Cancer drug use and spending to rise sharply by 2013

-- Medco Drug Trend Report forecasts growth of 34-42 percent for cancer drugs during next three years

--Oncology drug inflation reaches 11.5 percent during 2010

ORLANDO, Fla., May 18, 2011 - Expensive new cancer drugs treating increasing numbers of patients could drive cancer drug spending by as much as 15 percent a year through 2013. At this accelerated rate, oncology drugs will likely rise to the second or third largest trend-driving category by 2015, following only diabetes and central nervous system (CNS) treatments, according to the newly released 2011 Medco Drug Trend Report which tracks utilization and spending.

Although the incidence of some types of cancers may be decreasing, with better detection the overall numbers of cancers reported in an aging population has increased significantly. Fortunately, due to advanced treatment, the number of U.S. cancer survivors is expected to increase by more than 30 percent -- from 13.8 million in 2010 to 18 million by 2020.

This has heightened demand for oncology specialty drugs - targeted therapies that have increased 6.7 percent according to the report by Medco Health Solutions, Inc. (NYSE:MHS). The drug trend for specialty cancer treatments reached 21.2 percent, due primarily to unit cost increases of 13.7 percent.

"New cancer drugs reaching the market are expected to double during the next several years," said Dr. Glen Stettin, Medco's chief medical officer. "Early diagnosis, evidence-based treatment and enhanced coordinated care have essentially turned some forms of the condition into chronic illnesses that can be managed longer-term. Continued innovation, including companion diagnostic or pharmacogenomic testing, can help ensure the right person is getting the right drug at the proper dose and reduce waste. However, due to the high cost and extended time patients may need for treatment, using these latest design management tools is paramount."

With the use of many newly introduced specialty drugs reaching market in recent years, oncology drug price inflation surged to 11.5 percent during 2010. Higher prescribing for newer treatments such as Revlimid® (lenalidomide) for multiple myeloma and Gleevec® (imatinib mesylate), a tablet for chronic myeloid leukemia and gastrointestinal stromal tumors drove sharp increases in trend. More than 90 percent of anti-cancer drugs approved since 2004 cost more than $20,000 for a 12-week course of therapy, according to the Journal of the National Cancer Institute.

Many of these newer treatments are oral medications or can be self administered, changing the dynamic of cancer care delivery toward the home, rather than in physician's office or infusion center. This dynamic shows no signs of abating.

"It's an exciting time in the area of cancer treatment, but as these new, targeted treatments come to market it is vital to ensure that each patient and caregiver understands the importance of adherence and the detailed dosing instructions associate with them," said Dr. Milayna Subar, national practice leader for the Medco Oncology Therapeutic Resource CenterTM. "Helping patients manage the unique needs of their disease across the continuum of care with specialists and a personalized medicine program will help to improve outcomes for the patient and could help to manage down the projected drug trend of 15-17 percent for these new specialty medications."

Stettin added: "The emergence of biosimilar drugs will help mitigate some of the costs of specialty drugs, when they start to reach the marketplace in or around 2013. We are already working with employers and other health plan providers to prepare for these fast-approaching future trends."

2010 Drug Trend: 3.7 Percent
Higher generic drug dispensing helped limit prescription drug spending growth to 3.7 percent during 2010, the report also revealed. In 2010, more than 71 percent of the prescription drugs dispensed were for generics. In fact, Medco, during its second quarter earnings reported that the generic dispensing rate had reached a record 73 percent. Generic drugs had a limited inflation rate of 0.5 percent and served as a lever to control overall prescription drug costs during 2010, the report said. Drug utilization during 2010 increased 2.1 percent, which is the highest rate of growth since 2005 when it was 2.7 percent.

Specialty drugs, which are largely brand-name biologics, accounted for 70.1 percent of overall drug trend. Both utilization and unit costs increased for these medicines, which treat rheumatoid arthritis, multiple sclerosis, cancer, and an array other conditions, including rare diseases such as hemophilia and pulmonary arterial hypertension.

"We have helped our clients adapt to these changes in the pharmaceutical market by advising them to take advantage of the savings provided by generics and mail order, both of which serve to counter the cost of brand name and specialty drugs," said Medco Chairman and CEO David B. Snow Jr. "Our clients have benefited from relatively modest increases in pharmacy spending, as well as use of the Medco Therapeutic Resource CentersTM and personalized medicine to improve patient outcomes and mitigate medical costs."

Diabetes drugs - the leading trend driver
For the fourth consecutive year, diabetes medications were the largest therapeutic category of drugs for driving overall spending growth. The drug trend for this group, which includes insulin, hypoglycemic drugs, glucose-elevating agents and supplies, was 7.6 percent. However, the large number of patients with diabetes led this category to contribute nearly 17 percent of the overall growth in drug spending last year. Unit costs for these medicines increased 5 percent and utilization increased 2.5 percent.

"Demand for these diabetes drugs as a category remains unabated as America struggles with what has become a worldwide epidemic," Stettin said. "The number of people in the U.S. being treated for diabetes is expected to increase from nearly 25 million today to 44 million by 2035. Lifestyle changes, especially diet and exercise, need to be emphasized in order to address the financial and health care burden brought about by this disease."

Respiratory, rheumatological, neurological and ADHD drugs were other key categories for driving spending growth. Generic versions of treatments for migraines, seizures and ulcers helped moderate prescription spending. Cancer treatments ranked seventh among the key drivers of costs for pharmacy benefit plans, but much of the costs for these drugs are not reflected in the Medco Drug Trend Report, since these treatments are often covered under major medical benefits.

To view the 2011 Medco Drug Trend Report, please visit www.drugtrendreport.com.

About Medco
Medco Health Solutions, Inc. (NYSE: MHS) is pioneering the world's most advanced pharmacy® and its clinical research and innovations are part of Medco making medicine smarterTM for approximately 65 million members.

With more than 20,000 employees worldwide dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2010 revenues of $66 billion, Medco ranks 34th on the 2011 Fortune 500 list and is named among the world's most innovative, most admired and most trustworthy companies.

For more information, go to http://www.medcohealth.com.

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