Spending on biotech drug prescriptions rising

Last Updated: 2007-04-25 16:54:55 -0400 (Reuters Health)

CHICAGO (Reuters) - Biotech drugs will comprise a quarter of all spending on prescription drugs in five years, driven by broader uses for cancer and arthritis treatments, according to a study released on Wednesday.

Spending on these so-called specialty drugs was about $54 billion in 2006 and is expected to rise to $99 billion by 2010, the report by pharmacy benefit manager Express Scripts Inc. said.

Biotech treatments, which are derived from naturally occurring proteins and often given by injection, are expected to make up 26 percent of total prescription spending in 2010, compared with about 20 percent in 2006, it said.

The increase is due largely to higher prices and new uses for drugs originally approved for rare conditions.

"You have more people taking these drugs for chronic, lifelong diseases, where in the past they were used at very late stages (of disease)," Express Scripts Vice President Brit Pim said. "Now you see people who are relatively young who may be taking a $1,000 per year drug for the rest of their lives."

Pim said employers are becoming more willing to use aggressive cost-curbing strategies for these drugs, such as requiring a doctor to get prior authorization for a prescription.

Spending on biotech drugs climbed 21 percent in 2006, compared with 6 percent growth for traditional chemical-based pharmaceuticals.

The report analyzed two samples of 3 million patient claims each, for 2005 and 2006. Cancer drugs had the biggest spending hike, growing by 39.5 percent, fueled by new treatments. Spending on multiple sclerosis drugs rose 19 percent, mostly on steeper prices.

Top drugs included $2.7 billion for Johnson & Johnson's Remicade for arthritis, and $3.7 billion for Celgene Corp.'s cancer drug Thalomid.

Express Scripts is one of three big companies that buy pharmaceuticals for U.S. employers and health plans.