Hepatitis C pills drive surge in U.S. drug costs

Last Updated: 2015-03-10

By Ben Hirschler

(Reuters) - Highly effective but expensive new pills to treat hepatitis C drove a 13.1% increase U.S. prescription drug spending in 2014, the fastest rate of increase in more than a decade, according to Express Scripts.

The company, which is the biggest U.S. manager of pharmacy benefits and administers pharmaceutical care for many leading employers, has warned frequently about the runaway cost of new medicines now reaching the market.

Its 2014 drug trend report, released on Tuesday, showed that spending on specialty drugs, including conditions like cancer and multiple sclerosis as well as hepatitis C, made up more than 31% of drug expenditure last year.

"For the past several years, annual drug spending increases have been below the annual rate of overall healthcare inflation in the U.S., but that paradigm is shifting dramatically as prices for medications increase at an unprecedented and unsustainable rate," Glen Stettin, Express Scripts senior vice president of clinical, research and new solutions said in a statement.

The United States spent 743% more on hepatitis C drugs in 2014 than in 2013, according to Express Scripts, reflecting the arrival of new pills Harvoni (ledipasvir and sofosbuvir) and Sovaldi (sofosbuvir) from Gilead Sciences and Viekira Pak (ombitasvir/paritaprevir/ritonavir with dasabuvir) from Abbvie.

Upcoming innovations, including a wave of novel immune-system boosting cancer drugs and so-called PCSK9 inhibitors for high cholesterol, will continue to challenge U.S. healthcare providers, the company added.