Prime Therapeutics (Prime) today announces its 2024 Medicaid Pharmacy Trend Report. Now in its ninth edition, this publication is the leading pharmacy trend report for Medicaid Fee-for-Service (FFS) programs and, for the first time, is published exclusively under the Prime brand. 

The report shows there is a growing number of rare diseases that can now be effectively treated with one-time cell and gene therapies (CGTs). Currently there are 38 approved CGT products and dozens in the pipeline. While potentially life changing for patients, the often multimillion-dollar cost of CGTs can risk throwing Medicaid state budgets out of balance and impede states’ ability to fund appropriate health care for those using Medicaid. 

The solution for curative therapy cost: Value-based payment model 
To address states’ challenges, Prime launched Value Plus, the first multi-state value-based contracting (VBC) solution designed to help state Medicaid programs secure access to CGTs for patients while ensuring the cost of these therapies is linked to the value they provide. If health outcomes are not realized, the manufacturer will refund a portion of the cost of the drug back to the state, which helps minimize their financial exposure. This multi-state approach not only allows Prime to assist these states with negotiating and executing VBCs, but it also creates scalability and efficiency in addressing the lasting effectiveness of high-cost drugs. 

Real-world clinical and financial outcomes are fueling this type of value alignment’s rapid growth. Prime’s VBCs are unique and offer additional value to state Medicaid programs beyond traditional supplemental rebate contracts. By paying for only what works through VBCs, states can lower overall costs while helping members live healthier lives. 

For deeper insights into reinventing the current drug payment model in Medicaid, read Prime’s newly revised Medicaid pharmacy insights report, “The state of value-based contracting 2.0.” 

Additionally, the 2024 Medicaid Pharmacy Trend Report features the following Medicaid FFS key trends and insights. 

Overall drug cost trends 

• For the fourth year in a row, specialty drug trend accounted for more than half of total net drug spend but just 1.4% of pharmacy utilization. 
• In 2023, gross cost per claim rose 3.3% (+$5.16), while net cost per claim rose 6.9% (+$4.51). This year-over-year increase is substantially lower than the previous year's trend of 5.4% ($7.60) and 9.7% ($5.50) for gross and net spend, respectively. 
• The top two drug classes by net spend, HIV/AIDS and antipsychotics, switched positions this year but still accounted for more than 17.6% of the total net drug spend. As in 2022, the top five drug  classes accounted for almost 40% of total net spend. 

Cytokines/CAM antagonists had highest net-dollar impact among top five Medicaid classes 
The report takes a deeper look into the top 10 classes driving trend and highlights why they made an impact on the Medicaid program — especially the cytokines and cell adhesion molecule (CAM) antagonists class, which broke into the top five net drug spend classes for the first time this year. Like last year, cytokine and CAM antagonists had the highest net-dollar impact on 2023 trend, contributing $1.06 to the $4.51 (6.9%) increase in average net cost per claim. 

Weight loss drugs still driving up trend 
Weight loss management agents predictably landed in the top 10 therapeutic classes that drove net trend in 2023. With a 130% claim volume trend, weight loss therapies contributed $0.20 net-dollar impact on 2023 trend to the 18.4% net cost per claim trend. Weight loss agents in 2023 had a 172% total net spend trend. 

Prime’s expert analysis of FFS key trends and insights helps drive important conversations and strategic opportunities for managing Medicaid pharmacy programs in the coming years. Take a closer look at the report to see Medicaid forecasting and a pharmacy pipeline watch list and to better understand the budget impact of federal mandatory and supplemental rebates.