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Investor Presentaiton

P rescription drug spending has been a significant driver of overall spending growth in Rhode Island and across the United States. OHIC's analysis of Cost Pharmacy amounted to $1,223, representing 15 percent of TME (see Exhibit 2.4). To further explore statewide trends in Retail Pharmacy spending, OHIC analyzed claims data from 2017 through 2021 that are available through the Rhode Island All-Payer Claims Database (APCD), Health Facts RI. This chapter presents the results of these analyses. Drivers of Per Capita Spending Growth on Prescription Drugs From 2017 to 2021, spending on prescription drugs for those with commercial insurance, Medicaid, and Medicare coverage in Rhode Island increased an average of 4.4 percent annually, from $120 per member per month (PMPM) to $142 PMPM. This growth was fueled by spending on brand name drugs. Between 2017 and 2021, PMPM spending on brand name drugs grew by 28 percent. By comparison, PMPM spending on generic drugs decreased 9 percent over the same time frame (see Table 3.1). In 2021, brand-name drugs represented only 12 percent of all drugs dispensed, but account for 81 percent of drug spending (see Exhibit 3.1). Table 3.1: Per Member Per Month Spending on Retail Pharmacy for Rhode Island Residents with Commercial Insurance, Medicaid, or Medicare Advantage Coverage 2017 All Drugs $120 Brand Drugs Generic Drugs $90 $30 2018 $129 $99 $31 2019 $129 18.7% $100 27.8% $29 -9.2% 2020 $139 $109 $29 2021 $142 $116 $27 Average Annual Growth 4.4% 6.4% -2.3% Source: OHIC analysis of HealthFacts RI data. Medicare fee-for-service data are excluded. Exhbit 3.1: 2021 Utilization and Spending on Brand and Generic Drugs for Rhode Island Residents with Commercial Insurance, Medicare, or Medicare Advantage Coverage Share of Utilization Brand, 12% Share of Total Spending Generic, 19% Generic, 88% Brand, 81% Source: OHIC analysis of HealthFacts RI data. Medicare fee-for-service data are excluded. Units are defined as 30-day equivalent prescriptions. 16 Annual Report: Health Care Spending and Quality in Rhode Island
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