New Study Finds Specialty Drug Spending Will Exceed $1,000 Per Person Annually By 2019

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Archimedes Reports On Expenditures Under The Pharmacy And Medical Benefits

Archimedes, LLC, a technology services company based in the Nashville, TN area and focused on improving the management of specialty drugs, today announced the release of a new study. Based on an analysis and projection of specialty drug trends and marketplace developments, Archimedes forecasts that specialty drug spending for commercially insured employees and their dependents will exceed $1,000 PMPY (per member per year) within the next three years.

The Archimedes publication reports a quantitative analysis of data on specialty drug expenditures under the pharmacy and medical benefits. Its growth estimates exceed earlier forecasts because of several market events whose full financial effects became evident only recently, including the extensive prescribing of extremely high-cost drugs to treat the hepatitis C virus, alarming rates of specialty drug price inflation, and lower than expected savings from biosimilars.

Archimedes analysts forecast that total specialty drug spending, including employer payments and enrollee out-of-pocket costs, will increase by an annual average of more than $100 PMPY from 2016 to 2020. These findings come at a time when plan sponsors are already struggling to pay the growing price tag for specialty drugs, which can exceed $100,000 per patient per year for some conditions.

“We are still early in this growth phase of specialty drug spending,” said Brenda Motheral, CEO of Archimedes, commenting on the study’s findings. “The challenge of rapidly increasing drug expense is compounded by the lack of transparency in the market. Employers need greater visibility into the costs, benefits, and value of medications in order to manage the specialty drug benefit effectively.”

In addition, the study report projects that the percentage of specialty drug cost incurred under the pharmacy benefit will increase from 60% in 2016 to 69% in 2020, largely because of the growing number of oral oncology drugs and higher inflationary trends for specialty drugs dispensed by pharmacies. As a result, spending on specialty drugs will increase by $356 PMPY in the pharmacy benefit, compared with only $69 PMPY in the medical benefit.

For added insights, the Archimedes report highlights strategies to better manage three of the key drivers of waste in specialty drug spend—clinically inappropriate use, unnecessary use of high-cost sites of care for infused medications, and drug price inflation.

To request a copy of the study, visit

About Archimedes

Archimedes is a healthcare technology and services company that helps payers, Taft-Hartley funds, and employers better control specialty drug costs. Archimedes is headquartered in Franklin, TN.

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Brenda Motheral, CEO
Archimedes, LLC
+1 (615) 418-7200
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