Expensive Drugs To Weigh On U.S. Employers’ Expenses Next Year

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U.S. employers are preparing for higher health care expenses next year as spending on new drugs to treat diseases like cancer, multiple sclerosis and hepatitis C is anticipated to increase more than 7%, reported by a consulting firm Mercer. Roughly 40 to 50 new specialty drugs are predicted to hit the market each year through 2021, which could hike costs by $25 billion yearly, Mercer reported.

The survey’s preliminary findings indicate that spending on specialty drugs had increased by about 15 percent compared with prices that were factored into 2017 health plans. These types of drugs continue to drive up overall costs of prescription drugs.

“It’s not so much that the cost of any one drug is going up, but that new drugs are being introduced,” Beth Umland, Mercer’s research director for health and benefits reported.

There are currently 2,320 drugs in active development, the consultancy stated.

In August, Novartis AG (NOVN.S) won U.S. approval for the first of a new type of potent gene-modifying immunotherapy for leukemia, a $475,000 treatment that marks the beginning of a potential new treatment paradigm for some cancers.

“With so many new specialty drugs in the pipeline and few well-known brand-name drugs going off-patent in the near future, the drug cost problem will certainly get worse before it gets better,” Mercer’s U.S. health reform leader Tracy Watts quoted.


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Companies expect average per-employee health costs to hike by 4.3 percent in 2018, the highest rate since 2011. Early responses from the survey signal that 46 percent of employers would take steps to trim costs with new strategies such as high-deductible health plans – which moves the burden of initial medical costs to patients, but have lower monthly premiums.

These types of plans are quickly growing in popularity amid employers as they try to cap medical costs. Though, this trend has contributed to higher out-of-pocket spending on healthcare for employees.

The median per-employee cost growth is expected to increase 6 percent, if companies make no changes to their medical plans, the survey reported.


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