002, Express Scripts reports prescription drug spending for its clients increased 18.5% to $585.60 per member per year, from $494.20 in 2001. The company forecasts a 15.5% increase in drug spending for 2003.

In its recently released "Drug Trend Report," Medco Health Solutions also cites generic opportunities in the coming years--for those plans that are proactive. Classes to watch include nonsedating antihistamines (NSAs) and selective serotonin reuptake inhibitor (SSRI) antidepressants.

Taking advantage of generic opportunities as they occur is imperative, say PBMs, because other factors will continue to boost spending on prescription drugs. Medco says drugs now in the pipeline may account for up to 40% of the drug trend in the next few years. According to Medco's report, there are some 166 new drug applications awaiting FDA approval, and as many as 111 of them are potential blockbusters--with expected sales of more than $500 million per year.

Information: Steve Littlejohn, Express Scripts, (314) 702-7173; and Anne Smith, Medco Health Solutions, (201) 269-5984.

Figure 1. Generic Drugs Approved During
2002

Brand                   Generic

Dilantin Kapseals       phenytoin
Glucophage              metformin
Adderall                mixed amphetamine salts

Ceftin                  cefuroxime
Tricor                  fenofibrate
Mircette                desogestrel/ethinyl
                        estradiol
Elocon ointment         mometasone
Ultram                  tramadol
Triphasil/Tri-Levlen    levonorgestrel/ethinyl
                        estradiol, triphasic
Zanaflex                tizanidine
Axid                    nizatidine
Augmentin               amoxicillin/clavulanate
Zestril/Prinivil        lisinopril
Ortho-Novum             norethindrone/ethinyl
                        estradiol
Adalat CC               nifedipine (extended
                        release)
Naprelan                naproxen sodium
                        controlled release)
Accutane                isotretinoin
Prilosec                omeprazole
Ortho Tri-Cyclen        norgestimate/ethinyl
                        estradiol, triphasic
Remeron                 mirtazapine

Brand                   Therapeutic Category

Dilantin Kapseals       seizure disorders
Glucophage              diabetes
Adderall                attention deficit
                        hyperactivity disorder
Ceftin                  antibiotic
Tricor                  cholesterol-lowering
Mircette                contraceptive

Elocon ointment         topical corticosteroid
Ultram                  analgesic (narcotic)
Triphasil/Tri-Levlen    contraceptive

Zanaflex                muscle relaxant
Axid                    antacid
Augmentin               antibiotic
Zestril/Prinivil        cholesterol
Ortho-Novum             contraceptive

Adalat CC               hypertension (calcium
                        channel blocker)
Naprelan                non-steroidal anti-
                        inflammatory drugs
Accutane                acne
Prilosec                antacid
Ortho Tri-Cyclen        contraceptive

Remeron                 antidepressant

Source: Medco Health Solutions, Drug Trend Report, May 2003.

Figure 2. Scheduled Patent Expirations With Significant Generic
Substitution Opportunity

Brand Name              Generic                Manufacturer

Accupril                quinapril              Pfizer
Norvasc                 amlodipine             Pfizer
Monopril                fosinopril             Bristol-Myers Squibb
Wellbutrin SR           bupropion              GlaxoSmithKline
Lotensin/Lotensin HCT   benazepril             Novartis
Paxil                   paroxetine             GlaxoSmithKline
Serzone                 nefazodone             Bristol-Myers Squibb
Neurontin               gabapentin             Pfizer
Cipro (pediatric)       ciprofloxacin          Bayer
Allegra                 fexofenadine           Aventis
Celexa                  citalopram             Forest Labs
Zoloft                  sertraline             Pfizer

                                                 Scheduled Patent
Brand Name                     2002 Revenue         Expiration

Accupril                       $538,000,000            2003
Norvasc                      $1,752,000,000            2003
Monopril                       $222,000,000            2003
Wellbutrin SR                $1,472,000,000            2003
Lotensin/Lotensin HCT          $350,000,000            2003
Paxil                        $2,195,000,000            2003
Serzone                        $257,000,000            2003
Neurontin                    $1,741,000,000            2003
Cipro (pediatric)            $1,016,000,000            2003
Allegra                      $1,364,000,000            2004
Celexa                       $1,430,000,000            2005
Zoloft                       $2,250,000,000            2005

Brand Name              Therapeutic Category

Accupril                hypertension
Norvasc                 hypertension
Monopril                hypertension
Wellbutrin SR           depression
Lotensin/Lotensin HCT   hypertension
Paxil                   depression
Serzone                 depression
Neurontin               seizure disorders
Cipro (pediatric)       antibiotic
Allegra                 allergies
Celexa                  depression
Zoloft                  depression

Source: Medco Health Solutions, Drug Trend Report, May 2003.