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1 EXPRESS SCRIPTS june 21

2 THE BOTTOM LINE Per member per year (PMPY) Average Wholesale Price (AWP) ingredient costs rose by 16.2 percent in 2. This marks the first time since Express Scripts began monitoring drug cost trends in 1993 that the annual rate of PMPY drug cost increase slowed from the previous year. Over the next five, it is projected that PMPY drug costs will increase by 81 percent. Acknowledgements: The authors owe special thanks to the following people who provided substantial input and comments: Brian Ellis, BS ; Michelle Farmer, PharmD; Raulo Frear, PharmD; Mark Frisse, MD; Andrew Goggin, MD; Doug Mager, BS; Chris Peterson, PharmD; Mark Roddy, MHA, CPA; Trey Springer, CPhT; Yakov Svirnovskiy, MA; Regina Thompson, BA; Belinda Wilkins; and Clinical Services staff.

3 EXPRESS SCRIPTS 2 Drug Trend report june 21 Fred Teitelbaum, PhD Ruth Martinez, RPh Andrew Parker, MBA Rochelle Henderson, MPA Brian Kolling, PharmD Catherine Roe, PhD Sandy Ellis, RPh Express Scripts, Inc. June 21 All Rights Reserved

4 TABLE OF CONTENTS II VI PREFACE 1 INTRODUCTION 3 SUMMARY OF FINDINGS 3 Between 1996 and 2 4 Between 1999 and Through 25 Projections 5 METHODS 7 TRENDS IN EXPENDITURES FOR PRESCRIPTION DRUGS 8 Changes in Common Drug Costs Between 1998 and 1999; Utilization of Common Drugs 12 AWP Ingredient Cost Per Prescription 13 Inflation 16 Therapeutic Mix and Strength Mix 2 Units per Rx 21 New Drugs 25 2 DRUG COST TREND FORECAST 39 THE GROWING IMPORTANCE OF PRESCRIPTION DRUGS IN DISEASE TREATMENT 51 ACTIONS TO MITIGATE IMPACT OF COST TREND PER PRESCRIPTION 51 Actions Aimed at Controlling Per Prescription Costs 52 Reducing Utilization of Prescription Drugs 52 Reducing Per Prescription Costs and Utilization 57 Defined Benefit Contribution and Member Choice 59 APPENDIX A: DRUG THERAPY CLASS REVIEW 61 Gastrointestinals 64 Central Nervous System 7 Inflammation and Pain Management 78 Cardiovascular 86 Respiratory 93 Anti-Infectives 13 Women s Health 19 Dermatologicals 111 Antidiabetics 115 Anticancer EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 123 APPENDIX B: DRUG UTILIZATION AND COST BY SEX AND AGE 124 Methods 134 Utilization of Each Therapy Class by Sex and Age 134 Gastrointestinals 135 Central Nervous System 136 Cardiovascular 139 Inflammation and Pain Management 141 Respiratory 143 Anti-Infectives 145 Women s Health 146 Other TABLES 7 TABLE 1: Components of Per Member Per Year AWP Cost Trend TABLE 2: Utilization of Common Drugs of Top 25 Therapy Classes Ranked by 2 Rxs Per Member Per Year 14 TABLE 3: Price Changes Due to Inflation of Top 25 Therapy Classes Ranked by Percent Change in Price 15 TABLE 4: Price Changes for Top 5 Common Brand Drugs TABLE 5: Price Changes Due to Mix of Top 25 Therapy Classes TABLE 6: Price Changes Due to Changes in Units Per Prescription , Top 25 Therapy Classes by Prescriptions in 2 22 TABLE 7: Top New Drugs in 2 24 TABLE 8: Percent of 2 Cost and AWP Cost Per Prescription for Top 5 New Drugs 28 TABLE 9: Drug Trends: All Drugs Summary and Forecast 46 TABLE 1: Percent Change in Per Member Per Year Covered Charges for Drugs and Other Medical Services for Selected Medical Conditions 6 TABLE A1: Cost Per Prescription and Per Member Per Year Cost for Major Therapy Classes, TABLE B1: Most Frequently Used Therapy Classes by Sex 126 TABLE B2: Most Frequently Used Therapy Classes by Age 127 TABLE B3: Most Frequently Used Therapy Classes by Sex and Age 13 TABLE B4: Overall Drug Utilization by Sex and Age 131 TABLE B5: Percent of Total AWP, Mean AWP Per Prescription and Percent Change in Mean AWP Prescription by Sex and Age Groups III

5 FIGURES 1 FIGURE 1: National Health Expenditures as a Percent of GDP and Percent of Population 65 and Older, FIGURE 2: Average Annual Percentage Growth from Previous Year 7 FIGURE 3: Per Member Per Year AWP Costs FIGURE 4: Percent of AWP Change Attributed to Inflation, Units, Theraputic Mix and Strength Mix FIGURE 5: Impact of New Drugs Introduced Since 1992 on 2 Utilization and Cost 23 FIGURE 6: Percent of AWP Accounted for by New Drugs 26 FIGURE 7: Per Member Per Year AWP FIGURE 8: Percent Change in PMPY AWP Cost FIGURE 9: Prescription Drugs, Hospital Care and Physician and Clinical Services as a Percentage of National Healthcare Expenditures FIGURE 1: Summary Changes in Treatments for Selected Diseases 45 FIGURE 11: Per Member Per Year Covered Charges for Drugs and Other Medical Services FIGURE 12: Length of Treatment in Any Prescription in Selected Therapy Classes 53 FIGURE 13: Increases in Average Prescription Cost From 1996 to 2 by Therapy Class 56 FIGURE 14: Generic Fill Rate and Generic AWP per Prescription for Selected Therapy Classes 2 62 FIGURE A1: Therapy Class Drug Market Share Trend Gastrointestinals 67 FIGURE A2: Therapy Class Drug Market Share Trend Antidepressants 69 FIGURE A3: Therapy Class Drug Market Share Trend Antianxiety Agents 71 FIGURE A4: Therapy Class Drug Market Share Trend Anti-Rheum (NSAIDS and COX-2s) 73 FIGURE A5: Therapy Class Drug Market Share Trend Narcotic Analgesics 75 FIGURE A6: Therapy Class Drug Market Share Trend Migraine Products 76 FIGURE A7: Therapy Class Drug Market Share Trend Anticonvulsants 8 FIGURE A8: Therapy Class Drug Market Share Trend Antihypertensives 81 FIGURE A9: Therapy Class Drug Market Share Trend Calcium Blockers 82 FIGURE A1: Therapy Class Drug Market Share Trend Beta Blockers 84 FIGURE A11: Therapy Class Drug Market Share Trend Antihyperlipidemics 87 FIGURE A12: Therapy Class Drug Market Share Trend Antiasthmatics 89 FIGURE A13: Therapy Class Drug Market Share Trend Antihistamines 91 FIGURE A14: Therapy Class Drug Market Share Trend (Decongestants) Nasal Steroids 92 FIGURE A15: Therapy Class Drug Market Share Trend Cough/Cold 96 FIGURE A16: Therapy Class Drug Market Share Trend Cephalosporins 97 FIGURE A17: Therapy Class Drug Market Share Trend Macrolides 98 FIGURE A18: Therapy Class Drug Market Share Trend Penicillins IV EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 99 FIGURE A19: Therapy Class Drug Market Share Trend Antivirals 14 FIGURE A2: Therapy Class Drug Market Share Trend Oral Contraceptives 16 FIGURE A21: Therapy Class Drug Market Share Trend Estrogens 17 FIGURE A22: Therapy Class Drug Market Share Trend Miscellaneous Endocrines 19 FIGURE A23: Therapy Class Drug Market Share Trend Dermatologicals 112 FIGURE A24: Therapy Class Drug Market Share Trend Oral Hypoglycemics 113 FIGURE A25: Therapy Class Drug Market Share Trend Insulins 118 FIGURE A26: Therapy Class Drug Market Share Trend Anticancer 13 FIGURE B1: Percent of Prescriptions Filled by Members of Each Sex and Age Category 132 FIGURE B2: Mean AWP Percent Change from 1999 to 2 by Sex and Age 134 FIGURE B3: Gastrointestinals 135 FIGURE B4: Antidepressants 135 FIGURE B5: Antianxiety Agents 136 FIGURE B6: Antihypertensives 136 FIGURE B7: Calcium Blockers 137 FIGURE B8: Beta Blockers 138 FIGURE B9: Antihyperlipidemics 139 FIGURE B1: Anti-rheumatics 139 FIGURE B11: Narcotic Analgesics 14 FIGURE B12: Migraine Products 141 FIGURE B13: Antiasthmatics 141 FIGURE B14: Antihistamines 142 FIGURE B15: Decongestants 142 FIGURE B16: Cough/Cold Products 143 FIGURE B17: Penicillins 143 FIGURE B18: Cephalosporins 144 FIGURE B19: Macrolides 145 FIGURE B2: Oral Contraceptives 145 FIGURE B21: Estrogens 146 FIGURE B22: Dermatologicals 147 FIGURE B23: Antidiabetics 148 FIGURE B24: Anticancer 148 FIGURE B25: Antivirals 149 FIGURE B26: Anticonvulsants 15 FIGURE B27: Antifungals V

6 PREFACE DEAR READER, Few industries enjoy the excitement and inherent value of the pharmaceutical industry nor do most sectors of the economy grow as rapidly. Prescription-drug development leads the way in healthcare today both in innovation and in cost increases. This year s Drug Trend Report analyzes the complex dynamics producing the continuing increase in prescription drug costs. The factors driving trend price inflation, the changing mix of drugs taken, units per prescription, increased usage and new therapies remain the same. In 2, drug trend increased at a rate of 16.2 percent, slightly lower than in 1999; 2 was the first time this has decreased since Express Scripts began measuring drug trend. The continued escalation of drug costs is leading plan sponsors to adopt three-tier copay plans and to evaluate other cost-management approaches such as defined-contribution benefits multiple-plan offerings that require members to choose among several drug plans with different levels of coverage and corresponding member contributions. Perhaps most importantly, this year s Drug Trend Report adds a new chapter discussing the relationship between drug costs and medical costs both in the aggregate and for selected chronic conditions. Whether increased drug costs are associated with decreased medical costs is a hotly debated topic. Express Scripts data suggest that drugs may replace the costs of selected medical services in certain circumstances. However, these data also indicate that, for a variety of reasons, it is difficult to adequately measure the impact that prescription drugs has on other medical costs. We see improved patient care as the primary value of higher drug expenses and it is to this value that Express Scripts will direct future research. Faced with high drug and medical expenses, plan sponsors (HMOs, employers and insurance carriers) must determine how they assess the benefits versus the costs of different drug classes and decide whether this value is adequately reflected in their plan designs. Sincerely, Barrett A. Toan Chairman and Chief Executive Officer VI EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

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8 INTRODUCTION BACKGROUND Election politics brought heightened attention to the conundrum of high and ever-increasing prescription drug costs. On one hand, prescription drugs are playing a more critical role in disease treatment, a trend that will be discussed in more detail later in this report. On the other hand, the costs of prescription drugs have outpaced the ability of many uninsured people, primarily the elderly, to pay for their medications, and, indeed, the capacity of many companies to shoulder the growing costs of health insurance premiums. Healthcare expenditures in general, and spending on prescription drugs in particular, have grown significantly in recent. Between 198 and 199, national health expenditures as a percentage of Gross Domestic Product (GDP) grew by almost three-fourths from 8.8 percent to 12 percent (see Figure 1). It is estimated that this share grew to 13.1 percent in 2 and is projected to rise to 15.9 percent in 21. The magnitude of these increases has outstripped the aging of the population, indicating that rising healthcare expenditures are attributable to more than simply the graying of America. FIGURE 1 NATIONAL HEALTH EXPENDITURES AS A PERCENT OF GDP AND PERCENT OF POPULATION 65 AND OLDER National Health Expenditures as a percentage of GDP Percentage of US Population Age 65 and Older Source: Health Care Financing Administration 1, U.S. Census Bureau 2 1 Health Care Financing Administration, Office of the Actuary: National Health Statistics Group; U.S. Department of Commerce, Bureau of Economic Analysis. Table1: National Health Expenditures and Selected Economic Indicators, Levels and Annual Percent of Change: Selected Calendar Years National Health Care Expenditures Projections Tables. Published March 2, Accessed March, U.S. Census Bureau ,198 Census of Population, General Population Characteristics, United States Summary (PC8-1- B1); 199, 199 Census of Population, General Population Characteristics, United States Summary (CP-1-1); and 2-25, Population Projections of the United States by Age, Sex, Race, Hispanic Origin, and Nativity: 1999 to 21. Published January 2, Accessed March,

9 As shown in Figure 2, since , the annual rate of increase in prescription drug expenditures exceeded the growth rate of overall health expenditures. By , the annual rate of increase in prescription drug expenditures grew 179 percent faster than overall health expenditures and between 1998 and 1999 by 22 percent faster. HCFA actuaries project that the annual rise in prescription drug costs will peak at 17.4 percent in 2 before the rate of growth gradually declines to 1.3 percent in 21. In contrast, the annual growth rate in total national health expenditures is expected to peak at 8.6 percent in 21 and gradually decline to a 6.4 percent growth rate in 21. FIGURE 2 AVERAGE ANNUAL PERCENTAGE GROWTH FROM PREVIOUS YEAR Source: Healthcare Financing Administration 1991 National Health Expenditures 1992 The impact of these dramatic increases in prescription drug costs on the elderly was manifested during the 2 election season. Presidential and Congressional candidates from both parties talked about the plight of the elderly who cannot afford to pay for their medications. Some candidates escorted their elderly constituents to Canada and Mexico where prescription drugs are less expensive. During the next year or two, the administration and Congress will debate various forms that potential Medicare prescription coverage may take; governors and state legislators will discuss how state government might help the uninsured pay for prescription drugs. The private sector also is attempting to deal with spiraling drug costs. But unlike the public sector that is discussing ways to subsidize drug costs, the private sector is faced with the dilemma of how to continue paying for escalating healthcare costs driven primarily by higher drug costs as the economy slows down and cost pressures grow. A variety of consultants and employer surveys have documented that healthcare premiums rose more rapidly in the last two than in the recent past and that the dramatic increase in drug costs is a central reason for this phenomenon. 3,4,5,6,7,8,9,1 To date, most employers have been willing to pay for all or most of these increases to attract and retain employees in a tight labor market. However, as the economy slows, more employers are beginning to shift some of the burden of these cost increases to the employees EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT Prescription Drugs As the cost pressures from rising drug costs mount, reliance on prescription drugs as an important treatment modality has grown. This inherent conflict is being played out against the hope that drug spending will at least offset spending for other medical services. The extant literature supports this proposition only in isolated instances such as treatment for diabetes 11 and in some cases for mental illness. 12 Prescription drugs do oftentimes replace other more expensive forms of therapies. For example, general risk factors for heart disease and stroke are well known, with family history, obesity, high blood pressure, high cholesterol levels, diabetes and smoking at the head of the list. Types of people who are at risk are fairly easy to identify. What remains unknown, however, is which specific individuals, with or without identified risk factors, will have heart attacks if they do not take medicines. Inpatient hospital costs are avoided only to the extent that heart attacks and strokes are avoided. Since it is unknown which specific people will have heart attacks without drug treatment, the money spent to provide these drugs to a large at-risk group can easily be greater than the hospital costs that are saved for the few people that do avoid hospitalization for heart attacks. Thus, as this example demonstrates, it is probably more accurate to assume that many prescription drugs save the lives of individual people, improve the quality of life for those with a wide variety of illnesses and are a prerequisite for those who are interested in promoting good quality of care. The key issue is who the individual, the employer or the public sector should pay for what proportion of the cost of what types of pharmaceuticals. SUMMARY OF FINDINGS The intent of the Express Scripts Drug Trend Report series is to provide clients with a better understanding of the dynamics underlying current drug cost increases and future drug cost trends. This fifth edition of the Express Scripts Drug Trend Report discusses the magnitude of and the reasons for prescription drug cost increases between 1996 and 2, with particular emphasis placed on the trend. Among the key findings of this study are: Between 1996 and 2 Per Member Per Year (PMPY) Average Wholesale Price (AWP) ingredient costs grew by 85 percent. Drugs introduced since 1996 represent 35.7 percent of this growth. 3 Fifth Annual Survey on Purchasing Values in Health Care as cited in Managed Healthcare News, 21; 17(2):11. 4 Goozner M. Drug makers, employers in battle over rising costs. Chicago Tribune Internet Edition 2, May 13, 2. 5 For 21 Hewitt [and Associates] is projecting average [healthcare cost] increases of 1 13 as cited in Drug Benefit Trends, December. 6 Credit Suisse First Boston Corporation, Employee Benefit Manager Survey 2, January 3, Noonan D. GM s war on drug costs. Newsweek; February 26, 21: Buck Consultants. Fifth Annual National Health Care Trend Survey. by Buck Consultants as cited by Reuters Health, September 7, 2. 9 The Segal Company. 21 Segal Health Plan Cost Trend Survey. Published October 2. abstract at Accessed February, William M. Mercer, Inc. Survey as cited in: Brubaker B. Steep rise predicted in health benefit costs. Washington Post Online, Published December 12, 2. Accessed February, Testa MA, Simonson DC. Health economic benefits and quality of life during improved glycemic control in patients with type 2 diabetes mellitus: a randomized, controlled, double-blind trial. Journal of the American Medical Association. 1998; 28(17): Nightengale BS, Crumly JM, Liao J, Lawrence BJ, Jacobs EW. Economic outcomes of antipsychotic agents in a Medicaid population: traditional agents vs Risperdal. Psychopharmacology Bulletin. 1998; 34(3):

10 Between 1999 and 2 In 2, PMPY AWP ingredient costs grew by 16.2 percent, from $387.9 in 1999 to $ This is the first time since Express Scripts began monitoring prescription drug trends in 1993 that the rate at which PMPY AWP costs rose slowed from the previous year. The PMPY AWP growth rates for non-managed care clients grew at a somewhat lower rate of 14.9 percent. About three-fourths of this increase is attributable to increased costs per prescription, although this percentage varies across therapy classes. The inflation rate for common drugs (drugs available in 1999 and 2) grew by 5.4 percent, the third consecutive year that inflation topped 5 percent. Inflation accounted for one-third of the overall drug expenditure increase. Increased use of non-steroidal anti-inflammatory drugs, gastrointestinal products, antihyperlipidemics and antidepressants accounted for $25.8, or 4 percent, of the total $62.65 cost increase. 21 Through 25 Projections PMPY AWP ingredient costs are projected to increase by: 15.4 percent in percent in percent in percent in percent in 25 These estimates are slightly lower than those presented in last year s Report, despite the higher inflation assumptions used in this edition. One major reason for this decline is the anticipated decrease in the rates of cost increases in drug classes used for treatment of gastrointestinal disorders, hyperlipidemia, pain/inflammation and diabetes. Some of the expected moderation in utilization stems from a presumed increase in member financial contribution. As member contribution goes up, utilization drops somewhat due to high out-of-pocket expenses. The trend figures cited above reflect past experience with and future expectations about the magnitude of drug cost increases on an AWP ingredient cost basis. When considered from a net cost perspective costs after discounts and member financial contribution plan sponsors can significantly curb costs. Plan sponsors that took aggressive steps saw their drug cost trend decrease by one-half or more of the 2 PMPY AWP trend. The first portion of this Report describes the reasons for the drug cost growth, followed by our PMPY AWP drug cost forecast for the period from This section includes an analysis of pipeline drugs that may come to market during this period, as well as drugs that will lose patent protection and become eligible to become generics. The next section of this Report describes the role of prescription drugs in the healthcare treatment arsenal. This new section explores the magnitude of and the change in the relative proportion of overall healthcare spending that was attributable to prescription drugs between 1999 and 2. The final part of this analysis discusses the types of actions that plan sponsors can take to offset growing prescription costs. Two appendices are included in this report. Appendix A includes an analysis of drug cost changes across and within therapy classes between 1996 and 2. This appendix highlights some of the key changes in utilization of specific drugs and drug classes, as well as pointing out factors that are likely to impact future product mix in these classes. Appendix B presents gender and age group profiles of prescription use across key therapy classes. This information offers clients a way to better understand drug usage according to the demographic makeup of their populations. METHODS The analyses contained in the 2 Drug Trend Report are based on claims for prescription medications for a substantial sample of Express Scripts clients. Prescriptions in this database represent drug usage for a monthly average of 9.6 million members in 1999 and 8.8 million members in 2. Because of the unique demographics and drug coverage for Medicaid recipients and Medicare beneficiaries receiving drug coverage through Medicare Plus Choice plans, data from those two groups are excluded from this study. The resulting 2 sample consists of 75 percent non-managed care commercial members and 25 percent managed care commercial members. The average age of the sample population is 32.8, slightly higher than the 1999 sample age of Drugs sold over-the-counter and prescriptions dispensed in inpatient settings are also excluded from consideration. To ensure comparability across time periods and across client groups, all cost figures are expressed as Average Wholesale Price (AWP) ingredient costs (retail list price of the medication). Consequently, retail network discounts, mail discounts, dispensing fees and member financial contributions are not reflected in these data. Overall figures may not represent actual client experience due to differences in plan design. Finally, the numbers of prescriptions dispensed through mail service have been converted to equivalent numbers that would have been dispensed through retail pharmacies to adjust for differential mail usage rates across Express Scripts clients. 4 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 5

11 NOTES 6 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

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13 TRENDS IN EXPENDITURES FOR PRESCRIPTION DRUGS Express Scripts began monitoring prescription drug costs for the period. Every year from 1993 through 1999, PMPY AWP costs have increased at a faster pace than in the previous year. In 2, however, while still growing by 16.2 percent, PMPY AWP ingredient costs grew less than the 17.4 percent these costs rose in PMPY AWP ingredient costs grew to $ $62.65 over 1999 PMPY costs, representing an 85 percent rise over the 1996 PMPY cost of $ (see Figure 3). FIGURE 3 PER MEMBER PER YEAR AWP COSTS $5 $45 $4 $35 $3 $25 $2 $15 $1 $5 $ Managed care clients experienced slightly higher PMPY cost increases (16.2 percent) than nonmanaged care clients (14.9 percent). This disparity is due primarily to higher rates of increase in therapeutic mix and in the number of units per prescription among managed care clients. The actual net claim costs trend for Express Scripts clients ranged from zero to a 35 percent rise, depending on how aggressively plan sponsors chose to implement Express Scripts recommended cost-management programs. To understand the dynamics underlying these cost trends, growth rates for one-year and five-year periods were analyzed in terms of 1) changes in the utilization of medications so-called common drugs that were available for use between 1996 and 2; 2) increases in AWP ingredient costs per prescription of these common drugs; and 3) introduction of new products to the market. TABLE 1: COMPONENTS OF PER MEMBER PER YEAR COST TREND * 1996 v v v v v 2 Inflation Units per Rx New Strengths Mix Utilization = Common Drugs New Drugs = All Drug *The percentage contribution of each factor does not total to the All Drug percentage increase.the calculation takes the base cost for a given year and multiplies it by one times the percentage contributed by the first factor (pricing). The resulting total is then multiplied by the percentage contributed by the second factor (number of units dispensed), and so on. The percentage contribution of the New Drugs is then added to the total Common Drug percentage to yield an All Drug percentage increase. The final results may differ due to rounding

14 Between 1996 and 2, PMPY AWP ingredient costs grew by 85 percent from $ to $ Almost $98 of the total $26.4 increase is attributable to the rise in per prescription costs. Inflation alone accounted for about $48 of the overall increase and an additional $3 is attributable to therapeutic mix. Utilization of common drugs contributed about $34 of the increase, while drugs introduced since 1996 accounted for approximately $74 of the cost growth rate. The following sections discuss in more detail how each of the components of cost trend contributed to cost increases of the combined non-managed and managed commercial memberships between 1999 and 2. CHANGES IN COMMON DRUG COSTS BETWEEN 1999 AND 2 Utilization of Common Drugs To determine the nature of variable use patterns across therapeutic drug groupings, common drugs were categorized into therapy classes groups of pharmaceutical agents that are chemically or therapeutically related. Products were grouped according to the first two digits of the 14-digit Generic Product Identifier (GPI) code as classified by First DataBank. This classification system defines broad drug groups employed to treat similar medical conditions. This classification scheme is used in the remainder of this Report. After growing by a robust 6.3 percent between 1998 and 1999, the rate of increase in the utilization of common drugs slowed to 3.6 percent, the lowest rate of increase seen since the timeframe. In turn, utilization of common drugs accounted for 25.6 percent of the overall PMPY growth. In contrast, utilization of common drugs represented 38.8 percent of the total cost rise. Despite the slower growth rate, PMPY utilization reached 8.57 in 2 compared to 8.28 in Similar to past, changes in utilization of common drugs between 1999 and 2 varied widely (see Table 2). In 2, utilization of common drugs declined in nine of the top 25 therapy classes, compared to only three in In contrast, only three therapeutic classes experienced double-digit utilization growth in 2. The use of common antihyperlipidemic medicines rose by 17 percent, catapulting this class to the fastest growing class in terms of utilization in 2. This significant growth rate took place on top of the 16.3 percent and 18.1 percent rates in 1998 and 1999 when antihyperlipidemics ranked as the second fastest rising class next to antihistamines. Indeed by 2, a PMPY use rate of.37 placed antihyperlipidemics as the fifth most used drug class. These dramatic increases in the use of antihyperlipidemics in recent have been spurred not only by evidence showing that their use reduces mortality but also by substantial direct-to-consumer (DTC) advertising. According to Scott-Levin s Direct-to-Consumer Advertising Audit and Competitive Media Reporting, $13.4 million was spent on DTC advertising for these products just between January and September Lipitor dominated this class with a 51.8 percent market share, followed by Zocor and Pravachol with 2 market shares that declined to 15.7 percent and 13.8 percent, respectively. 13 Scott-Levin. Direct-to-Consumer Advertising Audit and Competitive Media Reporting. Third Quarter 2. 8 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 9 TABLE 2: UTILIZATION OF COMMON DRUGS OF TOP 25 THERAPY CLASSES RANKED BY 2 PRESCRIPTIONS PER MEMBER PER YEAR Previous Year Selected Year Therapy Class Rxs PMPY Rxs PMPY Change Antihypertensives Antidepressants Narcotic Analgesics Estrogens Antihyperlipidemics Gastrointestinals Anti-Rheumatics (NSAIDS) Cough/Cold Antidiabetics Antiasthmatics Penicillins Oral Contraceptives Antihistamines Dermatologicals Beta Blockers Diuretics Calcium Blockers Thyroid Antianxiety Agents Macrolides Cephalosporins Decongestants Anticonvulsants Ophthalmic Products Corticosteroids Top Other Total While ranking only 22 nd in terms of common drug use at.12 prescriptions PMPY, the use rate increase of 12.5 percent placed anticonvulsants as the second-fastest growing class. This large rise in use was fueled by wider use of Neurontin, which is prescribed more and more as a pain control medication. The market share for Neurontin grew from 17.1 percent in 1999 to 21.6 percent in 2. The use of common drugs in the non-steroidal anti-inflammatory (NSAID) class rose 12 percent in 2 to.34 PMPY. This substantial increase was due primarily to the dramatic growth in prescriptions written for cyclo-oxygenase 2 (COX-2) inhibitors, Celebrex and Vioxx. Introduced in 1999, the combined market share for these products grew from 18.9 percent in 1999 to 39.8 percent in 2. It is anticipated that sales of these products will continue to grow, in part because of the DTC advertising for these products. In the first nine months of 2, about $193 million was spent on DTC advertising for Celebrex and Vioxx Ibid.

15 PMPY utilization of common antidepressant drugs increased by 9.9 percent to.51 PMPY in 2. The antidepressant class was the fourth fastest growing in terms of common drug use, maintaining its status as the second most-used class of common drugs in 2. Part of this increase is due to the use of these products for new indications such as social phobia, bulimia nervosa, post traumatic stress disorder and generalized anxiety disorder. This class continues to be dominated by selective serotonin reuptake inhibitors (SSRIs), such as Prozac, Zoloft, Paxil and Celexa, and by selective norepinephrine reuptake inhibitors (SNRIs), such as Effexor. In 2, the use of narcotic analgesics grew by 9.7 percent, or 1.7 times the overall increase in common drugs. The 2 common drug use rate of.41 PMPY moved narcotic analgesics from the fourth to the third most widely used class of drugs. The increased use of these medications is due to several factors that include more-aggressive pain management strategies particularly for non-life threatening conditions such as lower back pain the growing number of patients being treated in outpatient settings and longer survival times for more terminally ill patients. Consisting of angiotensin converting enzyme inhibitors (ACEIs), angiotensin receptor blockers (ARBs), vasodilators and combination products, the antihypertensive class continues to be the most widely prescribed therapy class. In 2, the use of antihypertensives grew by 9.5 percent to.56 prescriptions PMPY. This strong growth pattern will likely continue as the population ages. Most heavily prescribed in this class were the ACEIs. Both new indications for use of ACEIs and the perception that ACEIs have superior efficacy and better side effect profiles than other kinds of cardiac medications have added to their increasing popularity. Changes in the 2 PMPY use of other cardiac-related drug classes were mixed. The use of beta blockers and diuretics, the recommended first-line agents for uncomplicated hypertension, grew by 8.1 percent and 5.4 percent, respectively. In contrast, the use of calcium blockers continued to decline, dropping by 1.7 percent. In 2, the use of GI drugs rose by 7.5 percent to.35 prescriptions PMPY. The continued significant increase seen in the utilization of GI drugs over the past several was partially the result of greater use of proton pump inhibitors (PPIs), Prilosec, Prevacid and Protonix. Manufacturers of these products have effectively used DTC advertising to help increase their combined market share from 36.2 percent in 1997 to 6 percent in 2. From January through September of 2, $124 million was spent for DTC advertising of PPIs. 15 The use of common antidiabetic drugs increased by 7.1 percent to.31 PMPY in 2. The continued rise in the use of this class is attributable to the emphasis on aggressive management of diabetes, as well as to the availability of newer oral products such as Glucophage, which increased its market share from 21.5 percent in 1998 to 28 percent in 2. From 1997 through 1999, antihistamines experienced the largest percentage utilization increases of any class. In 2, the rise in antihistamine use was 6.9 percent, making it the 1 th highest 15 Ibid. rising class in terms of common drug utilization. At.27 prescriptions PMPY, antihistamines maintained position as the 13 th most used therapy class. The continued widespread use of antihistamines is manifest in the use of three non/low sedating products, Claritin, Allegra and Zyrtec, that account for nine out of every 1 prescriptions written for antihistamines. More money, $197 million, was spent on DTC advertising for antihistamine products than for any other class of drugs during the first nine months of Between 1999 and 2, changes in utilization of common drugs in several drug classes pertaining to women s health were mixed. Increases were seen in the use of thyroid replacement products and miscellaneous endocrine agents in 2, but declines were evident in use of estrogens and oral contraceptives. PMPY utilization of thyroid replacement products rose by 5.7 percent, slightly below its 8.3 percent rise in Although the PMPY use of miscellaneous endocrine agents stands at.6 PMPY, its use increased by more than 3 percent. This growth was fueled by the increased use of Fosamax and Evista, products that dominate the miscellaneous endocrine class with a combined 72.6 percent market share. The use of these products, in conjunction with possible negative side effects related to estrogen use, contributed to the 2.6 percent decline in the utilization of estrogens, commonly used to treat postmenopausal symptoms and to prevent osteoporosis. Because of this decrease in use, estrogens dropped from the third to the fourth most widely prescribed class of drugs at.41 prescriptions PMPY. After growing during 1999, utilization of oral contraceptives declined by 3.5 percent to.28 prescriptions PMPY in 2. This decrease likely is related to changes in plan design regarding coverage of oral contraceptives. The PMPY use of cough and cold products and common decongestants declined in 2. PMPY utilization of the cough/cold class decreased by almost 1 percent to.33 prescriptions PMPY. This follows a 12.9 percent rise in the use of these products in Generics still hold a majority market share, 54.9 percent, but they are losing ground to Claritin D and Allegra D. Utilization of common decongestants, consisting primarily of nasal steroids used to alleviate allergy symptoms, declined by 1.4 percent to.13 prescriptions PMPY. Flonase and Nasonex continue to dominate this market with a combined market share of 55.5 percent. After growing by 13.2 percent in 1999, the use of drugs in the macrolide antibiotic class decreased by 7.4 percent to.19 prescriptions PMPY in 2. With the growing problem of bacterial resistance, especially S. pneumoniae, many physicians are initiating therapy with narrower spectrum antibiotics, as evidenced by the 5.1 percent decrease in PMPY utilization of penicillins and the 11.3 percent decline in the use of cephalosporins. The use of common antiasthmatic drugs remained flat at.29 prescriptions PMPY. The continued relatively stable use of this drug class is somewhat surprising given the emphasis that has been placed on asthma control in recent and the central role that prescription drug therapy plays in that control. 1 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT Ibid.

16 AWP INGREDIENT COST PER PRESCRIPTION Almost three-quarters of the overall PMPY drug cost increase between 1999 and 2 is attributable to the rise in AWP ingredient costs per prescription for common drugs. In contrast, growth in per prescription costs represented one-half of the overall PMPY cost increase. Components of the trend in the cost per prescription for common drugs are: Inflation (AWP price increases per unit moderated by the availability of less expensive generic equivalents for branded products) Therapeutic mix (changes in the mix of chemical entities within and across therapeutic classes) Strength mix (changes in the mix of strengths and dosage forms of existing chemical entities) Units (the number of units dispensed per prescription) Inflation, the number of units dispensed and the two types of mix contributed somewhat unevenly to the change in per prescription cost. (See Table 1 and Figure 4) While there are variations across therapy classes, generally between 1999 and 2 for common drugs, inflation had by far the greatest impact on the average AWP ingredient cost per prescription, followed by therapeutic mix, number of units per prescription and strength mix. The relative contributions of these factors to the overall increase in the average prescription AWP cost for common drugs are described below. FIGURE 4 PERCENT OF AWP CHANGE ATTRIBUTED TO INFLATION, UNITS, THERAPEUTIC MIX AND STRENGTH MIX Strength Mix 8.4 Therapeutic Mix 37.9 Inflation 45. Units EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 13 INFLATION Inflation reflects the AWP that manufacturers set for each unit of their product. Between 1999 and 2, inflation grew 5.4 percent. This marks the third consecutive year that inflation has topped 5 percent. By comparison, inflation ranged from 1 percent to 3.3 percent between 1993 and Based on Consumer Price Index (CPI) statistics reported by the U.S. Department of Labor (which defines inflation somewhat differently than this analysis), the inflation rate for prescription drugs has continued to exceed the rate of increase for the overall CPI, as well as for other types of medical care. 17 This trend has occurred in each of the last three. In the time period inflation was the largest cost trend driver, accounting for one-third of the total cost increase. Because inflation rates did not increase in a uniform manner, inflation must be examined between brands and generics as well as across therapy classes. The data indicate that generics, at 7.1 percent, experienced a higher inflation rate than brands, which grew by 5.4 percent. (The apparent anomaly of a 5.4 percent increase in brand prices and a 7.1 percent increase in generic prices resulting in a 5.4 percent increase for all products reflects the fact that our inflation rate also captures cost changes resulting from the shift from branded products to their generic equivalents. The move to generics somewhat moderates the inflation rate because generics are usually less expensive than their brand equivalents.) The respective inflation rates are very close to the 7 percent and 5.8 percent seen for generics and brands in Across the top 25 classes, generics also had a greater variation in trend rates with nine classes having inflation rates of greater than 1 percent and nine classes with rates under 4 percent (see Table 3). In contrast, among brands, only two classes had trend rates above 1 percent and two classes fell below 4 percent. Among the generic classes with high inflation rates, this inconsistency is likely due to the aggressive pricing strategies of selected generic manufacturers operating in the generic market where the scrutiny of AWP price changes is not as great as it is with brands. Conversely, the classes with low generic trend may be a reflection of backlash generated from pricing strategies that were too aggressive. A case in point was the lawsuit charging unfair pricing practices that was filed two ago against the makers of generic antianxiety drugs. 17 Bureau of Labor Statistics, U. S. Department of Labor. Consumer price index-all urban consumers (current series). Updated January, Accessed January, 21.

17 TABLE 3 PRICE CHANGES DUE TO INFLATION OF TOP 25 THERAPY CLASSES RANKED BY PERCENT CHANGE IN PRICE Price Change Price Change Price Change Therapy Class Generic Products Branded Products All Products Thyroid Estrogens Corticosteroids Dermatologicals Antidiabetics Diuretics Cough/Cold Beta Blockers Penicillins Antidepressants Macrolides Ophthalmic Products Anticonvulsants Narcotic Analgesics Antihyperlipidemics Anti-Rheumatics (NSAIDS) Decongestants Antianxiety Agents Antihistamines Cephalosporins Gastrointestinals Antihypertensives Antiasthmatics Oral Contraceptives Calcium Blockers Top Other Total The top two classes in terms of price increases are those that have been consistently at the top of the list in the last several : thyroid drugs and estrogens. The common denominator between these two classes is that each is dominated by single brands made by one company, with relatively little generic competition. This combination has allowed substantial price increases of the dominant brands without fear of a loss of market share to competition. These price increases have been masked in part by the fact that the most commonly dispensed drugs are relatively inexpensive. While manufacturers can claim small per unit dollar increases, the percentage increases are actually high. Analysis of the thyroid class reveals that the price of the dominant brand, Synthroid, increased slightly more than 12 percent in 2 (see Table 4). However, the brand increase alone was not enough to propel the thyroid class to the top of the inflation list. Among generic products only, thyroid medications were also at the top of the list with an inflation trend of 22.7 percent. Leading the charge was the branded generic Levoxyl. The price of the most commonly dispensed form of Levoxyl was increased three times in 2 and ended the year at a unit cost almost 34 percent higher than at the end of EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 15 TABLE 4 PRICE CHANGES FOR TOP 5 COMMON BRAND DRUGS # of Price Changes Unit Price on Unit Price on Percent Between 12/31/1999 Product 12/31/ /31/2 Change and 12/31/2 1 LIPITOR 1MG $1.88 $ CLARITIN 1MG $2.24 $ PREVACID 3MG $3.73 $ PRILOSEC 2MG $3.99 $ ZITHROMAX 25MG $6.55 $ PREMARIN.625MG $.57 $ PREMPRO MG $.87 $ PROZAC 2MG $2.64 $ ORTHO TRI-CYCLEN $1.7 $ CELEBREX 2MG $2.42 $ LIPITOR 2MG $2.9 $ ZYRTEC 1MG $1.86 $ VIOXX 25MG $2.42 $ GLUCOPHAGE 5MG $.65 $ FLONASE 5MCG $3.34 $ PAXIL 2MG $2.33 $ ZOLOFT 5MG $2.27 $ ZOLOFT 1MG $2.34 $ ALLEGRA 6MG $.99 $ NORVASC 5MG $1.32 $ TRIMOX 5MG $.38 $ WELLBUTRIN SR 15MG $1.53 $ PREMARIN 1.25MG $.79 $ NORVASC 1MG $2.17 $ PREMARIN.625MG $.55 $ CELEXA 2MG $2.2 $ CLARITIN-D 24 HOUR 24-1MG $2.53 $ ZESTRIL 1MG $.93 $ CLARITIN-D 12 HOUR 12-5MG $1.26 $ CIPRO 5MG $4.15 $ PRAVACHOL 2MG $2.27 $ AMBIEN 1MG $2.14 $ ZESTRIL 2MG $.99 $ NASONEX 5MCG $3.1 $ TOPROL XL 5MG $.58 $ ULTRAM 5MG $.77 $ DIFLUCAN 15MG $11.53 $ AUGMENTIN MG $4.76 $ ALLEGRA-D 12-6MG $1.11 $ SYNTHROID 1MCG $.31 $ LEVAQUIN 5MG $8.53 $ HUMULIN N 1U/ML $2.29 $ BIAXIN 5MG $3.52 $ SEREVENT 21MCG $5.14 $ ZOCOR 2MG $3.81 $ LIPITOR 4MG $3.5 $ K-DUR 2MEQ $.5 $ TRIPHASIL-28 $1.2 $ ORTHO-NOVUM $1.7 $ PREMARIN.9MG $.69 $

18 The combination of a 14 percent brand increase and a low 12 percent generic fill rate resulted in a 12.6 percent inflation increase for the estrogen class. As in past, the manufacturer of Premarin made two price increases in 2 to end the year at a unit cost almost 13 percent higher than the price at the end of The AWP of Prempro, a combination conjugated estrogen and progestin product, which has been gaining market share in recent, only changed twice during 2 but still experienced an 18.2 percent jump. This rise was twice the rate of increase of any other drug among the top 5 brands, except for Premarin and Synthroid. The class with the third greatest inflation increase was oral corticosteroids. The ranking represented a 14-position leap from last year. With greater than a 92 percent generic fill rate and an average cost per prescription of less than $1, this class is similar to the thyroid products generic manufacturers can mask large percentage increases with small dollar increases. Dermatologicals were another class for which the generic inflation rate outpaced the brand rate, contributing to the overall trend. However, dermatologicals were ranked in the top four for both brand and generic trend, in turn ranking the entire class fourth among the top 25. Among branded dermatologicals, three products Benzamycin, Bactroban and Accutane experienced inflation trend of greater than 15 percent. These three products are all either off patent (Benzamycin and Bactroban ) or soon to go off patent (Accutane in August 21). In each case the dramatic price increases may be a reflection of their manufacturers desire to maximize revenues prior to the onset of generic competition. The primary reason for the large increase in generic dermatologicals was the increase in the highest volume generic product. The most frequently dispensed size/strength for desoximetasone cream, used to treat inflammation and itch associated with several skin conditions, increased 35.9 percent. Antidiabetics rounded out the top five classes in inflation trend. While the brand inflation trend in this class was a relatively modest 5.9 percent, just slightly higher than the overall class average, the generic inflation trend shot up by 16.1 percent. Not coincidentally, the generic fill rate decline in the antidiabetic class was among the largest of the top 25 classes. The market share of generic sulfonylureas, traditionally the drugs of choice to treat Type 2 diabetes, is being eroded by newer branded classes that work in different ways. In response to this loss in market share, generic manufacturers apparently have increased prices in an attempt to maintain consistent revenues. THERAPEUTIC MIX AND STRENGTH MIX Therapeutic mix is the use of relatively more expensive or less expensive drugs within and across therapy classes. Strength mix refers to cost impacts caused by shifts to more or less expensive strengths of the same drug or by the introduction of new strengths for existing products. In 2, the impact of therapeutic mix on overall trend was 4.2 percent, a dramatic increase over the 2.3 percent seen from 1998 to 1999 but more in line with trends seen from 1995 through The impact of strength mix continued to climb to.9 percent. Although the impact of strength mix is relatively small compared to therapeutic mix, it is still relevant because it reflects the tendency of manufacturers to modify their existing drugs to improve patient compliance or to comply with new treatment recommendations. As seen in Table 5, the therapeutic mix trend from 1999 to 2 for the top 25 classes by utilization was 4.1 percent. Between the trend periods and the top five mix trend classes anti-rheumatics, narcotic analgesics, anticonvulsants, penicillins and antiasthmatics remained the same, although ranked in a different order. Between 1999 and 2, antirheumatics and narcotic analgesics were far and away the leading classes in this trend component at 14.1 percent and 13.4 percent combined mix, respectively. Within the anti-rheumatic class, the COX-2 products, Celebrex and Vioxx, more than doubled their combined market share from 18.9 percent in 1999 to 39.8 percent in 2. However, despite the resulting significant blow to the market share of branded NSAIDS, the dramatic increase in mix trend is due primarily to the erosion of the cheaper generic NSAID market share by more expensive COX-2 brands. To a lesser extent the increase in market share of DMARDs, Arava and Enbrel has also increased mix trend. These were the only others in the top 2 anti-rheumatics to gain market share. Their high costs relative to the class average (Arava is 3.5 times the class average and Enbrel 15 times the class average) show why these products can significantly impact mix trend with only small increases in market share. 16 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 17 TABLE 5 PRICE CHANGES DUE TO MIX OF TOP 25 THERAPY CLASSES Therapeutic Mix Strength Mix Total Mix Therapy Class Change Change Change Anti-Rheumatics (NSAIDS) Narcotic Analgesics Anticonvulsants Penicillins Antiasthmatics Antidiabetics Cough/Cold Ophthalmic Products Antianxiety Agents Gastrointestinals Dermatologicals Decongestants Antidepressants Estrogens Antihypertensives Calcium Blockers Oral Contraceptives Thyroid Antihistamines Antihyperlipidemics Macrolides Diuretics Beta Blockers Corticosteroids Cephalosporins Top Other Total

19 The 13.4 percent mix trend increase in the narcotic analgesic class was split between a 1.7 percent increase in therapeutic mix and a 2.7 percent increase in strength mix. The therapeutic mix increase has been driven by increased use of more powerful products such as OxyContin. After increasing market share by only.8 percent from , the OxyContin market share rose 1.3 percent from , contributing to almost one half of the class mix increase. The average AWP prescription cost of OxyContin is $27.42 compared to the class average of $3.9 in 2. The strong strength mix component of trend was due to the release of the 16mg strength of OxyContin in 2. Anticonvulsants also experienced a total mix trend of almost 9 percent due to the large market share increase of expensive drugs. Neurontin, costing about 1.5 times the class average, increased market share by 4.5 percent. Topamax, at 2.4 times the class average, increased market share by 1.5 percent and contributed about one-half as much as Neurontin to the class mix trend. Both products are indicated for seizures, but Neurontin can be used as monotherapy for adults as well as for children. (Neurontin also is used off-label for pain control.) Topamax is indicated as adjunct therapy for adults only. Penicillins also experienced mix trend of greater than 8 percent but for different reasons. Penicillins are dominated primarily by generics with a 76.6 percent market share and secondarily by Augmentin with a 23.3 percent share. Augmentin, with an average prescription cost of over three times the class average, increased market share by 1.6 percent, accounting for virtually all of the therapeutic mix change. However, penicillins also had the greatest impact of strength mix among the top 25 classes. This was due to dramatic increases in market share of higher strength suspension dosage forms of Augmentin and Amoxil. The last of the top five mix trend classes, antiasthmatics, experienced results similar to what occurred in Asthma controllers Singulair tablets and Flovent inhalers experienced 4 percent and 3.3 percent market share gains, respectively. This reflects the practice among people with asthma to use products that control the condition rather than products that stop asthma attacks once they have started. Other products worth mentioning because of their impact on mix trend are Pulmicort, Respules TM and Serevent. Pulmicort Respules TM, an inhaled steroid in a new dosage form for children as young as one year old, was a mix trend factor because of its relatively high cost. Serevent, and in particular the Serevent Diskus inhalation powder product, was a factor in 2 and is likely to be a factor in future as CFC-free products gain popularity. Antidiabetics rose from 15th in the ranking to sixth in the ranking, with a 7.3 percent mix trend increase. In the mix ranking, the antidiabetic class was ranked first due to the popularity and the relatively high price of Rezulin, the first glitazone on the market. By the time Rezulin was pulled from the market in early 2 due to concerns about liver toxicity, two new glitazones Avandia and Actos had been introduced in the United States. While not quite as costly as Rezulin, they are both more than twice the class average cost. Not only have Avandia and Actos replaced Rezulin, they have contributed to a 55-percent rise in the market share of glitazones in the antidiabetic class, accounting for most of the mix trend increase from 1999 to 2. Two other classes, cough/cold and ophthalmics, had mix trend of greater than 5 percent. Cough/cold rose five positions from 12th in to 7th in The total cough/cold increase was comprised of a slightly below-average increase in therapeutic mix of 3.4 percent and a healthy almost 2 percent increase in strength mix. Much of the therapeutic mix increase was due to increased market share of the non-sedating antihistamine/decongestant combination products Claritin-D and Allegra-D. These two products increased market share within the class by 2.6 percent. The strength mix component was relatively high because of a shift from the less expensive 12-hour formulation of Claritin-D to the more expensive 24-hour formulation. The ophthalmic class mix trend was almost entirely due to a 5.1 percent increase in therapeutic mix. This increase was slightly over 1 percent greater than last year. The biggest movers in this class were Xalatan, used to treat glaucoma, and Patanol, used to treat eye irritation caused by allergies. These two products increased market share by 1.4 percent and 1.2 percent, respectively. The market share increase for Xalatan was greater in than in , likely reflecting the increased awareness of treatment options for glaucoma. The market share increase for Patanol was actually lower this year than last. Contributing to the lower market share for Patanol was the introduction of several new products to the anti-allergy ophthalmic market. In fact, two of these newer products, Zaditor and Alocril, together made up the lost market share for Patanol. This type of growth in this market is likely to be challenged as healthcare plans begin to question the practice of concurrent use of oral antihistamines and ophthalmic antihistamines. The prevailing theme in the ophthalmic class this year was increased market share for brands and decreased marketshare for generics. This year marked the first time in four that the generic market share in the ophthalmic class declined. The decrease is an example of a phenomenon in which new drug sub-classes now treat conditions formerly treated by generics. 18 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 19

20 UNITS PER PRESCRIPTION The 1-percent change in the cost per prescription due to changes in the number of units per prescription was the highest level seen since Despite the increased impact of this component over last year, as seen in Table 6, many of the same classes appear in the top five. Cough/cold, narcotic analgesics and antihistamines, all consistently in the top five, secured the top three positions from TABLE 6: PRICE CHANGES DUE TO CHANGES IN UNITS PER PRESCRIPTION , TOP 25 THERAPY CLASSES BY PRESCRIPTIONS IN 2 Therapy Class Rxs Change Cough/Cold Narcotic Analgesics Antihistamines Decongestants Anti-Rheumatics (NSAIDS) Calcium Blockers Gastrointestinals Antihypertensives Beta Blockers Estrogens Oral Contraceptives Thyroid Dermatologicals Macrolides Antidiabetics Antihyperlipidemics Cephalosporins Penicillins Antianxiety Agents Antidepressants 6..2 Corticosteroids Antiasthmatics Diuretics Ophthalmic Products Anticonvulsants Top Other Total The cough/cold and antihistamines classes usually track closely to each other because Claritin-D and Allegra-D are the most commonly dispensed cough/cold products, while their sister products Claritin and Allegra dominate the antihistamines. Increased units in these classes are likely an indication that these types of drugs are being used to treat allergies on a prophylactic basis rather than just to treat them symptomatically. Another class of respiratory drugs, decongestants, made a strong showing in the units trend ranking, showing up in the fourth place ranking at 2.4 percent. Consisting primarily of nasal steroids, the decongestant class is likely benefiting from the same trend toward preventing reactions to allergens rather than treating the attacks after they have occurred. The narcotic analgesic trend is likely continuing to show the use of these products in the treatment of long-term pain rather than only on a short-term basis such as after surgical procedures. However, a potential danger in long-term use of these products is that patients may become dependent on them, requiring greater quantities per prescription. One other class worth noting in this analysis is the anti-rheumatic class. The impact of units per prescription jumped from 1 percent last year to 2.3 percent this year. This was the first year during which COX-2s were included in the common drugs and they displayed some of the higher increases in units per prescription. NEW DRUGS The significance of new drugs in the use and cost of prescription drugs continued to grow in 2. In 1999, drugs introduced since 1992 accounted for 4.8 percent of costs and 25.4 percent of prescriptions. By 2, new drugs introduced since 1992 accounted for 46.7 percent of 2 cost and 29.6 percent of prescription use (see Figure 5). In 2, 27 new drugs and six biologic agents were approved by the FDA, compared with the introduction of 35 new drugs and five biologics in However, unlike the recent past, the impact of drugs introduced in 2 was minimal. Drugs sold for the first time in the United States accounted for only.3 percent of overall 2 PMPY AWP ingredient costs. The two drugs introduced in 2 that had the largest cost impact were Protonix and Lotronex, each of which accounted for only.1 percent of total PMPY drug costs. (See Table 7) Protonix is facing stiff market challenges from its competitors Prilosec and Prevacid. In addition, the generic version of Prilosec likely will be available late in 21 and another PPI, Nexium, was brought to market in early 21. Lotronex, used to treat irritable bowel syndrome, was taken off the market in November 2 due to reports of severe side effects. 18 The Pharmaceutical Research and Manufacturers of America (PhRMA). New drug approvals of 2. Published January 18, Accessed March, EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 21

21 FIGURE 5 IMPACT OF NEW DRUGS INTRODUCED SINCE 1992 ON 2 UTILIZATION AND COST TABLE 7 Rxs Cost New 1996 New 1995 New 1994 New 1993 New 1992 Total Existing New 2 New 1999 New 1998 New 1997 TOP NEW DRUGS IN 2 FDA AWP Drug Name Route Approval Date Primary Indication Cost PROTONIX PO Feb- Gastroesophageal Reflux Disease.1 LOTRONEX PO Feb- Irritable Bowel Syndrome (IBS).1 HUMALOG MIX 75/25 SQ Dec-99 Diabetes Mellitus/Hyperglycemia. TRILEPTAL PO Jan- Partial Seizures. MOBIC PO Apr- Osteoarthritis. GLUCOVANCE PO Jul- Type 2 Diabetes. KEPPRA PO Nov-99 Epilepsy. REPRONEX IJ Aug-99 Pituitary Suppression. EXELON PO Apr- Alzheimer s. ZYVOX PO Apr- Enterococcus. ALOCRIL OP Dec-99 Allergic Conjunctivitis. DEPAKOTE ER PO Aug- Migraine. AROMASIN PO Oct-99 Breast Cancer. WELCHOL PO May- Hyperlipidemia. FOLLISTIM/ANTAGON IJ Jul-99 Ovarian Hyperstimulation. TARGRETIN PO Dec-99 T-cell Lymphoma. ZONEGRAN PO Mar- Epilepsy. GYNAZOLE-1 VG Jun- Yeast Infections. EVOXAC PO Feb- Sjogren s Syndrome. VANIQA TP Jul- Unwanted Facial Hair. Top 2 New Drugs.3 All New Drugs.3 All Other Drugs 99.7 All Drugs 1. PO Oral, SQ Injected under the skin, IJ Injected, OP Opthalmic, VG Vaginal, TP Topical The number of drugs approved in a given year, however, is only one part of the story. Another important factor is whether blockbuster drugs were among the products introduced. In 1999, new drugs accounted for 1.6 percent of total costs, largely on the strength of Celebrex and Vioxx (See Figure 6 and Table 8). The contribution of all 1999 new drugs to total annual costs rose to 4.7 percent in 2. This dramatic increase is a function not only of these drugs being blockbusters, but also due to the time it takes for new products to become part of the everyday treatment arsenal used by physicians. Clearly, the advent of DTC advertising may quicken the growth of a product s market share. Indeed, from January through September of 2, Vioxx ranked first in terms of DTC advertising with $138.3 million spent on such promotion. One of the reasons for this heavy consumer advertising is that, unlike its competitor product Celebrex which was available in January 1999, Vioxx did not come to market until May and had to compensate for this later market entry. FIGURE 6 PERCENT OF AWP ACCOUNTED FOR BY NEW DRUGS As we look ahead five, the number of new drugs coming to market will increase dramatically. The potential explosion of new drug products is even more dramatic when current drug pipeline activity is examined. According to SG Cowen, 1,1 products are in the development pipeline. Of these products, 152 are in preclinical trials, 699 are in phase I, II or III clinical trials, and an additional 159 products have been filed with the FDA. 19 However, based on our analysis of existing pipeline products, we think very few blockbuster drugs will come to market over the next five. The rough map of the Human Genome, completed ahead of schedule in the summer of 2, marked a giant step toward development of drugs to combat such diseases as breast cancer, hereditary deafness and skeletal disorders, hemorrhagic strokes, kidney disorders and one type of diabetes. Over the next three to five, as researchers locate the exact position of all 35,+ genes on human chromosomes and sequence millions of base pairs, drugs targeted to specific conditions with pinpoint accuracy will begin to emerge. Eventually, research may enable scientists to predict who will respond most effectively to a particular drug therapy, or who may suffer a side effect, as well as yield designer drugs targeted to each individual s unique genetic profile and engineered in a much more precise way than today s drugs. This information may also be used to determine an individual s susceptibility to common disorders, allowing the design of programs for effective, individualized, preventive medicine focused on lifestyle changes. 19 SG Cowen Securities. Pipeline Pulse. March EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT New in 2 New in 1999 New in 1998 New in 1997 New in 1996 New in 1995 New in 1994 New in 1993 New in 1992

22 We are looking at nothing less than a new era in healthcare, one that promises incalculable potential to eradicate diseases and improve quality and length of life. We cannot predict with certainty when this promise will be fulfilled or how it may eventually impact pharmacy benefit plans. What we can predict is that a new generation of biotech drugs is in our future, and both the rewards and the costs will likely be high. TABLE 8 PERCENT OF 2 COST AND AWP COST PER PRESCRIPTION FOR TOP 5 NEW DRUGS Year of 2 2 Brand Name Introduction Cost AWP/Rx 1 LIPITOR $ PREVACID $ CLARITIN $ ZOLOFT $ ZOCOR $ CELEBREX $ PAXIL $ GLUCOPHAGE $ VIOXX $ NORVASC $ ZITHROMAX $ ALLEGRA $ ZYRTEC $ PREMPRO $ NEURONTIN $ CELEXA $ ROXICODONE $ ACCUTANE $ FLONASE $ SINGULAIR $ AVANDIA $ ENBREL $1, REBETRON $1, FLOVENT $ AVONEX ADMINISTRATION PACK $ LEVAQUIN $ AMBIEN $ ACTOS $ LAMISIL $ SEREVENT $ FOSAMAX $ HYZAAR $ ZYPREXA $ ULTRAM $ NASONEX $ LOTREL $ CEFZIL $ ASACOL $ EVISTA $ PLAVIX $ RELAFEN $ ACIPHEX $ VALTREX $ RISPERDAL $ SERZONE $ VIAGRA $ DIOVAN $ COZAAR $ SPORANOX $ ZOMIG $ OTHER 22.3 $87.39 Total 1. $ EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

23

24 21-25 DRUG COST TREND FORECAST Since Express Scripts began monitoring drug costs in 1993, PMPY AWP ingredient costs have grown by an escalating annual rate. In the 1999 Drug Trend Report, PMPY drug costs were projected to rise marginally to 17.6 percent in 2 before growing at a gradually declining rate through 24. As is evident, the actual 2 PMPY cost estimate was 1.4 percentage points lower than last year s projection. In the aggregate, this over-estimate stems principally from the lower than expected inflation rate 6 percent anticipated versus 5.4 percent actual and the minimal contribution of new drugs.3 percent in 2 versus 1.6 percent in Clearly, this explanation is simplistic. The degree of variability across therapy classes in terms of all cost drivers is considerable. For example, we projected that 2 PMPY costs for COX-2s would rise by 62 percent and that costs for oral anti-diabetic drugs would grow by 17 percent. In fact, these costs grew by percent and 29.6 percent, respectively. Similarly, we estimated that PMPY costs for PPIs and medications used to treat women s health conditions would rise by 32 percent and 17.2 percent, respectively; but they actually grew by 28.6 percent and 12.2 percent, respectively. The remainder of this section contains Express Scripts annual projections for the next five. These projections are presented in the aggregate and for major therapy class groupings. In terms of the former, Express Scripts projects that PMPY AWP ingredient costs will continue to rise but at a reduced rate through 25. More specifically, Express Scripts projects that drug costs will grow by: 15.4 percent in percent in percent in percent in percent in 25 These projections translate into an 81 percent increase in PMPY costs over the next five from $ in 2 to $ in 25 (see Figure 7). As was the case in building last year s estimate, the assumption regarding the inflation rate that will occur through 25 is a key factor influencing the magnitude of the projected rates of cost increases. As was discussed in the price portion of this Report, inflation for prescription drugs was 5.1 percent in 1998 and 5.4 percent in both 1999 and 2. Express Scripts anticipated that price hikes would grow to 6 percent in 2, and diminish thereafter, largely because the political environment was becoming somewhat hostile toward the pharmaceutical industry. It was expected that the industry probably would react to this pressure by increasing prices significantly during 2 before reducing the level of price increases as it did during the healthcare reform debate that took place during the initial Clinton administration. 25

25 FIGURE 7 PER MEMBER PER YEAR AWP COSTS $ (21 25 projected) Medicare prescription drug coverage was clearly one of the central issues debated during the Bush-Gore presidential campaign. Both candidates promised to tackle this issue, albeit in different ways, if elected. Gore essentially proposed grafting on prescription drug coverage to the current Medicare benefit, while Bush suggested that the federal government fund states to provide such coverage while the federal government grappled with how to restructure Medicare and fold prescription coverage into that new scheme. With Bush winning the presidency, the urgency of passing Medicare prescription drug benefit legislation is not as paramount as it likely would have been had Gore won. President Bush priorities appear to be tax reduction, education, military spending and then Medicare prescription drug coverage. At least one short-term result of the Bush Administration s agenda is reduced political pressure regarding this issue. The accompanying attention paid to high prescription drug costs and other ancillary charges related to manufacturer pricing practices and profit margins as well as to government indirect underwriting of some drug discovery has also diminished. In addition, the disappearance of an industry-perceived threat that a Gore election would increase the likelihood of indirect or direct prescription cost controls seems to have reduced the pressure on the industry to curb price increases. Against this backdrop and despite initiatives in states such as Maine and Vermont, Express Scripts has altered its inflation assumptions upward from last year s estimates to 5.5 percent in 21 and 5 percent annually from 22 through 25. The relationship between our overall PMPY cost projections and our inflation assumptions is depicted graphically in Figure FIGURE 8 PERCENT CHANGES IN AWP COST Although these assumed inflation rates were applied to all classes, a number of other factors were also considered. First, actual 2 costs and utilization were carefully analyzed. Then other considerations including aging of the population, anticipated utilization and product mix, products losing patent status and introduction of new products were factored into the therapy class specific projections. Express Scripts annual PMPY cost estimates from 21 through 25 are presented in the aggregate and for major therapeutic classes, along with a brief rationale for these projections in Table 9. Key new drugs and patent expirations that were considered in developing our cost projections for each therapy class are highlighted. 26 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT / / / / / / / /3 PMPY Cost Inflation / /5 (/1 4/5 projected)

26 TABLE 9 DRUG TRENDS: ALL DRUGS SUMMARY AND FORECAST Est Therapy Class $PMPY Change $PMPY Change $PMPY Change $PMPY Change $PMPY Change $PMPY Change $PMPY Comments Gastrointestinal $ $ $ $ $ $ $64.97 PPIs $ $ $ $ $ $ $53.26 Growth rate will moderate as market reaches saturation; generic Prilosec will lower per Rx cost H2RAs $ $ $8.32. $ $ $9. 5. $9.45 Utilization will continue to shift to PPIs Other $ $ $ $ $ $ $2.27 New drugs for IBS will offset decreased use of other drugs Central Nervous System (CNS) $ $ $ $ $ $ $ Antidepressants $ $ $ $ $ $ $7.62 New indications for existing products will increase use; generic Prozac will decrease cost Anticonvulsants $ $ $ $ $ $ $33.71 Shift from traditional to newer products and use of Neurontin and successor product pregabalin for pain relief will drive up costs Antianxiety Agents $ $ $ $ $ $ $11.39 Little growth expected because of growing preference for SSRIs for treatment of anxiety Antipsychotics $ $ $ $ $ $ $1.36 Increased use of new branded products and expanded indications will drive up costs Hypnotics $ $ $ $ $ $ $5.83 Increase in use of new branded products will grow costs Antihyperlipidemics $ $ $ $ $ $ $68.59 With aging of poulation and DTC, expect high growth to continue Cardiovascular $ $ $ $ $ $ $73.87 Antihypertensives $ $ $ $ $ $ $36.32 Expected generic availibility of serveral ACE inhibitors will slow growth Calcium Blockers $ $ $ $ $ $ $16.44 Continued erosion of class use expected Beta Blockers $ $ $ $ $ $ $15.63 Use for heart failure and first-line use for hypertention will increase utilization Diuretics $ $ $ $ $ $ $5.48 Rise in use due to JNC-6 guidelines pushing first-line use for HTN Pain/Inflammation $ $ $ $ $ $ $86.74 Anti-Rheum (NSAIDS) $ $ $ $ $ $ $13.66 Cox-2s continue to erode market share of branded NSAIDS Cox-2s $ $ $ $ $ $ $34.72 Continued high use will moderate over time Narcotic Analgesics $ $ $ $ $ $ $27.6 Use will continue to increase as will use of more expensive products Migraine Products $ $ $ $ $ $ $1.76 Modest increases expected to continue Diabetes $ $ $ $ $ $ $36.27 Oral $ $ $ $ $ $ $3.85 Growing use will drive up class cost Insulin $ $ $ $ $ $ $5.42 New modes of administration will increase utilization primarily for Type II Respiratory $ $ $ $ $ $ $77.53 Antiasthmatics $ $ $ $ $ $ $28.24 Utilization grows marginally but use of more expensive products pushes costs up Antihistamines $ $ $ $ $ $ $24.18 Significant but declining utilization increases but generic Claritin will moderate costs beginning in 23 Cough/Cold $ $ $ $ $ $ $14.54 Modest increases anticipated unless bad flu/allergy season; use of expensive products will continue Decongestants/Nasal Steroids $ $ $ $ $ $ $1.57 Growth will be moderate unless bad allergy season Dermatologicals $ $ $ $ $ $ $21.52 Price increases will drive class costs Antivirals $ $ $ $ $ $ $2.92 HIV $ $ $ $ $ $ $4.21 Cost growth will be minimal due to standardization of treatment Herpes $ $ $ $ $ $ $4.44 Modest growth will continue Hepatitis $ $ $ $ $ $ $11.6 Utilization growth and introduction of pegylated interferon/ribavirin product will further increase costs Other/Flu $ $ $ $ $1. 1. $ $1.21 Rise in use dependent on severity of flu season Women s Health $ $ $ $ $ $ $53.55 Estrogens $ $ $ $ $ $ $15.25 Declining use somewhat offset by price increases Oral Contraceptives $ $ $ $ $ $ $15.11 Modest growth as more plan sponsors cover OCs Misc. Endocrine $ $ $ $ $ $ $23.19 Aging of the population, massive undertreatment of osteoporosis and fear of using estrogens will lead to substantial utilization growth Anti-Infectives $ $ $ $ $ $ $44.43 Macrolides $ $ $ $ $ $ $11.82 Physician preference for use in respiratory infections will continue; use dependent on severity of flu season Cephalosporins $ $ $ $ $ $ $7.7 Market for these products supplanted by quinolones and macrolides Penicillins $ $ $ $ $ $ $11.42 Utilization declines as preference for other antibiotic classes expands but use of Augmentin will grow Quinolones $ $ $ $ $ $ $13.49 Growth in class costs will increase despite Cipro going generic in EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 29

27 GASTROINTESTINAL The most significant development in the gastrointestinal drug class is the expiration of the Prilosec patent, currently scheduled for October 21. Prilosec was the top-selling drug in 2 in the United States. Approved in early 21, Nexium, a drug derived from Prilosec, is expected to compete with generic forms of Prilosec as well as with the other branded proton pump inhibitors (Prevacid, Aciphex and Protonix ). Other GI drugs in advanced clinical trials include Zelmac, which will likely be approved in 21 for the treatment of irritable bowel syndrome, and the Substance P inhibitor MK-869, which is being studied for chemotherapyinduced nausea and vomiting. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Nexium esomeprazole GERD, PUD X Zelmac tegaserod IBS X MK-869 Chemotherapyinduced vomiting X norcisapride GERD X cilansetron IBS X Patent expirations: Pepcid 21 Axid 22 Prevacid 25 Prilosec 21 Aciphex 24 CENTRAL NERVOUS SYSTEM Prozac was at the center of two important developments in the central nervous system (CNS) drug class in 2. First, the courts ruled that the patent for Prozac expired in 21, not 23 as originally thought. Second, the development of an expected replacement for Prozac, r-fluoxetine, was discontinued after clinical trials showed evidence of cardiovascular toxicity. A new product, duloxetine, is being developed to possibly replace Prozac in the antidepressant market. An unnamed product in advanced clinical trials treats depression by inhibiting a brain chemical called substance P. A product in development for attention-deficit hyperactivity disorder, atomoxetine, shows promise for two reasons: first, it treats the disease differently than other available products; and second, it is not a narcotic, which should limit abuse and make it easier for schools to store and administer the drug. A pipeline product that may have a broad range of uses is the anticonvulsant pregabalin, which is expected on the market in 22. Similar to Neurontin, pregabalin may have indications for both epilepsy and pain when it is approved. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Geodon ziprasidone Psychosis X Reminyl galantamine Alzheimer s X Zomaril iloperidone Psychosis X aripiprazole Psychosis X duloxetine Depression X Vestra reboxetine Depression X escitalopram Depression X pregabalin Epilepsy, pain X atomoxetine Attention-deficit hyperactivity disorder X substance P inhibitor X fluoxetine/ olanzapine Psychotic depression X GW32659 Attention-deficit hyperactivity disorder X Ariza Depression X memantine Alzheimer s X Neotrofin leteprinim Alzheimer s X Patent expirations: BuSpar 21 Neurontin expired, Serzone 23 Zofran 25 Prozac 21 but competition Celexa 23 Zoloft 25 delayed until 22 Wellbutrin SR 24 3 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 31

28 RESPIRATORY A number of new products are in the short-term pipeline for the treatment of respiratory disease, but most are similar to existing products. Clarinex a derivative of Claritin, and Soltara a derivative of Hismanal, are two antihistamines that have been submitted to the FDA for approval. Two unique products for the treatment of chronic obstructive pulmonary disease, Ariflo and Viozan, are in late-stage clinical trials. One unique product expected on the market shortly is Xolair, which is being studied in both asthma and allergic rhinitis. Xolair works by antagonizing the effects of IgE, which is an inflammatory protein found in the lungs. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Asmanex mometasone Asthma X Foradil formoterol Asthma X Clarinex desloratadine Allergic rhinitis X Soltara norastemizole Allergic rhinitis X Zyrtec-D cetirizine/ Allergic rhinitis/ X pseudoephedrine congestion Xolair olizumab* Asthma, X allergic rhinitis Ariflo SB COPD X Viozan COPD X Spiriva tiotropium COPD X Nuvance interleukin-4 Asthma X receptor Symbicort formoterol/ Asthma X budesonide interleukin-4 Asthma X antagonist* *injectable product Patent expirations: Claritin 22 Flovent 23 Flonase 23 PAIN/INFLAMMATION This therapeutic category contains drugs for general pain, osteoarthritis, rheumatoid arthritis and migraine headaches. With the success of the COX-2 inhibitors Celebrex and Vioxx, similar products, including the first injectable product, parecoxib, are quickly being developed to compete in this category. Enbrel received a first-line indication for the treatment of rheumatoid arthritis in 2, and studies for its use in psoriasis are ongoing. Three additional triptans that are close to approval will provide additional competition in this therapeutic category, although none appears to offer improved safety or efficacy. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use valdecoxib Arthritis, pain X parecoxib* Acute pain X etoricoxib Arthritis, pain X COX-189 Arthritis, pain X Kineret anakinra* Rheumatoid arthritis X 32 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 33 D2E7 Dirame propiram Pain X Relpax eletriptan Migraine headache X Miguard frovatriptan Migraine headache X Axert almotriptan Migraine headache X Prosaptide TX-14 Neuropathic pain X *injectable product Patent expirations: Stadol NS 21 Relafen 22 Duragesic 24 X

29 CARDIOVASCULAR The most significant product in the short-term cardiovascular pipeline appears to be Crestor, which is a statin similar to Lipitor and Zocor. Early reports indicate that Crestor may be the most potent statin to date. Another high-profile product, Vanlev, was originally expected on the market in 2, but concerns about side effects led to a new clinical study and a new launch date of 22. Ezetimibe is a cholesterol absorption inhibitor that is being studied in combination with Zocor in a fixed-dose regimen for the treatment of elevated cholesterol. Ranolazine, which represents a new class of drugs called partial fatty acid oxidation inhibitors, is being studied in chronic angina and heart failure. Several drugs in this class lose patent protection in the coming, including Mevacor, the first statin. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Crestor rosuvastatin Hyperlipidemia X Vanlev omapatrilat Hypertension X eplerenone Hypertension, X heart failure olmesartan Hypertension X Lumaxis roxifiban Inhibition of platelet X aggregation itavastatin Hyperlipidemia X ezetimibe Hyperlipidemia X ranolazine Angina, CHF X melagatran DVT prophylaxis X BAY Hyperlipidemia X avasimibe Hyperlipidemia X Patent expirations: Mevacor 21 Accupril 22 Lotensin 23 Pravachol 25 Plendil 21 Zestril /Prinivil 22 Zocor 25 WOMEN S HEALTH Compounds from several different chemical classes fill the osteoporosis pipeline. Arzoxifene and lasofoxifene are selective estrogen receptor modulators. Bonviva and Zometa are bisphosphonates. Xyvion is a synthetic hormone with tissue-specific effects. Fortéo is recombinant parathyroid hormone, given by injection to patients with severe osteoporosis. Contraception continues to be a major focus for pharmaceutical manufacturers, and while the compounds in development offer only slight clinical differences over currently available products, they provide women with different therapy options. Yasmin contains a progestin not previously available in the United States, Ortho Evra is the first transdermal contraceptive, and Seasonale will be taken continuously for 91 days (84 days of active drug followed by 7 days of placebo tablets). NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Bonviva ibandronate Osteoporosis X arzoxifene Cancer X lasofoxifene Osteoporosis, X breast cancer Fortéo teriparatide Osteoporosis X Xyvion tibolone Osteoporosis X Ortho Evra ethinyl estradiol/ Contraceptive patch X norgestimate Aslera prasterone Lupus X estradiol/ Osteoporosis X trimegestone Zometa zolendronate Osteoporosis X Yasmin ethinyl estradiol/ Contraception X drospirenone Seasonale ethinyl estradiol/ Contraception X levonorgestrel Patent expirations: Estraderm 21 Nolvadex 22 Ortho-Novum EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 35

30 ANTI-INFECTIVES Drugs used to treat viral illness dominate the anti-infective pipeline. A significant number of drugs are in development for HIV. Most of them, however, are similar to products already on the market. The combination product Rebemax is expected to replace Rebetron as a therapy of choice for some patients with hepatitis C. Approval of ribavirin as a stand-alone product, which is expected in 21, would expand use of ribavirin, which is currently available in the United States only in Rebetron. One intriguing product, Picovir, is being studied as a treatment for the common cold. Clinical trial results indicate that treatment with Picovir slightly decreases the duration of a cold, but whether these data can convince physicians to prescribe the product remains to be seen. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Spectracef cefditoren Respiratory X tract infection Ketek telithromycin Respiratory X tract infection Factive gemifloxacin Respiratory tract X infection; urinary tract infection faropenem Multiple infections X Vfend voriconazole Fungal infections X Coactinon emivirine HIV X tenofovir HIV X tipranavir HIV X BMS HIV X GW HIV X Pegasys pegylated Hepatitis C X interferon alfa-2b Picovir pleconaril Common cold X T-2 HIV X Rebemax pegylated Hepatitis C X interferon alfa-2a/ribavirin RWJ-2721 Treatment of X influenza Rebetol ribavirin Hepatitis C X Patent expirations: Floxin 23 Cipro 23 Zithromax 25 Ceftin 23 Diflucan 24 DIABETES The diabetes pipeline centers on the insulin product Exubera. This product administers dry powder human insulin by use of an inhaler rather than the traditional method of injection. Exubera is in Phase III trials for both Type 1 and Type 2 diabetes and should be available in 22. Other oral insulin products are in earlier stages of development. Symlin is a synthetic version of the hormone amylin that helps regulate glucose metabolism. NEW PRODUCTS: Expected Release Date Brand name Generic name Proposed Use Exubera insulin, inhaled Diabetes X Types 1 and 2 GI Diabetes Type 2 X PNU Diabetes Type 2 X Symlin pramlintide* Diabetes X Types 1 and 2 Oralgen insulin, oral liquid Diabetes X Types 1 and 2 protein kinase-c Macular edema X beta inhibitor and retinopathy *injectable product Patent expirations: Amaryl EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 37

31 NOTES 38 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

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33 THE GROWING IMPORTANCE OF PRESCRIPTION DRUGS IN DISEASE TREATMENT In last year s edition of the Drug Trend Report, we projected that 2 PMPY drug costs would grow at a slightly faster rate than 1999, 17.4 percent to 17.6 percent. Actual 2 data show that for the first time since Express Scripts began monitoring drug cost trends in 1993, the rate of growth in PMPY AWP ingredient costs declined to 16.2 percent. Although inflation was somewhat lower than anticipated, 5.4 percent versus the 6 percent projection, increases in per prescription costs, not utilization or new drugs, accounted for the lion s share almost 75 percent of the overall cost rise. By comparison, the growth in per-prescription costs represented onehalf of the overall cost increase. Despite the promise of significant products going generic over the next several, it is anticipated that prescription drug costs will continue to grow at a rapid but declining rate of growth over the next five. The trend figures cited above reflect past experience with and future expectations about the magnitude of drug cost increases if plan sponsors take no aggressive action to curb costs. Indeed, plan sponsors that did take aggressive steps such as increasing member financial share of costs and implementing three-tier copays during the 2 plan year experienced trends of 8 percent or less during the year. The dynamics underlying these substantial cost increases are the same as those discussed in previous editions of this Report. The key cost drivers are: A continued supply of new drugs is coming to market: According to the Pharmaceutical Research and Manufacturers of America, an estimated $26.4 billion was spent on research and development in 2 alone. The demand for prescription drugs continues unabated, fueled by a society that looks to drugs as a primary curative for all sorts of maladies: Some drugs are used by consumers in lieu of changing behaviors or lifestyles, and other products enhance the quality of life. This phenomenon has occurred with an apparent disregard for the possible known and unknown long-term effects of some prescription drugs. Consumer demand is also stimulated by DTC advertising: In a May 21 press release, Scott- Levin estimated that DTC spending for pharmaceuticals reached approximately $2.5 billion in 2, more than double the amount spent in Consumers expect all prescription drugs should be available and accessible and that employers or health plans should subsidize the cost of these drugs: Most Americans look at the drug benefit as an entitlement. Consumers are empowered: More and more Americans feel that it is their right to control the healthcare services they receive. These forces do not operate in a vacuum but rather in a historical context of medical care practice. That is, the seemingly never-ending flow of new pharmaceuticals and consumer demand and empowerment have intersected with, and in some cases caused, a change in the way diseases are treated. 39

34 Healthcare Financing Administration (HCFA) data presented in the introduction of this Report demonstrate the growth of prescription spending relative to overall national health expenditures. When these HCFA data are further disaggregated, the increasing prominence of prescription medicines in the medical care arsenal becomes more apparent. As is shown in Figure 9, reliance on hospital-based care was much greater two decades ago than it was in 1999 and than what is expected in 21. In 198, expenditures for hospital care represented 41.3 percent of national health expenditures. This level, which dropped to 32.3 percent in 1999, is projected to decrease further to 27.3 percent by 21. Although they grew slightly from 19.2 percent in 198 to 22.3 percent in 1999, expenditures for physician and clinical services are anticipated to decline to 2.7 percent in 21. In contrast, outlays for prescription drugs as a percentage of national health expenditures grew from 4.9 percent in 198 to 8.2 percent in They are projected to rise to 13.9 percent by 21. FIGURE 9 PRESCRIPTION DRUGS, HOSPITAL CARE, AND PHYSICIAN AND CLINICAL SERVICES AS A PERCENTAGE OF NATIONAL HEALTH EXPENDITURES (projected) The decreased reliance on hospital care as measured by relative spending levels is not surprising. The outcry in the late 197s and 198s over high and rising hospital costs led to a revolt over fee-for-service payment systems that encouraged over utilization and unnecessary costs. Many such systems were replaced by prospective, capitated payment schemes that encouraged efficiencies in the delivery of medical services. Such forces led not only to reduced costs per hospital stay, but also to fewer inpatient admissions and to a consequent increase in the delivery of medical services in outpatient settings. While some of these reductions in inpatient hospital days resulted from the pruning of inappropriate admissions and excessive lengths of stay, in a few instances prescription drugs enabled decreases in hospital days. That is, in the past many diseases were treated with inpatient procedures such as surgery for peptic ulcer disease or electroconvulsive therapy in the case of severe depression; today prescription drugs taken in ambulatory settings are treating these diseases. 4 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT Prescription Drugs Physician and Clinical Services Hospital Care Other As the role of pharmaceuticals has grown and that of inpatient hospital treatment has declined, primary care physicians (PCPs) internists and general and family practitioners have become more critical players in treating patients who used to be seen primarily by specialists. Many patients with hypertension, depression and other affective mood disorders, asthma and gastrointestinal diseases are now being treated or at least monitored by their family physicians, not by cardiologists, psychiatrists, pulmonologists and gastroenterologists. Moreover, because of more convenient dosing and substantially better side-effect profiles of many drugs, PCPs have become the principal prescribers of legend drugs. The increased role of prescription drugs in medical treatment, particularly by PCPs, is further illuminated by the results of 1989 and 1998 National Ambulatory Medical Care Surveys. According to data derived from these surveys, in 1989, 63.6 percent of physician office visits were associated with drug mentions. By 1998, this figure had grown to 68.7 percent. Furthermore, in 1998, 75.5 percent of visits to general/family practices and 78 percent of visits to internal medicine offices included drug mentions. In contrast, only 59.2 percent of specialist visits 2, 21 (excluding those to pediatricians, which had a 68.4 percent rate) had a drug mention. In the last several, consumers have become more active participants in their healthcare. Today it is not unusual for a patient to walk into a physician s office requesting that certain tests be performed or that specific drugs be prescribed. DTC advertising for prescription drugs has reinforced this consumer empowerment movement. The effectiveness of these campaigns in generating consumer requests for and receipts of prescriptions for specific drugs has been well documented. 22, 23 In addition, another study found that 88 percent of the physicians surveyed did not consider the cost of a medication when prescribing, and that 8 percent of the physician respondents were unaware of the actual drug costs. 24 In sum, the practice of medicine has changed significantly over time. The relative importance of pharmaceuticals has grown while the criticality of inpatient hospital care has declined. The role of the PCP continues, and some would argue has gained prominence, particularly in the prescribing arena, at the expense of the specialist. Finally, the relative power of the patient has grown and the control of the physician over the patient has eroded. The remainder of this section presents descriptions of how medical practice has changed for several important diseases and examines the implications that these changes have on the pharmacy benefit. 2 Delozier JE, Gagnon, RO Summary: National Ambulatory Medical Care Survey. Advance data from Vital and Health Statistics; no. 23. Hyattsville, MD: National Center for Health Statistics Woodwell DA Summary: National Ambulatory Medical Care Survey. Advance data from Vital and Health Statistics; no Hyattsville, MD: National Center for Health Statistics National survey of consumer reactions to direct-to-consumer advertising. In: Prevention Magazine. Emannaus Pa; Rodale Press; 1998:6. 23 Office of Medical Policy, Division of Drug Marketing, Advertising, and Communications, Center for Drug Evaluation and Research, U.S. Food and Drug Administration. Attitudes and behaviors associated with direct-to-consumer (DTC) promotion of prescription drugs. Main survey results. Published 2. Accessed February, Reichert S, Simon T, Halm EA. Physicians attitudes about prescribing and knowledge of costs of common medications. Archives of Internal Medicine. 2;16: As cited in Managed Care Executive Edition, January 21:8. 41

35 CARDIOVASCULAR DISEASES Although prescription drugs may replace other types of medical services, in some cases drugs usually represent additive therapies. For example, few treatment options were available for people who suffered heart attacks in the 195s. Anyone who survived an initial heart attack was sent home from the hospital with instructions to take life easy and little else. Twenty later, cardiac pacemakers, open-heart surgeries, angioplasty and the first drugs to control blood pressure had been developed for the treatment of heart attack survivors. By the end of the 2 th century, diagnostic procedures, like cardiac catheterization, and invasive therapies, like coronary artery bypass surgery, were relatively commonplace even among individuals who would not have been considered for such heroic measures just a few previously. In most cases, however, those medical interventions must be followed by drug therapy to keep heart diseases under control. While most medical services provided to cardiac patients are diagnostic or treatment oriented, most cardiac drugs are preventive in nature. Drugs are used both for patients with existing heart conditions and for people who have diseases that may lead to heart problems. Antihypertensives and antihyperlipidemics are designed to prevent heart attacks and thereby save lives. The use of cardiovascular medications, such as beta blockers, calcium blockers and angiotensinconverting enzyme inhibitors (ACEIs), became widespread beginning in the late 197s, followed by antihyperlipidemics and angiotensin receptor blockers (ARBs) in the late199s. The aging of the population, better education about hypertension and hyperlipidemia and lowered thresholds for determining which patients should receive drug treatment have all contributed to increasing numbers of people now taking drugs. 25 ASTHMA In contrast, prescription drugs have been and still are the only treatment modality available to asthma patients (many nonprescription drugs are also used, as are allergy shots for patients with allergic asthma). Before the introduction of asthma controller medications, people who suffered from asthma were usually treated only after asthma attacks started. Preventive therapy consisted mainly of avoiding risk factors cold air, exercise and stress thought to be responsible for triggering attacks. Theophylline, discovered in the late 189s but not used widely until the 193s, was the first controller in general medical use. It represented a new way to keep acute attacks from sending people with asthma to emergency rooms or hospitals. Inhaled bronchodilators like albuterol, which were first used during the 196s, do a much better job of aborting acute attacks, while inhaled corticosteroids introduced in the following decade and leukotriene receptor antagonists only available since the mid-199s serve to prevent asthma attacks. As the prevalence of asthma grows, the number of people who use anti-asthmatic medications, and the associated costs, will escalate. 25 Fairman KA. The effect of new and continuing prescription drug use on cost: a longitudinal analysis of chronic and seasonal utilization. Clinical Therapeutics. 2;22(5): EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT GASTROINTESTINAL (GI) DISEASES The treatment of GI diseases has also evolved dramatically over time. Until the availability of H2 receptor antagonists in the 197s and proton pump inhibitors (PPIs) in the 199s, peptic ulcer disease (PUD) was treated primarily with bland diets and surgery. Gastroesophageal reflux disease (GERD), a disorder with symptoms similar to PUD, is treatable with drug therapy except in rare, severe cases. GERD can be controlled with the same drugs used for ulcers, although longterm maintenance medications are usually necessary and some patients require higher doses for adequate relief of symptoms. Over-the-counter (OTC) and prescription drugs used to treat GERD and heartburn are heavily marketed through direct-to consumer (DTC) advertising. More money is spent PMPY on prescription drugs to treat GI diseases than on any other class of drugs. MENTAL ILLNESS During the past two centuries, science learned much about physical diseases and about mental illnesses. Around the turn of the 2 th century, psychological therapies began to be used. Sigmund Freud popularized psychoanalysis; later other psychological treatments, such as behavioral, humanistic and cognitive therapies became commonplace. By the 193s, prefrontal lobotomy and electroconvulsive shock were used to treat patients with schizophrenia and depression. Not until the mid to late 195s did effective drug therapies neuroleptics and chlorpromazine for people with schizophrenia, tricyclics and monoamine oxidase inhibitors for depressed people and lithium carbonate for those suffering from bipolar disorders begin to be used for treating people with mental illnesses. The advent of these drugs, along with humanitarian concerns about the conditions in asylums, led to the de-institutionalization movement that began in the 197s. By the late 198s, selective serotonin reuptake inhibitors (SSRIs) appeared on the market. Offering fewer side effects and better efficacy than previously available drug therapy, SSRIs are more comfortable for non-psychiatrists to prescribe, as well as being less complicated for patients to take. As they gained widespread use, some SSRIs demonstrated effectiveness in treating disorders such as social anxiety, obsessive-compulsive disorder, premenstrual dysphoria and panic as well as bulimia nervosa. In recent, atypical antipsychotic drugs that have come to market have been effective in treating schizophrenia and other psychotic disorders. Coupled with increasing public awareness of mental health and often in conjunction with psychological therapies, newer drugs have helped to encourage more people to seek pharmaceutical therapy for depression and other mental illnesses. The four examples above illustrate the increasing role of pharmaceuticals in treating a variety of diseases. This evolution of disease treatment is portrayed in Figure 1. This role ranges from direct treatment to prevention. 43

36 FIGURE 1 SUMMARY CHANGES IN TREATMENTS FOR SELECTED DISEASES Disease Earlier Treatment Type 2 Typical Treatment Type Cardiovascular lifestyle changes cardiac catheterization cardiac pacemakers coronary artery bypass surgery open heart surgery drug therapy angioplasty blood pressure medication Asthma theophylline bronchodilators avoiding risk factors corticosteroids leukotriene receptor antagonists Gastrointestinal diet proton pump inhibitors surgery H2 receptor antagonists Mental Illness psychoanalysis psychoanalysis psychological therapies psychological therapies prefrontal lobotomy electroconvulsive shock DRUG THERAPIES: DRUG THERAPIES: tricyclics SSRIs monoamine oxidase inhibitors atypical antipsychotics lithium carbonate INTEGRATED MEDICAL AND PHARMACY CLAIMS ANALYSIS To further explore this changing relationship between drug and other medical care spending, integrated medical and pharmacy claims data from Express Scripts subsidiary Practice Patterns Science were analyzed. More specifically, claims data from 617,828 and 66,864 people who were continuously eligible in calendar 1998 and 1999, respectively, were examined. Primarily consisting of HMO and PPO members, 51 percent of the members in these groups were females and members had an average age of 33. For each of these populations, covered charges (charges that were eligible for plan coverage before member financial contribution) were aggregated into the following six categories of service: 1. Office visits 2. Tests/laboratory pathologies 3. Medical surgical/outpatient facility 4. Prescription drugs 5. Inpatient professional/facility 6. Alternative sites/all other services 44 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT Expenditures for all medical conditions in total and for eight chronic conditions in particular were analyzed in terms of PMPY costs. As is shown in Figure 11, consistent with the HCFA data, prescription drugs charges increased at a faster rate than all other medical services. Between 1998 and 1999 charges for prescription drugs increased from 22.9 percent to 25.3 percent of total charges PMPY. Put another way, of the $139 increase in total charges between 1998 and 1999, $74, or 53 percent of the total medical charge growth was attributable to increased prescription drug costs. FIGURE 11 PER MEMBER PER YEAR COVERED CHARGES FOR DRUGS AND OTHER MEDICAL SERVICES (PERCENTAGE CHANGE) $ 1,592 1,731 Total (8.7) Office Visits (2.5) Test/ Lab Path (9.8) To ascertain the degree to which these spending patterns held for members with particular chronic diseases, the primary diagnosis was used to identify both the people with the following diseases and the services used to treat them: 1. Hypertension 2. Peptic Ulcer Disease (PUD) 3. Gastroesophageal Reflux Disease (GERD) 4. Allergic Rhinitis 5. Asthma 6. Depression Med Surg/ Prescription Outpt Facility Drugs (8.5) (2.3) Inpatient Prof. & Facility (-.4) For a member to be classified as having one of these six diseases, a diagnosis for that disease must have been present sometime during the calendar year in question. To identify patients with two other chronic conditions diabetes and hyperlipidemia either a diagnosis code or a history of using specific drugs was employed. The drugs used to treat these specific diseases are rarely used for other conditions Alternative Sites & Other (1.6) 45

37 These eight medical conditions were selected for analysis because drugs used to treat them are major contributors to overall drug costs. (See Table 1) Charges for prescription drugs ranged from a low of 42 percent for PUD in 1998 to a high of 83.3 percent for hyperlipidemia in Between 1998 and 1999, the proportion of total spending attributable to drugs rose for each of these diseases except for GERD, which decreased slightly. Finally, charges for prescription drugs account for one-half to the entire amount of the total expenditure growth for each of these diseases. Also noteworthy is that, with the exception of depression, which declined by 6.5 percent, total PMPY covered charges associated with the treatment of these diseases increased from 4.6 percent for allergic rhinitis to 11.7 percent for asthma. TABLE 1: PERCENT CHANGE IN PER MEMBER PER YEAR COVERED CHARGES FOR DRUGS AND OTHER MEDICAL SERVICES FOR SELECTED MEDICAL CONDITIONS 1998 Charges per Patient 1999 Charges per Patient Change Other Other Other Medical Condition Medical $ Drug $ Medical $ Drug $ Medical $ Drug $ Hypertension $142 $312 $143 $ Hyperlipidemia $76 $338 $76 $ Peptic Ulcer $554 $41 $591 $ Gastroesophageal Reflux $238 $47 $267 $ Rhinitis $198 $158 $197 $ Asthma $25 $339 $22 $ Diabetes $313 $524 $333 $ Depression $649 $629 $498 $ Two of the most widely used drug classes include products that treat GI diseases and depression. Yet, as indicated by diagnosis codes, the prevalence of PUD/GERD, the most predominant GI diseases, and depression were relatively small, approximately 2.1 percent and 1.8 percent, respectively, in This situation could be an artifact of either people having received a diagnosis for these diseases before the time period of the study or people being treated for those conditions without having a corresponding diagnosis recorded. To get a better indication of the probable prevalence of these diseases, members who had diagnoses for these diseases or who used medicines that primarily treat these same diseases were identified. When the drug markers are used as a surrogate for diagnosis, the prevalence of PUD/GERD and depression increase dramatically. The prevalence of PUD/GERD rises from 2.1 percent to 9.2 percent. This prevalence rate compares with national estimates that 1.4 of the population have an active ulcer 26, and that about 1 percent of Americans suffer from heartburn daily. 27 The prevalence of depression grows from 1.8 percent to 9.9 percent, about the same as the 9.5 percent national prevalence rate. 28 It should be noted that some patients with other types of mental illnesses likely are using these antidepressive drugs. 46 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT The implications of these findings are twofold: It is possible that diagnoses are not being properly recorded for a variety of reasons to avoid the stigma attached to a diagnosis of depression, for instance Drugs account for an even higher percentage of total costs in at least some diseases. In the case of this expanded definition of PUD/GERD, drugs account for about 85 percent of total spending. For depression, drugs spending grew to 81.8 percent of total 1999 charges, causing PMPY total expenditures for depression treatment to go from negative 6.5 percent to a positive.6 percent compared to 1998 levels In summary, analyses of integrated medical and pharmacy claims data support the argument that, at least for some chronic diseases, prescription drugs account for a significant and growing percentage of overall medical costs. APPROPRIATE USE OF PRESCRIPTION DRUGS The growing dependence on pharmaceuticals to treat many diseases does not imply that prescription drugs are always used appropriately. Some people take prescription drugs unnecessarily. For example, although depressive symptoms should be treated regardless of cause, short-term situational depression does not usually have to be treated with antidepressants. People who overeat or who indulge spicy foods once in awhile do not have to take prescription drugs to treat the resulting heartburn. Some people with high blood pressure or high cholesterol levels can control their conditions with diet and exercise. Some people with asthma can prevent acute asthma attacks and the subsequent use of inhaled beta agonists to counteract those attacks by avoiding exposure to various allergens. By the same token, however, some patients may be receiving inadequate doses of their medicines. This situation can be the result of a patient s or a physician s behavior. In terms of the former, a person with asthma may not know the proper way of using an inhaler, thereby wasting some of the medication. Other patients may not follow-up with testing to assure adequate responses to prescribed drugs. In terms of the latter, a physician may inadvertently prescribe subtherapeutic doses of the medication, despite the prescription guidelines that are available for many diseases. 29 This issue may be more prevalent among general practitioners who must digest a plethora of information on the numerous diseases they must treat as opposed to a specialist who can concentrate on a few diseases and treatments Adams PF, Hendershot GE, Marano MA. Table 57: Number of selected reported chronic conditions per 1, persons by age. Current Estimates from the National Health Interview Survey, National Center for Health Statistics. Vital Health Statistics. 1(2) p Nebel OT, Formes MF, Castell DO. Symptomatic gastroesophageal reflux: incidence and precipitating factors. American Journal of Digestive Diseases. 1976;21: Regier DA, Narrow WE, Rae DS, Manderscheid RW, Locke BZ, Goodwin FK. The de facto mental and addictive disorders service system. Epidemiological Catchment Area prospective 1-year prevalence rates of disorders and services. Archives of General Psychiatry. 1993;5(2): Roe CM, Motheral BR, Teitelbaum F, Rich MW. Angiotensin-converting enzyme inhibitor compliance and dosing among patients with heart failure. American Heart Journal. 1999;138: Fairman KA., Course of antidepressant treatment, drug type, and prescriber s specialty. Psychiatric Services. 1998;49:

38 Most people assume that translating the physician s hand-written prescription into the delivery of the medication in the correct strength and dose to the patient is done correctly 1 percent of the time. Unfortunately, this is not always the case. A recent report by the Institute of Medicine indicated that errors involving prescription drugs kill more than 7, Americans a year. 31 In fact, most patients do receive the proper medication at the appropriate dosage levels. A more important issue is whether the patient adheres to the treatment regimen those with chronic diseases need to take their medications exactly as prescribed. Figure 12 depicts a survival curve showing the probability that continuously eligible members who used at least one drug in one of 1 chronic therapy classes stayed on a drug in that therapy class over a 24 month period (calendar ). These data indicate that compliance decreases with time and varies with therapy class. The probability of continuation for antidiabetic therapy was 95 percent and for antiasthmatic therapy 82 percent at six months. The probabilities of continuation decreased to 92 percent for antidiabetics and to 75 percent for antiasthmatics at one year. At two, the probability of continuing antidiabetics was 81 percent and the probability of continuing antiasthmatic therapy was 51 percent. 32 FIGURE 12 LENGTH OF TREATMENT WITH ANY PRESCRIPTION IN SELECTED THERAPY CLASSES Antiasthmatics Antipsychotics Anticonvulsants Diuretics Calcium Blockers 31 Phillips DP, Christenfeld N, Glynn, LM. Increase in US medication-error deaths between 1983 and The Lancet. 1998;351(913): Roe, CM. Have you been taking your medication? Proceedings of the 1999 Express Scripts Outcomes Conference; 1999 June, St. Louis, Missouri. 48 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT Days Since Initial Prescription Beta Blockers Antihyperlipidemics Antihypertensives Estrogens Antidiabetic These data suggest that although there is variability in compliance rates across therapy classes, there is room for improvement. Drug therapy cannot be effective unless patients take their medications appropriately. Improving compliance undoubtedly increases drug costs at the same time that it enhances quality of care. From a different perspective, not only may noncompliance with drug therapy jeopardize quality of care and, perhaps, health outcomes, it also results in wasted resources. Paying for prescriptions that are not used properly is just the initial cost in a series of potentially negative consequences that may result. APPROACHES TO PROMOTING APPROPRIATE DRUG UTILIZATION The appropriate use of legend drugs starts with the physician writing a prescription for the correct drug in the right dosage form. For this to occur, the physician needs to be familiar with the array of drugs that may be used to treat a particular disease, professional guidelines describing the appropriate sequence and dosage of those drugs, drugs on the plan s formulary, and other drugs that patient is taking that may counteract or interact with the drug being prescribed. Once the physician writes the prescription, the pharmacist must be able to read it and fill it correctly. There are a number of tactics that can be employed to address these issues. Most PBMs offer concurrent drug utilization review (DUR) programs. These programs consist of a number of clinical edits designed to ensure that the appropriate drug is dispensed in the correct dose to the suitable patient. To function correctly, concurrent DUR systems require access to a patient s eligibility and claims history. While the claim is being adjudicated real-time by the pharmacy and PBM, a prescribed medication is edited for such things as appropriateness for a gender, age group, disease, dosage, possible interactions with another medication the patient is taking and formulary status. When these edits raise any of these concerns, a client can choose to implement a hard block meaning that the prescription cannot be adjudicated without an override or a soft-block that merely informs the pharmacy of a potential issue and relies on the pharmacy to intercede with the physician if it chooses to do so. Most clients choose to implement these edits via soft-blocks that minimize member disruption. In addition to concurrent DUR, Express Scripts offers a number of complimentary retrospective clinical programs designed to promote appropriate drug use. Communications with physicians and members for disease management and retrospective DUR programs will be greatly enhanced by the availability of the Internet. Some of these programs are described below. Optimizing the Benefits of Medication Use: In what are often referred to as utilization review programs, patient populations that have been prescribed specific agents are screened for appropriateness to generally accepted medical guidelines. Physicians who routinely prescribe outside guidelines may be offered information through one-on-one verbal interventions or use of printed media targeting specific patients under their care. This information in intended not only to educate physicians about those specific patients, but also to improve prescribing in the future. 49

39 Additional Pharmacological Intervention: Through retrospective targeting programs, patients whose diseases could be better treated through the addition of medications to their treatment regimens can be identified. For instance, as discussed above, many new medications for the prevention of acute exacerbations of asthma are available. Patients receiving medications to treat exacerbations, or attacks, can benefit from the addition of controller medications, potentially decreasing costs for avoidable physician office and emergency room visits. Many other examples point to the importance of using databases organized across practice sites to better coordinate care. Adhering to the Pharmacological Regimen: To benefit from an appropriately prescribed therapy, the patient must continue to take the medication. As discussed earlier, patient compliance with drug regimens often is less than optimal. Express Scripts has developed programs that help patients remember to refill prescriptions, that provide access to professionals who can answer questions or alleviate concerns about their drug therapy and that make the medication refill process easy to use. Disease Management: Another strategy to encourage appropriate prescription drug use is disease management, an approach that encompasses the comprehensive management of a patient with a specific disease. Programs range from identifying patients who have a given disease and sending them objective educational materials to actively intervening, contacting and monitoring patients on a regular basis. The latter strategy necessitates not only the availability of data to identify patients with those diseases, but also the mechanisms to intervene. Use of Preferred Products: The availability of many products with similar therapeutic profiles within distinct therapeutic drug classes allows flexibility in selection of preferred agents that can decrease costs and obtain equal or superior clinical efficacy. Adding formulary benefit designs that incentivize physicians and patients to select preferred products is a rational approach. Electronic Prescribing: Neither the concurrent nor the retrospective DUR programs involve real-time communications with a physician, a situation that reduces the effectiveness of many such programs. This reality has particular importance at the points that a physician prescribes a product and that prescription is filled with the medication the pharmacist thinks was written by the physician. A strategy to ameliorate this problem is to link the physician, PBM and pharmacy real-time in the prescribing and dispensing processes. This approach enabled by standardized communication protocols and electronic prescribing technology puts all of the patient s pharmacy claims history and plan sponsor s coverage rules in the hands of the physician as the prescription is written. This information allows the physician to act immediately on any concurrent clinical edits, formulary concerns or coverage issues that may be triggered before the prescription is sent to the pharmacy. In addition, the prescription is sent electronically to the pharmacy of the member s choosing to be filled. The electronic transmission of the prescription avoids misfills due to problems reading handwritten prescriptions. The communication channel also provides a vehicle for the PBM, in concert with the plan sponsor, to communicate with the physician on any possible issues related to prescribing guidelines, polypharmacy, patient compliance issues or other matters related to retrospective DUR programs. 5 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

40

41 ACTIONS TO MITIGATE IMPACT OF COST TREND The confluence of the factors described above has placed plan sponsors in the dilemma of paying for ever increasing pharmacy costs, a situation that is compounded by the downturn in the economy. In addition to the clinical interventions discussed in the preceding section, a number of strategies can be employed to offset rising drug costs. These techniques include actions aimed at controlling per-prescription drug costs, reducing utilization of prescription drugs and reducing both prescription costs and utilization, as well as implementing defined contribution programs that include member choice. ACTIONS AIMED AT CONTROLLING PER-PRESCRIPTION COSTS Payers can reduce per-prescription costs by adopting particular ground rules under which they will pay for drug products. They can limit the size of retail networks; promote the use of mail service; and implement programs for mandatory generics, quantity limits, step therapy and therapeutic switching. The deepest discounts that payers generally can attain are through a mail service pharmacy, which can lower costs by capitalizing on economies of scale. Consequently, when member copayments are set appropriately, it is beneficial for the payer to encourage members to have prescriptions that are used to treat chronic diseases filled through mail service. About 87 percent of large employers have a mail service benefit. 33 On the retail side of the equation, better discounts can be obtained by driving higher volume into network stores. Thus, a payer willing to limit the number of retail pharmacies in its network can obtain deeper discounts. The plan sponsor can directly affect the per-prescription cost by controlling or influencing the mix of products reimbursable under the drug plan benefit. In a mandatory generic program, the member is required to pay the difference in price between a multi-source brand for which a generic is available and the generic equivalent. A mandatory generic program can be implemented in a way that requires the member to pay the difference only if the physician has indicated that a generic can be substituted or regardless of whether the physician had indicated that a generic could be substituted. In 2, 86 percent of Express Scripts HMO clients had a mandatory generic program. In contrast, 51 percent of non-managed care commercial clients had such a program. Limiting the number of pills that a member can receive for one copay can control excessive quantities per prescription. Such a quantity limit program involves targeting products for which prescriptions are prone to include quantities beyond what is suggested for typical use. Depending on how aggressive the client is willing to be, a quantity limits program can save between $.1 and $.2 per member per month. Managing drug choices within a therapeutic class has become a viable alternative for reducing costs. Compared with the more indirect approach of physician intervention and behavior changes, 33 Wyeth-Ayerst Prescription Drug Benefit Cost and Plan Design Survey Report, 2 Edition. Albuquerque: Wellman Publishing, Inc

42 plans are opting to manage utilization choices at the point of service. Requiring the plan participant to try the most cost effective drug therapy, such as a generic, for a particular condition before the plan will pay for a more-advanced, and generally more-expensive drug, can potentially reduce the cost of treatment. This strategy, often referred to as step therapy, is especially successful for short-term drug therapies. Therapeutic switching is another vehicle that can be used to reduce per-prescription costs. Most formulary lists designate specified products as preferred products that are at least as efficacious as non-preferred drugs but that have the potential to provide the greatest level of net savings for the plan. These programs encourage physicians and members to switch from more expensive products to less costly but still therapeutically equivalent products. As connectivity between the PBM and the physician s office becomes more widespread, real-time implementation regarding formulary compliance and concurrent plan design edits will become a more effective and less cumbersome method of implementing plan sponsor programs. REDUCING UTILIZATION OF PRESCRIPTION DRUGS A number of strategies can be employed to reduce utilization in a responsible manner. One approach is simply to exclude prescription cosmetics and other lifestyle drugs. Most plans do exclude a variety of such products, but given the number of lifestyle products that continually come to market, the list of excluded products must be continually re-evaluated. Concurrent drug utilization review (DUR) programs include online edits for duplicate therapies, drug interactions, too-early refills and the like. Another concurrent program aimed at reducing unnecessary utilization is prior authorization. Prior authorization programs require a patient be a given age or have a documented diagnosis to receive a prescription for a specific drug. Retrospective DUR programs also can be implemented. Such programs are designed to identify issues pertaining to polypharmacy, drugs of concern for specific age groups and questionable use of controlled substances. Other types of initiatives can be adopted to assist payers that have a closed panel of physicians. Some plans have put physicians at risk for prescription drug costs, while others have incorporated financial incentives for physicians to better manage prescription drug costs. Challenges to including drugs in capitation and risk pools have emerged in some states through litigation and proposed legislation to prohibit or modify these reimbursement techniques. REDUCING PER-PRESCRIPTION COSTS AND UTILIZATION Persons who view prescription drugs as a virtually free good to which they are entitled have little or no incentive to worry about the cost of that drug. Consequently, one critical challenge facing the payer is to sensitize participants/members to drug costs. The most direct way of accomplishing this goal is to make the member financially responsible for part of the cost of the medications consumed. Members who are not cost-sensitive have no reason to think about whether they really need the prescription. Neither do they consider the number of units of the drug needed vs. how many might be used or whether a less expensive drug will yield the same clinical outcome as a more costly agent. Member cost share directly affects the cost of every prescription covered by plan sponsors. Every dollar the member pays for a drug is a dollar the payer does not have to pay. Despite this fact, many plan sponsors do not regularly adjust their member cost share structure. The effects of holding member cost share constant can be dramatic. The average AWP cost per prescription grew by 51.1 percent between 1996 and 2. As is shown in Figure 13, average per-prescription costs rose for all but one miscellaneous endocrines of the top 25 therapy classes. These increases ranged from 12.8 percent for cephalosporins to 88.3 percent for antidiabetics. Payers that had static member cost share levels during this period had to bear the entire burden of these increases. Between 1995 and 1998, member share of cost for clients in this report actually declined from 21.8 percent in 1995 to 2.3 percent in As payers have increased copays in the last couple of, member share of cost grew to 21 percent in 1999 and to 22.4 percent in 2. This pattern is evident among both HMO and commercial clients. However, in all, member share of cost is higher for HMO clients than for commercial clients. FIGURE 13 INCREASES IN AVERAGE PRESCRIPTION COST FROM 1996 TO 2 BY THERAPY CLASS Gastrointestinals Antidepressants Antihyperlipidemics Anti-Rheumatics (NSAIDS) Antihypertensives Antidiabetics Antihistamines Antiasthmatics Calcium Blockers Dermatologicals Narcotic Analgesics Estrogens Antivirals Cough/Cold Oral Contraceptives Anticonvulsants Beta Blockers Antineoplastics Macrolides Antianxiety Agents Penicillins Migraine Products Cephalosporins Misc. Endocrine Decongestants Other Total $ EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

43 The member share of cost generally takes the form of a front-end deductible, a copay for every prescription dispensed or a limitation on the total amount of drug costs for which the plan sponsor will pay over a year. Very few clients have a front-end deductible only about 7 percent of commercial clients and less than 1 percent of HMOs. That so few clients have a deductible is not surprising. A deductible is not member friendly in that it affects all members who use the drug benefit. Deductibles also place more of a hardship on patients who potentially must pay the full cost of a prescription instead of a much smaller copay amount. This larger payment may keep a patient from receiving a discretionary (lifestyle/cosmetic) medicine, but it also potentially deters that patient from getting a more needed medication. For the few commercial clients that did have a deductible plan, the average deductible is $82 for an individual and $174 for a family. Express Scripts clients, like other payers nationwide, have raised 2 copay levels more aggressively than in the past, particularly for branded products. In the aggregate, between 1997 and 2, MCO and commercial clients raised network copays for generics from $5.57 to $7.54 and copays for brands from $1.91 to $ MCO clients raised copays more than their commercial counterparts. Between 1999 and 2, MCO copays went from $7.6 to $7.89 for generics and from $14.84 to $16.5 for brands. Commercial clients raised their generic copays from $6.73 to $6.9 and branded copays from $12.2 to $13.8. In the recent past, few payers adopted closed formularies that exclude significant numbers of branded drugs from coverage. As consumers have increasingly demanded access to all drugs, even fewer payers have chosen this approach. To the contrary, more plans that had closed formularies are moving to less restrictive approaches. One such approach is a three-tier copay plan. Under this scenario, a member s copay is lowest for generics (tier one), somewhat higher for preferred or neutral brands (tier two) and highest for expensive and non-preferred branded products (tier three). Members desiring tier-three products are not denied access to them as part of the covered benefit but instead are charged a premium, in the form of a higher copay, for using those products. This type of plan helps the payer either by inducing the member to use less expensive brands (tier-two drugs) or generics (tier-one drugs) or by allowing the payer to reduce costs for tier-three drugs through higher member copays. Some clients have initiated or are contemplating a four-tier copay system. This approach essentially is a variant of a closed formulary in that the member must pay 1 percent of the costs for some drugs. As in a three-tier system, there are three escalating copay amounts for generics, preferred brands and non-preferred brands. However, specific types of drugs are placed on a fourth tier. The member is responsible for paying the total cost of all these fourth-tier products. The plan does not exclude drugs from coverage; rather, all drugs are accessible but the member copay varies according to which drugs the member chooses. The advantage to members is that they benefit from the negotiated discounts for the tier-four products. Another variation of a four-tier copay system is to cover these fourth-tier drugs but charge the member a substantial copay, 5 percent-75 percent, of the cost of these products. A three-tier copay plan has become more attractive to payers because the plan sponsor still pays for the drug, albeit a lesser amount, making it perhaps more marketable than a closed formulary. Depending on the number of drugs placed on the third tier, a plan moving from a $5/$1 copay structure to a three-tier plan at $5/$1/$25 can save between 5 percent and 8 percent of its overall drug cost. The percentage of MCOs offering a three-tier copay structure rose from 36 percent in the spring of 1998 to 8 percent by the spring of The number of members enrolled in three-tier copay plans rose from 9 percent to 35 percent in this same period. According to the Scott-Levin findings, in 2 the average three-tier copayment was $7.6 for generics, $14.3 for formulary branded drugs and $29.1 for non-formulary drugs. For clients choosing a threetier copay approach, care should be taken not to set the third-tier copay level so high as to dissuade members from having essential prescriptions filled or refilled, a situation that could result in emergency room or inpatient admissions. 35 Thus, the levels at which copays are set must take into account the family income of the covered membership and the types of drugs placed on the third tier. 36 Three-tier and four-tier copay plans usually focus on whether branded products should be placed on the second, third or fourth copay tier. Much less thought or attention is paid to generic copays. For many, generic copays were set at very low amounts to encourage use of these products. This strategy was premised on the fact that generics were not only less expensive than branded products, but also were inexpensive in absolute terms. Until very recently, this strategy was sound. Now, however, not all generics are as inexpensive as others. The average AWP cost for generics in classes such as antidepressants, narcotic analgesics, estrogens, cough/cold, penicillins, corticosteroids and diuretics ranges from $2.28 to $25 (see Figure 14). However, the generic versions of many of the brands that recently have come off patent are more expensive than generics in the aforementioned classes. For example, led by an average prescription cost of $88 for ranitidine (generic Zantac ), the average generic prescription cost in the GI class was $65 in 2. Relatively high average AWP per prescription costs are also evident for generics in the antihypertensive, oral antidiabetic, calcium blocker and anticonvulsant classes. These relatively high costs are compounded by the recent large price increases seen for some generic products. In the same way that payers are adopting copay structures with non-preferred brands on a third tier, so too can they adopt benefit designs to address the disparity in the costs of generic drugs across therapy classes. Such plan designs, however, need to be carefully thought out so as to maximize the savings realized by the payer. Figure 14 shows that the classes with low cost generics and high generic fill rates are classes that have not had any significant brands lose patent protection in recent. Conversely, some of the classes with higher cost generics have had popular brands recently go generic. None of these classes currently lie in the upper right quadrant in Figure 14 where high priced generics are coupled with a high generic fill rate. The classes bolded in Figure 14 gastrointestinals, antihypertensives, antianxiety agents and antihistamines appear poised to make significant moves toward high generic cost and high generic fill rate status in the next couple of. Each class has a current popular brand 34 Scott-Levin. 2 Managed Care Formulary Drug Audit. 35 Roe Fairman KA, Motheral BR, Teitelbaum F. One size fits most: commercially insured enrollees respond to a three-tier drug copayment. Presented at: Managing the Pharmacy Benefit January. Tucson, Arizona. 54 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 55

44 due to go off patent soon Prilosec in the gastrointestinal, Prozac in the antidepressant, Prinivil /Zestril in the antihypertensive, BuSpar in the antianxiety and Claritin in the antimistamine classes, respectively. With the exception of antihistamines, in each of these classes, generics have already been increasing at rates greater than the rate of all generics combined. As the average generic prescription cost rises in some therapy classes, the logic of varying generic copays becomes more compelling. Indeed, unless generic copays are raised for some generic products relatively soon, it will be very difficult for plan sponsors to attain or maintain a desired level of member cost share. To deal with changing cost of generic products, payers should consider instituting higher copays for generics that cost more than a set amount. For example, a copay of $15 could be levied for any generic product that costs more than $15. A copay of, for instance, $3 could apply to generic products that cost less than $15. This type of two-tier generic copay can be combined with a preferred brand/non-preferred brand copay structure to form a four-tier copay. FIGURE 14 GENERIC FILL RATE AND GENERIC AWP PER PRESCRIPTION FOR SELECTED THERAPY CLASSES 2 $7 $6 $5 $4 $3 $2 $1 Antihyperlipidemics Antiasthmatics Oral Contraceptives Antidepressants Macrolides Dermatologicals Estrogens Antihistimines Oral Antidiabetics Antihypertensives Gastrointestinals Migraine Products Calcium Blockers Anticonvulsants Thyroid Anti-Rheumatics (NSAIDS) Cephalosporins Cough/Cold Penicillins Beta Blockers Narcotic Analgesics Antianxiety Agents Corticosteroids Diuretics $ Another approach that payers can adopt to keep pace with increases in the average cost per prescription is co-insurance a percentage member copay. Clients that adopt co-insurance do not have to worry about inflation creep because the member automatically assumes a constant percentage of per-prescription cost increase. Only 3 percent to 4 percent of HMO, PPO and indemnity clients have co-insurance plans, 38 because co-insurance is not member friendly. That is, because the member pays a percentage of the cost of a prescription and the cost of most medicines changes once or twice a year, the member never knows how much she will have to pay for that prescription at any point in time. 38 Levitt L, Holve E, Wang J, Gaebel JR, Whitmore HH, Pickreign JD, Miller N, Hawkins S. Employer Health Benefits. 2 Annual Survey. Menlo Park, California: The Kaiser Family Foundation and Chicago: The Health Research and Educational Trust. 2. An additional opportunity to reduce cost and utilization is by augmenting a mandatory generic program with a closed formulary, which limits the single-source drugs for which the plan sponsor will pay. A payer can choose to exclude from coverage more expensive branded products for which less costly therapeutic alternatives are available. An even more aggressive strategy is to deny coverage for entire classes of drugs, such as those to treat baldness or obesity. A payer adopting a closed formulary must have medical override protocols to deal with instances in which the physician determines that a patient must have the non-covered drug. The amount of saving from this strategy is directly related to the degree of restrictiveness of the formulary. DEFINED BENEFIT CONTRIBUTION AND MEMBER CHOICE Defined contribution is a term that means somewhat different things to different people. Generally, defined contribution implies that the employer provides a fixed amount of money to purchase an employee s healthcare coverage. One form of this strategy is that the employer literally hands over this fixed employer payment directly to the employee. In theory, the amount of the employer s contribution is an actuarially derived amount predicated on the level of insurance the employer determines is appropriate, as well as on the percentage of that cost the employer thinks it should pay. In turn, it is the employee s responsibility to determine what health coverage packages are available and which packages are appropriate for him/her, and then to pay for the coverage selected. If the coverage is less than the employer s payment, the employee pockets the excess employer contribution. If the coverage premium is higher than the employer s contribution, the employee must pay the difference. The richer the coverage the employee desires, the higher the premium and therefore the greater the employee s share of that premium. Although it caps the employer s financial exposure, this strategy places the employee in the difficult position of having to purchase health insurance without the leverage of numbers enjoyed by an employer who is negotiating rates for many lives. Without a government-mandated set of coverages, risk-pooling plans and regulation of premiums, the employee may be unable to find affordable health insurance with adequate coverage. Alternatively, if enough employers adopt this tactic, the medical provider/insurance industry may fill this need. If so, government likely would have to regulate these providers to ensure their financial viability as well as the quality of care they deliver. A second way that defined contribution can be operationalized is similar to the first in two ways: the employer fixes the level of contribution it will provide; and the member has a choice. However, instead of handing over the amount to the employee and expecting the individual to purchase coverage, the employer negotiates with various insurers for different coverage packages. These packages offer more coverage at higher rates or less coverage at lower cost. The employee then chooses which of these packages to purchase and pays the difference between the premium and the amount of the employer s contribution. This approach still fixes the employer s cost and gives the employee choice, but it has the advantage of leveraging a large number of lives to negotiate better insurance rates. It also takes the burden off of the employee to identify and analyze the various insurance packages that are marketed and determine which is best for his or her family. This is the approach that is extant for federal employees. 56 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 57

45 This latter strategy can be applied in a carved-out pharmacy benefit context. The employer offers its workers multiple coverage options but caps the employer contribution at a set amount. This approach responds to consumer choice at the same time that it ties pharmacy use more directly to member financial responsibility. For example, an employer could provide one package for all drugs, regardless of the type of condition the drug treats and another that excludes coverage of drugs for which there are less expensive alternatives and for drugs used for cosmetic purposes. In either case, the employer will contribute the same amount of money. The employee selecting the richer benefit that includes all drugs or drugs that treat cosmetic conditions pays the incremental costs attached to the coverage of these drugs. This approach provides the employee open access to all drugs, but places part of the financial burden on the employee for his or her choices. One important consideration that must be taken into account when adopting this strategy is whether to maintain some element of insurance in the pricing decision. A key assumption in insurance is that the price of the benefit should be spread across both the healthy and sick or, put another way, between low and high utilizers. This principle entails low utilizers subsidizing the costs of high utilizers. Regardless of the method employed, payers have been and will continue to pass along to patients an ever-growing financial responsibility for the prescription drugs consumers take for granted as being readily accessible and inexpensive. Depending on how the financial shift is accomplished, those who can least financially afford to pay this extra amount might be forced to do without much-needed medications. Consequently, payers must carefully consider the demographic makeup of their employee and dependent populations, as well as the types of drugs that may be placed on a third tier. 58 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

46

47 a ppendix A Drug Therapy Class Review 59

48 DRUG THERAPY CLASS REVIEW In 2, the top 25 therapy classes accounted for more than 8 percent of total AWP prescription costs. The data in this Appendix depict the cost and utilization trends for these classes from 1996 through 2. The discussion of these therapy classes primarily addresses the changes that occurred between 1999 and 2. Drugs that are now in the pipeline that may significantly impact these classes over the next several are also discussed. The data included in these analyses include all drugs, both common and new. TABLE A1 COST PER PRESCRIPTION AND PMPY COST FOR MAJOR THERAPY CLASSES THERAPY CLASS AWP/RX AWP/RX CHANGE $ PMPY $ PMPY CHANGE Gastrointestinals $16.6 $ $34.23 $ Antidepressants $72.55 $ $33.68 $ Antihyperlipidemics $82.37 $ $26.17 $ Anti-Rheum (NSAIDS) $58.9 $ $17.93 $ Antihypertensives $39.96 $ $2.37 $ Antidiabetics $51.57 $ $14.82 $ Antihistamines $54.48 $ $13.96 $ Antiasthmatics $46.96 $ $13.67 $ Calcium Blockers $54.79 $ $13.77 $ Dermatologicals $42.94 $ $11.79 $ Narcotic Analgesics $24.48 $ $9.24 $ Estrogens $22.59 $ $9.59 $ Antivirals $ $ $1.29 $ Cough/Cold $24.64 $ $9.3 $ Oral Contraceptives $31.17 $ $9.18 $ Anticonvulsants $66.73 $ $7.13 $ Beta Blockers $31.68 $ $7.7 $ Anticancer $226.3 $ $7.1 $ Macrolides $4.9 $ $8.18 $ Antianxiety Agents $39.18 $ $6.96 $ Penicillins $22.26 $ $6.78 $ Migraine Products $ $ $6.4 $ Cephalosporins $49.64 $ $7.65 $ Misc. Endocrine $11.71 $ $5.31 $ Decongestants $47.3 $ $6.38 $ Other $34.38 $ $69.79 $ Total $46.77 $ $387.9 $ MARKET SHARE TABLE LEGEND PERCENTAGE CHANGE IN PMPY COST FROM LESS THAN 2 average AWPs (representing average prescription cost) are reported following each drug name in the legend for each Market Share Trend figure. GASTROINTESTINALS Among the most common gastrointestinal (GI) conditions are peptic ulcer disease (PUD) and gastroesophageal reflux disease (GERD). As research uncovers new compounds, drugs to treat less common GI complaints such as chronic constipation, irritable bowel syndrome (IBS) and inflammatory bowel disease are beginning to be developed. For example, Colazal (balsalazide) was approved in 2 for the treatment of ulcerative colitis an inflammatory condition of the colon. Until recently, few therapeutic options were available to treat PUD. Fortunately, one cause of peptic ulcers was identified in the 198s as a particular bacterium, Helicobacter pylori, that can be eliminated through relatively simple treatment. Current therapy involves the combination of an acid suppressor either an H2 receptor antagonist (H2RA) or a Proton Pump Inhibitor (PPI) to control excess stomach acid production and two or more antibiotics to eliminate H. pylori. A short course usually 1 days to 14 days is enough to kill the bacterium. This triple therapy not only heals ulcers, it keeps them from coming back. GERD, a disorder with symptoms similar to PUD, is caused by a loosening of the pyloric sphincter a muscular gate between the esophagus and the stomach. Normally closed, the sphincter sometimes relaxes inappropriately, allowing stomach acid to back up into the esophagus. Heartburn, chest pain, cough, swallowing difficulties and a sour taste can all result. Most people experience heartburn only occasionally, but millions of Americans suffer from frequent heartburn with more than half the cases occurring in people over the age of 45. Currently incurable, GERD can be controlled with the same drugs used for ulcers, although drug therapy for GERD is usually long term and the drug doses are higher. If it is untreated, GERD can lead to more serious complications including a condition known as Barrett s esophagus (BE). In about 8 percent to 1 percent of people who have GERD, damage from stomach acid causes cells lining the esophagus to become more like the acid-resisting cells in the stomach or small intestine. BE is considered to be a precancerous condition. Although treating the underlying GERD may relieve symptoms, slow BE progression and help prevent complications, no current treatments can reverse changes in esophageal cells. No apparent cause can be determined for some people who experience frequent heartburn, nausea, bloating or borborygmus a rumbling stomach. They may have non-ulcer dyspepsia (NUD). Thought to be related to activities like smoking, chewing gum, eating fatty or spicy foods and drinking carbonated or alcoholic beverages, NUD also may be associated with depression or anxiety. It seems to be more prevalent during times of stress or fatigue. While treatment with the same drugs used for PUD and GERD can relieve symptoms of NUD, it is likely to recur. 6 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 61

49 FIGURE A1 THERAPY CLASS DRUG MARKET SHARE TREND GASTROINTESTINALS The ascension of PPI market share continued in 2. The market share for PPIs Prilosec (omeprazole) and Prevacid (lansoprazole) and Protonix (pantoprazole), which was introduced in 2 grew from 46.4 percent in 1998 to 55.5 percent in 1999 to 6.3 percent in 2. In 2 the AWP per prescription costs for Prilosec and Prevacid grew about 7 percent to $ and $134.23, respectively, compared to $88.9 for ranitidine. Along with an 8.5 percent increase in utilization for this class, the shift to the use of more expensive PPIs contributed an over $6 PMPY cost increase in this class. Approval for Nexium (esomeprazole), was granted by the FDA in February 21. Currently the only second generation PPI available in the United States, Nexium has indications for relieving GERD symptoms, for healing erosive esophagitis, and for eliminating H. pylori when taken in combination with amoxicillin and Biaxin (clarithromycin). It is marketed by the same company that sells Prilosec. Patent protection for Prilosec, originally scheduled to expire as early as April 21, will be extended for six months while the manufacturer conducts studies in pediatric patients. Release of a generic has been further delayed by lawsuits against potential generic suppliers. A request for OTC status for Prilosec was denied by the FDA. 2 CHANGE IN PMPY COST PMPY = $4.53 Zantac ($86.53) Axid ($18.66) Cimetidine ($83.8) Pepcid ($13.57) Ranitidine HCL ($88.9) Prilosec ($148.96) Prevacid ($134.23) Another PPI, Prevacid was given additional indications both for healing gastric ulcers and for reducing the risk of gastric ulcers associated with the use of NSAIDs. The fourth PPI to become available in the United States is Protonix, which was launched in the spring of 2. Approved only for short-term treatment of esophagitis caused by GERD, Protonix is also being used off-label for PUD and for primary treatment of GERD. In November 2, Pepcid Complete (famotidine, calcium carbonate and magnesium hydroxide) was introduced to the OTC market. This new combination, consisting of an H2RA with an antacid in a chewable tablet form, is to be taken twice a day. In the meantime, patent protection has expired for Pepcid. Both the oral and the injectable forms of famotidine, the generic for Pepcid, have been approved by the FDA. Less than a year after its approval for irritable bowel syndrome (IBS) in women, Lotronex (alosetron) was withdrawn from the market due to concern over potentially dangerous side effects. It was reportedly the cause of intestinal damage including severely obstructed or ruptured bowels. Another drug important in the treatment of GERD, Propulsid (cisapride), was withdrawn from the U.S. market in 2. Continuing concerns about heart arrhythmias and drug interactions associated with the use of Propulsid lead to the withdrawal. Future Trends Zelmac (tegaserod) is currently under review at the FDA, with final approval expected in 21. Likely to be approved for use in women with constipation-predominant IBS, Zelmac is also being studied for GERD. Helicide (bismuth subcitrate, metronidazole and tetracycline) is finishing Phase III trials for H. pylori treatment. By combining three medications into a single dose form, Helicide intended to simplify therapy. Another combination, Helidac (bismuth subsalicylate, metronidazole and tetracycline) is already on the U.S. market and a third one, Tritec (ranitidine bismuth citrate), was discontinued in 2. Mosapride and norcisapride are gastric prokinetic agents that are being studied for heartburn, nausea and other symptoms of chronic gastritis. Drugs in this class speed up gastric emptying time, similar to the recently withdrawn Propulsid. 62 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 63

50 CENTRAL NERVOUS SYSTEM As the population ages, more people will be affected by diseases that involve the neurological system. Neurological conditions can result from injuries, from chemical imbalances, from physical degeneration of the nervous system or from a combination of causes. They include conditions like Alzheimer s disease, Parkinson s disease, narcolepsy, multiple sclerosis (MS), attention deficit/hyperactivity disorder (ADHD), as well as depression, anxiety, epilepsy and psychoses. Intensive research during the 199s and new discoveries from the human genome project hold promise for advances in treatment of many central nervous system (CNS) conditions. Dementia is simply the deterioration of intellect, often associated with declines in emotional and physical functioning. The most common cause of dementia is Alzheimer s disease. Currently, treatment for Alzheimer s centers on relieving symptoms. It is not curable with present therapy options, but the drugs that are available may help to slow its progression. Exelon (rivastigmine) was approved for Alzheimer s in April 2. Exelon selectively inhibits an enzyme called acetylcholinesterase in areas of the brain known to be damaged by Alzheimer s disease. Patients respond with more predictable physical behavior as well as with better cognition. During clinical trials, however, a significant percentage of patients treated with Exelon experienced GI side effects such as anorexia, nausea and vomiting. Another acetylcholinesterase inhibitor that also modulates nicotinic receptors is called Reminyl (galantamine). At this time, any clinical advantages that may be offered by the dual mechanism of action remain unknown. Reminyl was approved in the first quarter of 21 for the symptomatic treatment of mild to moderate dementia of the Alzheimer s type. At least a dozen other drugs are in development for Alzheimer s. Among them: Akatinol (memantine) is an N-methyl-D-aspartate (NMDA) receptor antagonist in development for the treatment of dementia caused by several neurologic conditions. An NDA for its use in people with Alzheimer s disease may be filed as early as the end of this year. Neotrofin (leteprinim) is in Phase III trials for mild to moderate dementia of Alzheimer s and in earlier stages of trials for spinal cord injuries. Given orally, Neotrofin stimulates the production of multiple growth factors at the appropriate target sites in the CNS. Parkinson s disease sometimes called Parkinsonism results from a deficiency of the neurotransmitter dopamine. Characterized by tremor, rigidity and extreme slowness of movement, its incidence rises in people older than 5 of age. A new delivery method is being developed for selegiline, a monoamine oxidase B (MAO-B) inhibitor. Selegiline is available on the U.S. market as the generic and as the brand product, Eldepryl. The new form, Zelapar (selegiline hydrochloride flashtab), delivers a low dose that dissolves rapidly in the mouth not only allowing it to begin working more quickly than conventional oral dosage forms, but also potentially eliminating the difficulty that many Parkinson s patients have in swallowing tablets or capsules. A drug similar to selegiline, called rasagiline mesylate or TV-112, has finished U.S. Phase III trials in patients with early Parkinson s disease that has not been treated previously. It will be submitted to the FDA for once-a-day dosing. Late clinical trials continue for people with more advanced Parkinson s or those who have already been treated with levodopa. Once misunderstood and even dismissed as trivial, narcolepsy is now recognized as a serious neurological condition typified by chronic, exaggerated sleepiness during daylight hours. Dreamlike hallucinations, sleep disruptions and transient weakness or paralysis are also common narcolepsy symptoms. Until recently, drug treatments for narcolepsy were limited mainly to antidepressants and stimulants like amphetamines. The 1999 approval of Provigil (modafenil), which seems to have a different mechanism of action than traditional stimulant-type drugs, provides an alternative for many people with narcolepsy. An NDA was submitted in October 2 for the FDA to review another narcolepsy drug, Xyrem (sodium oxybate). If approved, it is likely to be designated as a controlled substance. In multiple sclerosis (MS), nerve transmissions are interrupted when swelling and scar tissue damages the myelin tissue that surrounds nerve fibers in the CNS. Although MS has no cure, beta interferons have proved useful for treating it. Last fall, a drug already approved for treating prostate cancer was given an additional indication for the treatment of MS. Novantrone (mitoxantrone for injection concentrate) can help reduce relapses and neurologic dysfunction in people with specific types of progressive MS. In the pipeline for MS is another beta interferon, Rebif (recombinant interferon beta-1a). Although a Biologics License Application (BLA) the equivalent of an NDA for a biologically derived product has been filed for Rebif, its approval may depend on the expiration of orphan status for a currently available beta-interferon, Avonex (interferon beta-1a), which is scheduled for 23. Long known to be a condition that affects children and adolescents, ADHD is now also recognized as affecting adults, too. Although behavioral counseling and drug therapy each play important parts in treating ADHD, treatment for both children and adults with ADHD centers on improving core symptoms not necessarily on controlling behavior. Stimulants such as methylphenidate are the mainstays of treatment. Antidepressants may also be useful as adjunctive treatment for some patients. Three extended-release formulations of methylphenidate, the drug in Ritalin, were launched in 2. Metadate, Concerta and Methylin all offer once-daily dosing so children will not have to take medication to school. Each is produced in various strengths, allowing doses to be individualized. 64 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 65

51 Phase III trials were completed in early 21 for a methylphenidate patch, MethyPatch (methylphenidate transdermal delivery system). An NDA for its use in treating ADHD is not likely to be filed with the FDA before next year, however, since further testing may be needed. In Phase II trials for treatment of adult ADHD is a selective histamine H3 receptor antagonist, Perceptin (GT-2331). Further investigations are planned for its use in dementias and sleep disorders. Psychoses such as paranoia or schizophrenia are severe disorders that may involve distortions of reality, fluctuations in personality and atypical social behaviors. Older antipsychotic drugs can be associated with serious side effects, but newer drugs are more targeted they may be more effective with fewer side effects. In February 21, an atypical antipsychotic called Geodon (ziprasidone) formerly named Zeldox was approved by the FDA in both oral and injectable forms for schizophrenia. An antagonist of both serotonin and dopamine, Geodon is effective in treating anxiety and depression associated with schizophrenia. Its manufacturer has also applied for an indication in treating agitation. The product labeling for Geodon will carry a warning for cardiac side effects. In 2, Zyprexa (olanzapine), already approved for schizophrenia, won additional FDA approval for the treatment of acute mania in bipolar disorder. It is also under FDA consideration for agitation associated with psychotic illnesses. An NDA is expected to be submitted in 21 or early 22 for Zomaril (iloperidone), an antipsychotic agent in Phase III clinical trials for the treatment of schizophrenia. A new antipsychotic agent, aripiprazole, is currently in Phase III trials. With a different mechanism of action than most currently available antipsychotic drugs, aripiprazole appears to be effective for schizophrenia and also seems to cause relatively few side effects. ANTIDEPRESSANTS Clinical depression involves imbalances in chemical neurotransmitters especially serotonin, norepinephrine and dopamine. Some antidepressant drugs tricyclics (TCAs) and monoamine oxidase inhibitors (MAOIs) have been in clinical use for nearly 5. Although antidepressant drugs affect more than one neurotransmitter, the newer ones can be grouped into five general classes based on their primary activity. For most patients, these newer agents offer reduced side effects, low risk if overdosed, broader effectiveness and more selective activity than TCAs or MAOIs. The classes are: Selective Serotonin Reuptake Inhibitors (SSRIs) Prozac (fluoxetine), Paxil (paroxetine), Zoloft (sertraline), Luvox (fluvoxamine) and Celexa (citalopram) Serotonin Reuptake Inhibitors (SARIs) Desyrel (trazodone) and Serzone (nefazodone) Selective Norepinephrine Reuptake Inhibitor (SNRI) Effexor (venlafaxine) Norepinephrine and Dopamine Reuptake Inhibitor Wellbutrin (bupropion) Noradrenergic and Specific Serotonin Antidepressant Remeron (mirtazapine) A guideline paper, Pharmacological Treatment of Acute Major Depression, was printed in the May 2 issue of Annals of Internal Medicine. In it, the American College of Physicians and the American Society of Internal Medicine concluded that TCAs and SSRIs are equally effective. The choice of drug treatment, they recommend, should be based on side effects, patient response and physician/patient preference. Treatment should be evaluated after six weeks. Positive response warrants continuation of drug therapy for four months or longer following acute remission. If improvement in depressive symptoms is not evident after six weeks, the dose of drug can be increased or a different drug can be tried. FIGURE A2 THERAPY CLASS DRUG MARKET SHARE TREND ANTIDEPRESSANTS PMPY costs for antidepressants escalated another 17.4 percent in 2, reaching $ A little less than half of this increase was due to rising utilization of drugs in this class. Utilization of Prozac, which peaked at 27.4 percent market share in 1994, continued its decline to 17.4 percent in 2. Market shares of Zoloft and Paxil remained stable at a combined 2 market share of 31.5 percent, while the use of the newer agent, Celexa, grew to 7.9 percent; the combined market share of Effexor and Effexor XR rose to 7.4 percent. The product whose market share has grown the most from 2.5 percent in 1997 to 7.5 percent in 2 is Wellbutrin SR (bupropion, extended release). The primary reason for the growth is its offlabel use as a smoking cessation tool, despite the availability of OTC products and of Zyban (bupropion, extended release), which is not covered by many health plans. In an unusual move, the FDA approved fluoxetine in the same strength and dosage form as Prozac under a new brand name, Sarafem. Indicated for the treatment of premenstrual dysphoric disorder, Sarafem was re-named to avoid negative connotations that might be associated with using an antidepressant. 66 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $39.55 Prozac ($116.54) Zoloft ($84.42) Paxil ($82.66) Amitriptyline HCL ($12.89) Celexa ($73.22) Trazodone HCL ($25.17) Effexor/XR ($95.94)

52 Another form of Prozac received FDA approval for once weekly dosing relapse prevention during the continuation phase of treatment for patients whose depression has stabilized with other treatment. Prozac Weekly TM, contains 9mg of fluoxetine formulated with an enteric coating that allows gradual drug release over seven days. It was approved in February 21. Late in 2, investigational trials for r-fluoxetine were abandoned after potentially serious cardiac side effects were associated with its use. A rapid-dissolving form of Remeron Remeron SolTab TM has been approved. Launch is expected in the first half of 21. Future Trends The manufacturer of Paxil has requested approval for a new indications in post-traumatic stress disorder. Application has been submitted to the FDA for the approval of Luvox for depression. It is currently indicated for obsessive-compulsive disorder in adults and children. Tentative approval for a generic, fluvoxamine, was given in November 2, and the generic product has been introduced to the market. Phase III trials have been completed for an SNRI, duloxetine. Also in development is a combination of fluoxetine and the antipsychotic drug, Zyprexa (olanzapine). If approved, the new combination will be used to treat patients who have depression and psychosis or who have depression resistant to other therapy. An NDA for escitalopram, an isomer of Celexa, may be filed during the first half of 21. Results from Phase III trials of escitalopram show significant effectiveness for patients with depression. Vestra (reboxetine) is still under FDA review for depression after new information was submitted at the request of an FDA advisory panel. ANTIANXIETY AGENTS Anxiety disorders are characterized by chronically exaggerated feelings of fear or apprehension. Hereditary, biological and environmental factors can all influence the development of anxiety disorders. Obsessive-compulsive behaviors, panic attacks, generalized anxiety and phobias are among the common types of anxiety disorders. FIGURE A3 THERAPY CLASS DRUG MARKET SHARE TREND ANTIANXIETY AGENTS PMPY costs for this class grew 15.1 percent in 2, although PMPY utilization increased by only 5.9 percent. The generics market share remained fairly constant at 82.9 percent. In the summer of 2, an antidepressant, Effexor XR (venlafaxine, extended release) gained FDA approval for generalized anxiety disorder. Future Trends In March 21, a federal court negated a new patent for BuSpar (buspirone), opening the way for generics to be introduced. The manufacturer of BuSpar had listed the patent with the FDA in a tactic to delay or prevent generic marketing. Phase III trials for a transdermal patch dosage form of BuSpar have been completed. Studies are being conducted on the use of the antidepressant Prozac (fluoxetine) in treating generalized anxiety disorder. 68 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $8.1 Generic ($31.55) BuSpar ($115.9) Xanax ($72.65) Valium ($53.95) Ativan ($62.47)

53 INFLAMMATION AND PAIN MANAGEMENT Pain can be a symptom of almost every major health condition. It can be acute or chronic, mild or disabling, localized or general. Everyone experiences pain differently what is tolerable for one person may be excruciating for someone else. In January 21, new standards for the treatment of pain were implemented. Developed by the Joint Commission on the Accreditation of Healthcare Organizations, the standards require an initial assessment of pain levels followed by regular monitoring of and treatment for pain experienced by patients in hospitals or other healthcare institutions. Patient-reported pain levels are recorded in charts as a vital sign just like blood pressure and temperature readings. Designed to address the problem of inadequate pain control, the standards will likely lead to increased use of opiods in outpatient settings, as well. While proponents of the new standards contend that the abuse of controlled substances among patients being treated for pain will not increase, national law enforcement officials are concerned that the theft of prescription pain drugs for recreational use is on the rise. In accounts that were highly publicized in early 21, the popular press reported a surge in thefts involving narcotic analgesics. Manufacturers of the drugs are working with government officials to address the problem. In December 2, the FDA approved a new indication for Botox (botulinum toxin type A) as well as a similar new drug, Myobloc (botulinum toxin type B), for the treatment of cervical dystonia. Also called spasmodic torticollis, cervical dystonia causes painful contraction of head, neck and shoulder muscles. Injected botulinum toxin interrupts nerve signals to the affected muscles, allowing them to loosen. Botox has orphan drug status for the treatment of muscle contracture in children with cerebral palsy. The biological response modifier, Enbrel (etanercept) has been granted a new indication for the initial treatment of moderate rheumatoid arthritis. Because the demand has been greater than expected, the manufacturers of Enbrel have begun to enroll patients in a special distribution program. Those patients who register will be considered first if temporary shortages of Enbrel occur. A drug that has long been used to treat rheumatoid arthritis in adults is now indicated for children, too. Azulfidine EN-Tabs (sulfasalazine delayed release) were FDA approved in 2 for the treatment in children age 6 and older of juvenile rheumatoid arthritis that has not responded to therapy with NSAIDs. In January 21, a third hyaluronic acid derivative, Supartz (sodium hyaluronate) was approved for the treatment of osteoarthritis of the knee. Like its predecessors, Synvisc (hylan GF 2) and Hyalgan (sodium hyaluronate), Supartz is a viscous cushioning substance that must be injected directly into affected knee joints. Future Trends In June 2, the FDA issued an Approvable letter for ziconotide, the first neuron-specific N-type calcium channel inhibitor. Derived from the venom of the marine cone snail, ziconotide will be used only in hospitals for treatment of severe chronic pain and for pain associated with head trauma. Prosaptide TX 14 (A), the first in another new class of pain relievers, has completed Phase II trials. In animal studies, prosaptides protected nerves, relieved pain associated with nerve stimulation and even promoted regeneration of damaged nerve fibers. Now entering Phase III studies, prosaptide is being investigated for a number of pain syndromes, such as diabetic neuropathy, accidental nerve injuries and nerve damage caused by chemotherapy. ABT-594, a synthetic adaptation of epibaditine toxin from the skin of poisonous South American frogs, shows promise in early development for pain management. In a new class called cholinergic channel modulators, ABT-594 stops pain signals from reaching the brain. Investigators report morphine-like efficacy without addiction. Currently completing Phase II trials, frakefamide (BCH-3963), represents a unique drug class whose members act on pain receptors located outside the brain and spinal cord. Since frakefamide and similar drugs do not affect the CNS, they are not expected to produce side effects such as sedation and respiratory depression that can occur with the use of narcotic analgesics. ANTI-RHEUM (NSAIDS AND COX-2S) Osteoarthritis (OA) and rheumatoid arthritis (RA), both characterized by joint damage, stiffness and pain, are the two most common forms of arthritis. For most forms of arthritis, treatment begins with pain management. Non-steroidal anti-inflammatory drugs (NSAIDs) are very effective at relieving most types of mild to moderate pain, but they can cause stomach problems for some people. The newer cyclo-oxygenase 2 inhibitors (COX-2s), Celebrex (celecoxib) and Vioxx (rofecoxib), offer similar pain relief with less chance of stomach complications from chronic use. FIGURE A4 THERAPY CLASS DRUG MARKET SHARE TREND ANTI-RHEUM (NSAIDS) 7 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST 2PMPY = $24.72 Celebrex ($93.75) Vioxx ($83.3) Ibuprofen ($14.67) Naproxen/Sodium ($5.19) Relafen ($77.97) Daypro ($87.37) 37.9

54 PMPY costs for anti-inflammatories grew by 37.9 percent to $24.72; this rate of growth was the highest experienced by any of the top 25 therapy classes. Only about one-third of this rate of increase is attributable to rising utilization. This dramatic cost increase was driven primarily by the use of newly introduced more expensive COX-2 products Celebrex and Vioxx. The average cost for both products rose about 1 percent to $93.75 for Celebrex and $83.3 for Vioxx, compared to the AWP cost of $14.67 for ibuprofen and $55.32 for naproxen. Since being introduced in 1999, the combined market for Celebrex and Vioxx has grown to 39.6 percent. Since 1998, the combined market share for Relafen (nabumetone), Lodine (etodolac), Lodine XL (etodolac extended-release) and Daypro (oxaprozin), all branded products, was cut in half to under 1 percent in 2. A generic for Lodine (etodolac) was marketed in 2; a generic for Daypro (oxaprozin) was approved but not launched as of March 21; and patent protection for Relafen (nabumetone) has expired although its generic has not been approved. Mobic (meloxicam) was approved in 2. Indicated for relief of the signs and symptoms of OA, Mobic will compete with generic NSAIDs as well as with COX-2s. Early in 21, Remicade (infliximab) was granted a new indication in combination with methotrexate, for slowing the development of joint damage in patients with moderate to severe RA that has not shown improvement when treated with methotrexate alone. Originally approved for the second-line treatment of Crohn s disease an inflammatory bowel disease Remicade is a monoclonal antibody with activity against the inflammation associated with some autoimmune conditions. Future Trends The FDA has requested additional studies to support a biological license application (BLA) that was filed in late 1999 for Kineret (anakinra). A BLA is the equivalent of an NDA for products derived from biological material such as a protein or nucleic acid. Kineret is an interleukin-1 receptor agonist (IL-1ra) that has demonstrated the potential to reduce bone and cartilage destruction as well as to decrease inflammation in patients with RA. If approved, Kineret will compete with Enbrel and Remicade in the rapidly growing RA market. Additional COX-2s are in various stages of development. The closest to market is probably parecoxib for which an NDA was submitted in October 2. Its manufacturer anticipates that approximately one year will be needed for FDA review. An injectable product, parecoxib is intended for the management of mild to moderate postsurgical pain and, in combination with opiods like morphine, for the management of more severe postsurgical pain. Valdecoxib, a prodrug of parecoxib, is an oral agent in Phase III testing for pain from several conditions including dysmenorrhea, dental pain, OA and RA. An NDA for valdecoxib is expected to be filed in 21. Also in Phase III clinical trials, another COX-2, etoricoxib (MK-663), has been effective in treating acute dental pain and in managing chronic pain of both OA and RA. An NDA for it, too, may be filed by the end of 21. Early in development is another new class of anti-inflammatory drugs called COX/LO inhibitors. By blocking both COX-2 and another enzyme, 5-lipoxygenase, drugs in this class inhibit the production of both prostaglandins which stimulate pain and inflammation and leukotrienes which cause stomach damage. ML 3 is a COX/LO inhibitor undergoing Phase III clinical trials early in 21. An NDA filing for pregabalin in the treatment of neuropathic pain will be delayed after Phase III trials were put on clinical hold early in 21. The FDA requested further investigation of pregabalin-treated test animals that appear to have developed more tumors than control animals. In an effort to avoid the stomach irritation caused by oral dosage forms, manufacturers are beginning to develop topical forms of NSAIDs and other pain relievers. An NDA is pending for Pennsaid (diclofenac gel) while the manufacturer provides more information to the FDA. Pennsaid has been approved in Europe. Benefen is the brand name for an ibuprofen gel being investigated for OA. Latranal, an undisclosed combination of topical pain relievers, begins Phase II trials in the U.S. this year. In addition, a topical form of clonidine is undergoing new trials for supplemental information requested by the FDA. To be indicated initially for the treatment of neuropathic pain, clonidine gel also may be investigated for arthritic pain. NARCOTIC ANALGESICS Among the most effective painkillers known, narcotics also produce potentially serious side effects such as respiratory depression. If they are used improperly, they can be both physically and psychologically addicting. Once reserved for intractable pain, narcotics are beginning to be used more widely. New guidelines for pain management will probably lead to increased use of narcotics in ambulatory populations. According to a consensus statement from the American Academy of Pain Medicine and the American Pain Society, however, the addiction is not likely to result in people who use narcotics for pain relief. FIGURE A5 THERAPY CLASS DRUG MARKET SHARE TREND NARCOTIC ANALGESICS 72 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST 2PMPY = $12.46 Generic ($15.52) Ultram ($54.9) 34.8 Darvocet-N 1 ($37.7)

55 The increasing cost escalation in the narcotic analgesic class continued in 2. After growing 2.6 percent between 1997 and 1998, and another 31.1 percent in 1999, the PMPY cost for narcotic analgesics grew yet another 34.8 percent in 2 to $ PMPY utilization for this class grew by 9.9 percent. In contrast the average prescription cost rose by about 23 percent. Per prescription cost increases of 21 percent were seen for generics, which accounted for a substantial but declining 71.3 percent of the total class market share. In 2 Ultram (tramadol) held its leading position among branded products with a 7.3 percent share of the market. The market share for OxyContin (oxycodone controlled release) only grew from 2 percent to 3.3 percent. At an average AWP cost per prescription of $27.42, even this slight rise in use contributed to the overall increase in the class cost per prescription to $3.9. Future Trends An oral opiod that may not have as much associated addiction potential as current narcotics is in Phase III of clinical testing. An application for the approval of Dirame (propiram) may be filed this year for FDA consideration in the treatment of moderate to severe pain. MorphiDex (morphine and dextromethorphan) is in additional testing after an original 1998 NDA was denied by the FDA. A resubmission may be as early as next year. New delivery forms for narcotics are also being investigated. For example, an NDA is under FDA review for Morphelan ROER TM (morphine rapid-onset, extended-release) that would be dosed on a once daily schedule. Another study involves the AERx system, an investigational device to deliver morphine through inhalation. It is in Phase II trials. MIGRAINE PRODUCTS Migraines are among the most debilitating types of headache. Resulting from contraction, then expansion and inflammation of blood vessels in the brain, migraines usually follow a distinctive pattern. Most commonly affecting one side of the head, migraines are frequently associated with nausea, vomiting and exaggerated sensitivity to light, sound and smells. Some are announced by a prodome or aura a preliminary set of symptoms that can include visual disturbances and numbness or tingling in the hands and feet. The tendency to have migraines can run in families, and women are more likely than men to get them. FIGURE A6 THERAPY CLASS DRUG MARKET SHARE TREND MIGRAINE PRODUCTS The PMPY cost of migraine products rose by 1.9 percent from $6.4 in 1999 to $7.9 in 2. The market share for Imitrex (sumatriptan injection, nasal spray and tablets) continued to decline to 47.1 percent. Lost market share has gone to Zomig (zolmitriptan), Amerge (naratriptan) and Maxalt / Maxalt MLT (rizatriptan), which saw their combined market share rise 26.9 percent in 2. A melt-in-the-mouth formulation of Zomig Zomig-ZMT (zolmitriptan orally disintegrating tablets) was approved by the FDA in February 21. Future Trends Last May, Miguard (frovatriptan) received Approvable status for treatment of migraines. Final FDA approval is pending the review of additional information that was provided by the manufacturer late in 2. Two other new triptans, Relpax (eletriptan) and Axert (almotriptan), were both found Approvable in December 2. Depending on when final approval is given, one or both may be launched in the second half of EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST 1.9 2PMPY = $7.9 Imitrex ($19.67) Generic ($17.16) Zomig ($156.14) Amerge ($185.92) Maxalt/MLT ($136.56) Midrin ($18.37)

56 ANTICONVULSANTS Epilepsy is a broad term for the susceptibility to have recurring seizures. The result of dysfunctions in the brain s electrical conduction, seizures often have no clear cause. They can begin or end at any age and they may take many different forms including convulsions, muscle spasms and altered consciousness. Since 1993, several new anticonvulsant drugs also called anti-epilepsy drugs (AEDs) have been introduced in the United States. All of the new drugs are approved for use in combination with other AEDs, but only a few are indicated for monotherapy. Generally, treatment for people who are newly diagnosed with a seizure disorder begins with older traditional AEDs like Tegretol /Tegretol XR (carbamazepine), Dilantin (phenytoin) and Depakene or Depakote (valproic acid derivatives). With established efficacy and lower cost, these older drugs offer general safety in both children and adults. Many of the newer agents, however, offer safer sideeffect profiles and lower potential to interact with other drugs. Frequently, treatment requires the use of more than one drug at a time. FIGURE A7 THERAPY CLASS DRUG MARKET SHARE TREND ANTICONVULSANTS CHANGE IN PMPY COST 2 PMPY = $ Generic ($39.78) Neurontin ($118.24) Depakote/Sprinkle ($95.2) Dilantin ($28.5) Tegretol/XR ($49.35) After growing in cost by 29 percent in 1999, anticonvulsant PMPY costs increased by another 29.9 percent to $9.26 in 2 due to increases in both use and cost per prescription. Neurontin (gabapentin) continued to gain market share, attaining a 21.5 percent level in 2 up from 17.1 percent in Market share for generic products also grew to 3.2 percent. However, some generics may not be absorbed in the same ways as their branded counterparts. The market share for Depakote, Dilantin, Tegretol, Tegretol XR (carbamazepine extended release) and Klonopin (clonazepam) continued to decline from 54 percent in 1998 to 36.6 percent in 2. In a move to preserve brand-only status for Neurontin, its manufacturer obtained a new patent from the FDA. The generic company that has approval for gabapentin countered with a lawsuit, but no decision has been reached. Production of Mesantoin (mephenytoin), which had been used for patients whose seizures were not controlled by other drugs, was discontinued during 2. The manufacturer stopped making it because it had lost market share to newer drugs that have fewer side effects. Future Trends An NDA for pregabalin, derived from Neurontin and made by the same manufacturer, could be filed this year for the first of several indications including epilepsy. Phase II clinical trials continue for ganaxolone (CCD 142) for the treatment of migraine headache as well as of various forms of epilepsy. Ganaxolone already has orphan status for treating infantile spasms a type of epilepsy that first appears between three months and six months of age. 76 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 77

57 CARDIOVASCULAR Many different but often interrelated conditions fall into the category of heart disease. Involving the blood vessels as well as the heart itself, heart problems are more accurately described as cardiovascular conditions. Frequently, they are associated with other serious diseases such as diabetes. Some ethnic groups are more prone to cardiovascular problems, and young or middleaged men suffer more cardiovascular disease than women in the same age groups do. Still cardiovascular diseases are the number one cause of death for both sexes and in all ethnic groups. Typically chronic with few or no early symptoms, the effects of cardiovascular diseases sometimes are seen abruptly in a heart attack or a stroke. Primarily regarded as diseases of aging, cardiovascular conditions are being diagnosed at younger ages. Some experts are concerned that a rise in obesity among U.S. children and adolescents will lead to earlier cardiovascular problems. Among the most common cardiovascular conditions are: Angina: Squeezing pressure or chest pain that results from an inadequate supply of oxygen to the heart muscle. Arrhythmias: When the electrical system that controls the heart is interrupted, the heart can beat too rapidly, too slowly or unpredictably. Blood flow is erratic, and life-threatening results can occur. Congestive Heart Failure (CHF): A heart weakened by coronary artery disease, hypertension or numerous other conditions gradually loses the ability to beat hard enough to circulate blood effectively throughout the body. Coronary Artery Disease (CAD): When cholesterol and other substances build up inside the blood vessels that supply the heart, the resulting clogged, stiffened and damaged arteries can no longer provide adequate oxygen. Heart function decreases. Hypertension: Usually asymptomatic, hypertension or high blood pressure often has no apparent cause. Hypertension increases the workload on the heart, which can result in heart attack or stroke. Myocardial Infarction (MI): A sudden MI, or heart attack, occurs if the blood supply to the heart is blocked, and oxygen cannot reach part of the heart. The part of the heart tissue deprived of oxygen dies. Numerous drug classes work on the heart or blood vessels to treat the diseases that affect the cardiovascular system. Some of the drugs are intended only for specific conditions, but many drugs can be used to treat more than one type of heart disease. The beta-blockers, for example, are used in treating hypertension, angina, MI, CHF, some arrhythmias and even non-cardiac conditions such as migraine headaches. As scientists gain new understanding of cardiovascular functioning, new classes of cardiac drugs are being developed. Generics are now available for three alpha-blockers, Hytrin (terazosin), Cardura (doxazosin) and Minipres (prazosin). Currently, alpha-blockers are used more for treating benign prostatic hyperplasia (BHP) than for cardiovascular conditions. An NDA is under FDA review for a new combination product, BiDil (hydralazine and isosorbide) that has shown significant effectiveness for African-Americans who suffer from heart failure. Future Trends Additional trials are under way for Vanlev (omapatrilat), the first drug in a new class called vasopeptidase inhibitors (VPIs). VPIs block two enzymes to help lower blood pressure and also help relieve heart failure. In original investigations, Vanlev was effective for lowering blood pressure, but its use was associated with a serious side effect, angioedema, in a few patients. The FDA requested further study. Although the original NDA was withdrawn, it is expected to be resubmitted for approval later this year. After additional investigations were done, an NDA was refiled in January 21 for Natrecor (nesiritide). It is a recombinant version of b-type natriuretic peptide (BNP), a hormone the body uses to compensate for excess fluid. Intended to relieve symptoms of congestive heart failure, Natrecor relaxes blood vessels as well as promoting excretion of excess fluid. Another new class of heart drugs is represented by Tracleer (bosentan). Belonging to a group called dual endothelin receptor antagonists (ERAs), Tracleer and drugs like it block endothelin, a naturally occurring vasoconstrictor. An NDA has been submitted for the use of Tracleer in treating pulmonary hypertension abnormally high blood pressure in the arteries that carry blood between the heart and the lungs while Phase III trials continue for its effectiveness in congestive heart failure. It will be taken orally. A second ERA, tezosentan, is in Phase III of development. Tezosentan is an intravenous drug being studied for the treatment of acute heart failure. Eplerenone is being investigated for use in hypertension, congestive heart failure and MI. Similar to an older drug called spironolactone, eplerenone blocks aldosterone receptors to increase water excretion. It is in Phase III trials in several countries. The first partial fatty acid oxidation inhibitor (pfox), ranolazine is in Phase III trials for the treatment of chronic stable angina and congestive heart failure. Drugs of its type reduce the metabolism of fatty acids forcing the body to metabolize glucose instead. As one result, the heart pumps more efficiently. Blood pressure and heart rate are affected minimally, if at all. ANTIHYPERTENSIVES Drugs used mainly but not exclusively to treat hypertension fall into several sub-classes. Angiotensin converting enzyme inhibitors (ACEIs) block production of an enzyme that raises blood pressure. They are used in congestive heart failure, hypertension and MI. In recent studies, they have demonstrated protective effects on heart and kidney function. A newer class than the ACEIs, angiotensin receptor blockers (ARBs) inhibit the same enzyme that ACEIs do but in a different way. 78 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 79

58 FIGURE A8 THERAPY CLASS DRUG MARKET SHARE TREND ANTIHYPERTENSIVES PMPY costs for antihypertensives grew at about the same pace as overall PMPY costs. Most of the 16.6 percent cost growth in this class came from the 9.6 percent rise in utilization. The market share among the myriad of products in this class changed little between 1999 and 2. Clinical studies continue to support potential new indications for ACEIs. In February 2, for instance, Zestril (lisinopril) was approved in high doses (up to 35mg once a day) for the treatment of heart failure. The following October, Altace (ramipril) received approval for reducing the risk of heart attacks in patients with known heart disease, stroke or diabetes. Altace may be used in diabetic patients with normal blood pressure. Rated as equivalent to Vasotec, the generic enalapril, reached the U.S. market in late 2. Lisinopril, the generic for Zestril and Prinivil, was granted tentative approval in January 21. It will not be marketed, though, until the expiration of the Prinivil /Zestril patent scheduled for the end of 21. Based on positive findings from the Valsartan Heart Failure Trial (val-heft), the manufacturer of Diovan (valsartan) has requested FDA approval for a new indication in treating heart failure. When Diovan was added to standard drug therapy, death and disability among members of the group receiving valsartan declined significantly. Whether other ARBs will provide similar benefits has not yet been studied. Future Trends Application for approval of a new ARB, olmesartan, was filed with the FDA in July 2. If approved, it will be indicated for hypertension. 2 8 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $23.74 Zestril ($36.38) Accupril ($38.3) Lotensin ($31.57) Vasotec ($55.53) Prinivil ($36.82) Cozaar ($53.67) Hyzaar ($53.23) CALCIUM BLOCKERS As the most abundant mineral in the body, calcium is obviously a major component of teeth and bones. It is also involved in body functions such as muscle contraction. Calcium blockers selectively affect muscles in artery walls causing them to relax. Consequently, resistance to the flow of blood goes down and so does blood pressure. Calcium blockers are also used to relieve angina and to treat some types of arrhythmia. FIGURE A9 THERAPY CLASS DRUG MARKET SHARE TREND CALCIUM BLOCKERS As has been the trend since 1994, 2 PMPY cost for calcium blockers was relatively flat. Between 1999 and 2, utilization of these products dropped by 1.9 percent. The market share for generic calcium blockers continued to increase reaching 34.1 percent in 2. Norvasc (amlodipine) continued to dominate the branded market share in this class growing to 32.8 percent in 2. Correspondingly, the market shares for Cardizem CD (diltiazem extended-release capsules) and Procardia XL (nifedipine extended release), continued to erode to 4.5 percent and 7.8 percent, respectively. A generic equivalent to Procardia XL was approved during 2. A previously marketed generic was equivalent to Adalat CC (nifedipine extended release). Because of formulation differences, the two generics are not interchangeable and only the one designated by the FDA as A rated to the corresponding brand name may be substituted for that brand. 2 CHANGE IN PMPY COST PMPY = $14.11 Future Trends Patent protection for Plendil (felodipine) is scheduled to expire in June 21. Norvasc ($57.68) Generic ($5.94) Procardia XL ($73.59) Adalat CC ($66.65) Cardizem CD ($69.74) 81

59 BETA BLOCKERS Beta blockers are useful for angina and certain arrhythmias as well as for hypertension. Once thought to worsen heart failure, beta blockers are being used more among heart failure patients in recent after ongoing studies showed their effectiveness in combination with other drugs. Beta blockers are less effective in some groups of patients and other patients are not able to tolerate their side effects. Some beta blockers are used fairly often for migraine prevention and situational anxiety. FIGURE A1 THERAPY CLASS DRUG MARKET SHARE TREND BETA BLOCKERS Generic ($3.) Toprol XL ($26.82) Tenormin ($45.85) Lopressor ($4.16) Corgard ($67.79) The overall 2 PMPY cost for beta blockers increased 15.7 percent over 1999 levels to $8.91. This growth was about equally attributable to utilization and per prescription cost increases. Despite losing some ground compared to 1999, generics continued to dominate this class with a 72.2 percent market share in 2. Among the branded products, Toprol XL (metoprolol extended-release), is the largest seller, growing steadily from a 3.1 percent market share in 1994 to 17.1 percent in 2. The already large group of generic beta blockers grew in 2 with the approvals of sotalol (generic Betapace ) and bisoprolol (generic Zebeta ). Approved in the summer of 2, Betapace AF (sotalol for atrial fibrillation) is a different oral dosage form that is not interchangeable with either Betapace or the generic. Because it may cause potentially serious side effects, Betapace AF must be given under medical supervision. 2 CHANGE IN PMPY COST PMPY = $8.91 Based on the results of the Metoprolol CR/XL (Controlled Release) Randomized Intervention Trial in Heart Failure (MERIT-HF), Toprol -XL has received additional FDA approval for therapy of stable heart failure from ischemic, hypertensive or cardiomyopathic origin. Results from the Carvedilol Prospective Randomized Clinical Survival Trial (COPERNICUS) showed that treatment with Coreg (carvedilol) reduced the risk of death or hospitalization due to heart failure by nearly a third in patients with advanced stages of the disease who were already taking an ACEI. Coreg is not due to go generic for several. Future Trends Development of esprolol, a beta blocker that would be delivered in quick-acting sublingual form, is on hold while the manufacturer seeks a partner to market the drug. In Phase II trials, esprolol was studied for treatment of angina, anxiety and migraine. ANTIHYPERLIPIDEMICS Consuming too much dietary fat can be a major contributor to cardiovascular disease. Ordinarily, the body breaks down fat from food and then fuses it to proteins. The resulting lipoproteins are carried away in the bloodstream and stored for later use. When too much fat of the so-called bad types mainly triglycerides and low-density lipoproteins (LDLs) builds up in the blood, it gradually accumulates on artery walls. As a result, arteries become stiff, constricted or even blocked and cardiovascular diseases result. High-density lipoproteins (HDLs) are considered good because they take cholesterol to the liver where it is made into bile. Raised levels of HDL generally translate into a lowered risk of coronary artery disease. The best ways to improve overall cholesterol levels are to limit dietary fat consumption, maintain a reasonable weight and exercise regularly. Such lifestyle changes are hard to implement and even harder to continue, so drug therapy is often a part of cholesterol reduction. The four main classes of drugs used to reduce cholesterol in the blood are: HMG-CoA Reductase Inhibitors (HMG CoAs), also called statins: Baycol (cerivastatin), Lescol (fluvastatin), Lipitor (atorvastatin), Mevacor (lovastatin), Pravachol (pravastatin) and Zocor (simvastatin) Bile-Acid Binding Agents: Questran (cholestyramine), Colestid (colestipol) and Welchol (colesevelam) Fibric Acid Derivatives: Lopid (gemfibrozil), Atromid-S (clofibrate) and Tricor (fenofibrate) Niacin: NiaSpan (niacin controlled release) and others 82 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 83

60 FIGURE A11 THERAPY CLASS DRUG MARKET SHARE TREND ANTIHYPERLIPIDEMICS Lipitor ($83.41) Zocor ($116.86) Pravachol ($99.8) Gemfibrozil ($66.2) Lescol ($46.44) Mevacor ($113.7) Lopid ($85.8) Fueled by a large growth in utilization, overall PMPY expenditures for antihyperlipidemics rose by 23.4 percent to $ Lipitor continued its meteoric success since its March 1997 market entry. In 1997, Lipitor claimed a 14.1 percent market share, a level that rose to 51.8 percent in 2. In contrast, the market share for Pravachol dropped from 16.4 percent in 1999 to 15.7 percent to in 2. The market share for Zocor /Mevacor dropped to 17.2 percent and for Lescol to 2.9 percent. In June 2, the FDA approved Welchol the first new bile-acid binding product in a number of. To be used in combination with diet or with a statin, Welchol comes as tablets and capsules, so it is much easier to take than earlier bile-acid binders that had to be mixed in water. In July 2, Baycol received approval for both a new higher strength.8mg and a new indication for raising HDL. A higher-dose extended release form of Lescol Lescol XL was approved in October 2. The higher dose is indicated for initial therapy in addition to dietary restrictions. The FDA once again rejected the immediate possibility of OTC statins. In denying the request from manufacturers who want to produce lower strength non-prescription statins, members of an FDA advisory panel concluded that treating high cholesterol requires professional monitoring to be sure it is successful. 2 CHANGE IN PMPY COST 2 PMPY = $ Future Trends An NDA was filed in September 2 for the first of several combination products in development for lowering cholesterol. Formerly called Nicostatin, this drug combines lovastatin with extended-release niacin. A second still unnamed product will soon begin Phase III trials. This product combines simvastatin with ezetimibe, an investigational agent that blocks the body s absorption of cholesterol from food. At least two new statins are being studied. Crestor (rosuvastatin) purported to be a super statin more effective than others already on the market is in Phase III trials. An NDA may be filed for its approval by the end of this year. Itavastatin is earlier in U.S. development but it is expected to be approved in Japan this year. Phase II trials for a new type of antihyperlipidemic are under way in the United States. CardioRex, a unique plant-based sterol compound is being investigated for treatment of primary hypercholesterolemia. Patent protection for Mevacor is slated to expire in the summer of EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 85

61 RESPIRATORY Respiratory conditions affect breathing. They can be acute like occasional colds, recurring like seasonal allergies or chronic like asthma. Some respiratory conditions are relatively minor; others are literally life-threatening. Many of the medications used to treat them are targeted directly to affected tissues. Some are inhaled through the mouth, for example, to reach the lungs quicker. Nasal sprays and eye drops deliver specially formulated drugs directly to affected areas so relief is faster and systemic side effects are limited. According to U.N. initiatives, manufacturers have until the end of 25 to replace the propellant chemicals in multi-dose inhalers (MDIs). These chemicals, called chlorofluorocarbons, are thought to interact with the Earth s ozone. New inhalers either use different propellants or deliver medications in a dry powder form. Receiving new attention in drug development is chronic obstructive pulmonary disease (COPD). Unlike asthma, which generally affects a young population in million of the 14.5 million Americans with asthma were under the age of 45 COPD is primarily a condition of older people. Smokers and people who have worked in dusty, polluted environments are especially likely to have COPD. Until recently, treatment for COPD was limited to many of the same drugs used to treat asthma. Among several new types of drugs in development for COPD are: Ariflo (SB 27499): An oral phosphodiesterase 4 (PDE 4) inhibitor, Ariflo has the potential to improve lung function and reduce symptoms in patients with COPD. An NDA is expected in 21 or early 22. Spiriva (tiotropium): Currently in Phase III clinical trials for COPD, Spiriva is a long-acting anticholinergic drug that dilates bronchial passages. Submission of an NDA for FDA approval is planned for late 21. Viozan (AR-C68397AA): An agonist of both dopamine and beta-2 receptors, Viozan may also be filed for FDA approval in the treatment of COPD within the next year. It is administered as a powder through an inhalation device. In 2, the FDA approved a new anti-allergy eye drop Optivar (azelastine) that contains the same drug in the nasal spray, Astelin. Optivar is similar to three other anti-allergy eye drops that were introduced in ANTIASTHMATICS Asthma is a chronic inflammatory respiratory disease that is classified by four stages of severity. Specific treatment depends on the stage of the condition. In general, however, two types of drugs are used to treat asthma. To decrease inflammation and help prevent attacks, long-lasting controllers are taken on a regular basis. Corticosteroids and leukotriene inhibitors are two classes of asthma controllers. The second type of asthma drugs provides short-acting relief when attacks have started. Short-acting beta agonists and anticholinergic agents are asthma relievers often called rescue drugs. Results of a study released in November 2 show that inhaled corticosteroids (ICSs) provide safe and effective asthma treatment for children. Previously, concerns that corticosteroids inhibited skeletal growth limited their use in children. FIGURE A12 THERAPY CLASS DRUG MARKET SHARE TREND ANTIASTHMATICS In 2 PMPY cost of antiasthmatics grew by 12.7 percent to $15.4, despite less than a one percent rise in PMPY utilization. Albuterol (brand name Proventil or Ventolin ) is the most widely used inhaled beta agonist. Albuterol inhalers have been available generically since early The market share for the generic forms dropped slightly from 26 percent in 1999 to 24.7 percent in 2. The newest controller medications for asthma are the leukotriene modifiers Accolate (zafirlukast), Zyflo (zileuton) and Singulair (montelukast). The National Asthma Education and Prevention Program (NAEPP) guidelines list these products as an alternative to ICSs in mild persistent asthma. Taken as tablets, all the leukotriene modifiers are for long-term control of asthma so they must be taken continually. These products have low overall market share because they are usually either prescribed in combination with other products or used as a secondline therapy. The market share for Singulair continued to grow from 2.2 percent in 1998 to 1.5 percent in 2, while the market for Accolate rose slightly to 3.3 percent. The market share for the long-acting beta agonist Serevent (salmeterol) remained stable at 7.5 percent. Because Serevent has a slow (15 minute-3 minute) onset of action, it should not be used to treat acute asthma symptoms. It is used instead as a daily controller medication, often in combination with an anti-inflammatory agent. 86 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $15.4 Albuterol Inhaler ($25.95) Albutrol Sulfate ($36.79) Serevent/Diskus ($72.9) Azmacort ($6.31) Vanceril ($48.67)

62 In 2, Flovent increased its market share to 1.4 percent from 7.1 percent in In contrast, Pulmicort s market share increased from 1.1 percent to 1.6 percent. Vanceril and Beclovent, the two brand-name products of an orally inhaled corticosteroid went off patent in However, the FDA does not recognize the generic version of beclomethasone dipropionate as therapeutically equivalent to the branded products. Both have market shares of less than 2 percent. Pulmicort Respules TM (budesonide inhalation suspension) became the first inhaled corticosteroid approved for children as young as 1 year of age. For use in a nebulizer, Pulmicort Respules TM is given once or twice a day. Flovent Diskus (fluticasone) was approved for adults and for children as young as 4 old. Used once or twice a day to prevent asthma symptoms, the Diskus device delivers a dry powder formulation of Flovent. The first combination corticosteroid and long-acting beta agonist product in the United States was approved in August 2. Advair Diskus TM (fluticasone and salmeterol) is a dry-powder formulation indicated for twice a day use to prevent asthma attacks in people who are 12 of age or older. A new formulation of beclomethasone, QVAR (beclomethasone HFA) has also been given FDA approval. A new method allows QVAR to be delivered in much smaller droplets than previous inhalers were able to produce. As a result, the drug reaches more of the lungs making smaller doses effective. QVAR is a controller drug. Yet another powdered form of an asthma drug was approved in February 21. A beta agonist, Foradil Aerolizer TM (formoterol inhalation powder) is indicated primarily for maintenance therapy. It can also be taken for occasional prevention of exercise-induced bronchial spasms, but it is not meant to relieve attacks. Future Trends An NDA that was filed in late 1999 for Asmanex (mometasone inhalation powder) is still under consideration by the FDA. It was approved by Canada in late 2. ANTIHISTAMINES Although histamine is involved in many body functions, it is probably best known for its role in the allergic response. Among other effects, histamine activity results in itchy, watery eyes, sneezing and rhinitis the runny nose that often aggravates allergy sufferers. Antihistamines are drugs that block the actions of histamine and lessen symptoms associated with allergy. Older antihistamines such as Benadryl (diphenhydramine) are good at blocking histamine, but they also cause drowsiness in most people. Some older antihistamines are available without prescription, and some are even sold as OTC sleep aids. A major reason for the popularity of the newer antihistamines Claritin (loratadine), Allegra (fexofenadine) and Zyrtec (cetirizine) is their much lower rates of sedation. FIGURE A13 THERAPY CLASS DRUG MARKET SHARE TREND ANTIHISTAMINES The rise in PMPY expenditures for the antihistamine class slowed to 14.3 percent to $15.95 in 2. This rate of growth contrasts with the 38.5 percent PMPY rise between 1996 and 1997, a 25.2 percent increase in 1998 and a 25.8 percent escalation in Unlike 1999 when the cost increases were largely due to substantial increases in utilization, the 2 growth was about equally attributable to rises in utilization and per prescription costs. Most of the increase in cost took place among the non-sedating antihistamines Claritin and Allegra and the lowsedating product Zyrtec, which account for almost 9 percent of the market. All of these products have been promoted heavily through DTC advertising. The market share for Claritin, the market leader, continued a decline seen in 1999, dropping to a 42.5 percent share in 2. The AWP per prescription for Claritin was $71.93, an 8.3 percent rise over 1999 levels. With an average cost of $57.13 per prescription, 1.5 percent over 1999 costs, Allegra s market share rose to 23 percent in 2. Zyrtec, reached a 23.8 percent market share in 2. It had a 2 AWP cost of $54.94, a 4.8 percent over 1999 costs. 88 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $15.95 Claritin ($71.93) Zyrtec ($54.94) Allegra ($57.13) Generic ($4.74) Hismanal ($69.92)

63 Claritin syrup was granted approval for treating children as young as 2 of age for symptoms of both seasonal allergic rhinitis and chronic idiopathic urticaria (hives with no apparent cause). In 2 a new half-strength Allegra tablet also received new indications for treating children. The 3mg tablets are indicated for seasonal allergic rhinitis or chronic idiopathic urticaria that affects children 6-12 old. An intranasal antihistamine, Astelin (azelastine), which was already approved for rhinitis caused by seasonal allergies, now has an additional indication for non-allergic or vasomotor rhinitis. Future Trends Tentative approval for loratadine tablets and syrup, the generic version of Claritin was given in January 21. Even though the extended Claritin patent will not expire until December 22, Claritin s manufacturer has filed patent-infringement lawsuits to further delay the introduction of a generic. In the meantime, the FDA issued an Approvable letter for Clarinex (desloratadine), a metabolite of Claritin intended to take its place in the brand name marketplace. Final approval is on hold, however, due to deficiencies in production practices at some of the facilities that will make Clarinex and other drugs. No estimate is available for the release of Clarinex. An NDA was submitted in the first quarter of 21 for norastemizole, a refined form of Hismanal (astemizole). After FDA warnings about interactions and side effects, Hismanal was discontinued by the manufacturer in Last June, an NDA was submitted for Xolair (olizumab), a humanized monoclonal antibody that interferes with the action of immunoglobulin E (IgE). IgE is a substance produced in the body to help mediate the response to asthma triggers. Although trials were initially delayed by concerns over possible side effects, Xolair is now being considered for use in people who have both asthma and seasonal allergies. It will have to be injected in a physician s office probably once or twice a month. (DECONGESTANT) NASAL STEROIDS Allergy is an inflammatory disease of the upper airways. Nasal steroids are potent anti-inflammatory agents. Because they are applied directly to swollen nasal tissue, they work quickly and they are not absorbed to same the degree that oral steroids are, so side effects are minimal. Many have been formulated with non-irritating bases so they do not sting when sprayed onto inflamed tissue. As a class, nasal steroids are generally less expensive to use than the newer non-sedating antihistamines. FIGURE A14 THERAPY CLASS DRUG MARKET SHARE TREND (DECONGESTANT) NASAL STEROIDS PMPY costs for nasal steroids rose by 7.4 percent to $6.85 in 2. This rise is solely attributable to increased per prescription costs, as utilization actually declined by 1.4 percent in 2. Nasal steroids include only branded products. The most commonly used products are Flonase (fluticasone), which increased its 2 market share to 35.4 percent, and Nasonex (mometasone), which captured a 2.1 percent market share in 2. In contrast, market shares for other products either grew marginally or declined. A new steroid nasal spray, Tri-Nasal (triamcinolone), was approved in May 2 for treatment of allergic rhinitis in patients as young as 12 old. It will be dosed once a day. COUGH AND COLD A multitude of drugs aim to relieve symptoms of the common cold and other upper respiratory conditions. Antihistamine-decongestant combinations make up the majority of cough and cold products that require a prescription. Decongestants such as pseudoephedrine and phenylephrine constrict blood vessels to reduce swelling in nasal tissue, a symptom that often accompanies allergies or colds. Oral decongestants may also act as a stimulant, so they help to counteract any sedation that the antihistamine may cause. Since they are absorbed into the blood, however, oral decongestants can affect blood vessels throughout the body potentially worsening conditions like hypertension. 9 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $6.85 Flonase ($54.94) Nasonex ($53.8) Rhinocort/Aqua ($45.47) Nasacort AQ ($44.49) Vancenase AQ ($56.82) Beconase AQ ($46.59)

64 In November 2, the FDA advised manufacturers to discontinue prescription and OTC products that contained phenylpropanolamine. Widely used as a decongestant, phenylpropanolamine was also the main ingredient in many non-prescription weight loss products. The FDA s action followed published reports of hemorrhagic strokes mainly in women associated with the use of phenylpropanolamine. FIGURE A15 THERAPY CLASS DRUG MARKET SHARE TREND COUGH/COLD Generic ($12.22) Claritin-D 12 Hour ($69.96) Allegra-D ($54.58) Entex LA ($4.52) PMPY costs for cough and cold products grew by a modest 5.6 percent to $9.54 in 2, despite an almost 1 percent decline in PMPY utilization. Despite a 5 percentage point drop in market share, over half of this class consists of generic products. Claritin -D (loratadine and pseudoephedrine), a branded combination product that includes a non-sedating antihistamine, made up 18.2 percent of the 2 market. The only other branded combination product of any importance in this class, Allegra -D (fexofenadine and pseudoephedrine), saw its market share continue to increase to 8.5 percent in 2. Whereas the average AWP cost per prescription is $12.22 for generic products (an increase of 16.9 percent over 1999 levels), it is $69.96 for Claritin -D and $54.58 for Allegra -D. AWP prescription costs grew by 1 percent for both of these branded products. Future Trends The manufacturer of Claritin (loratadine) has filed lawsuits against at least two generic companies that have submitted applications to the FDA for approval of a generic. A generic version of Claritin -D cannot be released until the lawsuits are settled. Zyrtec -D (cetirizine and pseudoephedrine) received an Approvable letter from the FDA in late 2. 2 CHANGE IN PMPY COST PMPY = $9.54 ANTI-INFECTIVES Infections occur when micro-organisms invade living tissue, then multiply and cause damage. A number of different organisms can be infective bacteria, viruses and fungi are among the most common. More uncommon in the United States, but important in other parts of the world, are infectious diseases caused by micro-organisms such as protozoa (malaria, sleeping sickness), other parasites (giardiasis) and prions (bovine spongiform encephalopathy or Mad Cow Disease). Some experts in the control of infectious diseases suggest that increased intercontinental travel, faster shipping of containerized freight and global warming may spread some relatively rare infections into areas where little or no immunity exists among the local population. Once thought to be on the threshold of containment, if not elimination, infectious diseases represent the second leading cause of death in the world. According to the World Health Organization, over 11.5 million lives were lost in 1999 to the five most deadly types of infection acute lower respiratory infections, AIDS, tuberculosis, malaria and infectious diarrhea. Previously unknown infectious agents are emerging (Ebola), others that were relatively mild have become more deadly (West Nile Virus) and ones thought to be under control are re-appearing (tuberculosis, foot and mouth disease). A growing concern in some countries is the threat of bioterrorism using infective agents. Bacteria are one large group of infection-causing micro-organisms. Commonly used antibacterial drugs often called antibiotics include cephalosporins, macrolides, penicillins, quinolones and tetracycline. Several other classes are used only for certain types of infections because of their specific effectiveness or in hospitals due to significant side-effect potential. Antibiotic resistance is an increasingly critical global issue. Bacteria develop immunity when antibiotics are used improperly. Many types of bacteria contain a small number of cells with genes that are resistant to certain antibiotics. When exposed to the antibiotic, all the non-resistant bacteria are killed or inhibited. Resistant bacterial cells survive to multiply, passing down their resistance to new generations of bacteria. Prescribing antibiotics for non-bacterial infections is often cited as a reason for the increase in bacterial resistance that has been seen in recent. Patients contribute to the spread of resistance by requesting antibiotics for a cold or the flu which are not caused by bacteria and by failing to take antibiotics as prescribed. Ironically, the attempt to avoid bacterial contamination by using antibacterial cleaners and soaps is also adding to the problem. Moreover, extensive use of antibiotics for crops and livestock increases bacterial resistance. Government agencies in several countries including the United States have taken measures to ban or limit antibiotic use in agriculture. Regulating human use of antibiotics and monitoring bacterial resistance patterns are among other ways that countries around the world are trying to cope with the problem. 92 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 93

65 Partially in response to antibiotic resistance, drug manufacturers are trying to discover new antibiotics or improve older ones. The last few have seen at least two completely new classes of antibacterial drugs oxazolidinones and streptogramins approved by the FDA. The first oxazolidinone to be approved in the United States, Zyvox (linezolid), is effective against some bacteria that resist current therapies. Zyvox will be used mainly in hospitals, but its use may shorten hospital stays and also lessen the need for outpatient intravenous antibiotics. Additionally, in 2: Malarone (atovaquone and proguanil), a new preventative and treatment for malaria, was introduced. A new vaccine that came to market is Prevnar (pneumococcal 7-valent conjugate vaccine) for the prevention of pneumonia in high-risk infants. The following antibiotics are among those in clinical trials: Still under FDA review is an NDA that was filed in March 2 for Ketek (telithromycin). Ketek is the first agent in a new class of antibiotics called ketolides, which are derived from macrolides. Ketek has been studied for several respiratory infections, but in April 21 an FDA committee recommended its approval only for serious community-acquired pneumonia in adults. Results from a Phase III study for Neuprex (opebecan), rbpi-21 in the treatment of children with severe meningococcemia were not conclusive enough for the FDA to accept an application for full approval. A member of a new antibiotic class called bactericidal/permeability increasing proteins, Neuprex does have orphan status for meningococcemia. Trials for its use in other serious infections continue. Rifaximin is a broad-spectrum antibiotic derived from rifamycin and designed to be active in the GI tract. It is an orphan drug for the treatment of hepatic encephalopathy, and it is also in clinical trials for treating lower GI infections. A member of a new antibiotic class, Cidecin TM (daptomycin) for injection appears to have effectiveness against several resistant bacteria. It is in clinical trials for skin and soft tissue infections, community-acquired pneumonia, complicated urinary tract infections and bacteremia. Also in various stages of clinical trials for several different anti-infective indications is ramoplanin, which has shown activity against resistant micro-organisms. Both oral and topical forms are being developed as potential ways to prevent the spread of infections in hospitals. Vaccines for some bacterial infections are also in development. Among them: Campyvax is an oral vaccine being developed to prevent GI infections caused by Campylobacter bacteria. StreptAvax is being tested against several types of Streptococcus group A that cause throat and skin infections. NeisVac-C will protect against group C meningococcal infection. Already approved in Britain, this vaccine can be used for children as young as 1 year old. Fungi are tiny plants that can infect humans and animals. Many infections caused by fungi are superficial they do not invade tissue but remain primarily on the surface of the skin or mucous membranes. Usually slow growing, minimally invasive fungal infections often affect areas like toenail beds that have a poor blood supply. Both topical and systemic drugs may be needed to eliminate them and therapy may take several months or longer. When fungal infections are systemic most often in people whose immune systems are damaged by other conditions or drug therapies they can be life-threatening. In January 21, the FDA approved Cancidas (caspofungin acetate), the first in a new class of antifungal drugs called echinocandins or glucan synthesis inhibitors. Cancidas will be used mostly in hospitals for the treatment of a particularly serious fungal infection, aspergillosis, in patients who have not been helped by other antifungal therapies. An NDA may be submitted this year for Vfend (voriconazole), another agent in late stages of clinical trials for serious systemic fungal infections. 94 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 95

66 CEPHALOSPORINS Cephalosporins are a group of bactericidal antibiotics that are very similar to penicillins in structure. Usually described as belonging to one of four generations according to which specific bacteria they eliminate, the cephalosporins are broad-spectrum antibiotics meaning they have good general activity against many bacterial types. FIGURE A16 THERAPY CLASS DRUG MARKET SHARE TREND CEPHALOSPORINS Cephalexin ($28.64) Cefzil ($68.35) Ceftin ($92.31) Cefaclor ($6.55) Suprax ($62.59) Ceclor/CD ($72.8) PMPY expenditures for cephalosporins declined by a substantial 9.4 percent to $6.94 in 2. This decline was primarily due to the 11.3 decrease in utilization of these products. The market share for generic cephalexin rose from 45.8 percent in 1999 to 49.6 percent in 2. The market share for virtually all other products in this class either declined or remained virtually flat. The use of another generic, cefaclor, (often used to treat otitis media) continued to decline from a peak of 14.5 percent in 1996 to 5.3 percent in 2 owing to the availability of more effective second-line antibiotics. The preference for two second generation branded cephalosporins, Cefzil (cefprozil) and Ceftin (cefuroxime), declined in 2. The market share for Cefzil dropped to 14.8 percent, while the share for Ceftin decreased to 13.2 percent. Third-generation cephalosporins, Suprax (cefixime), Vantin (cefpodoxime) and Cedax (ceftibuten), have relatively low use, which seems to be declining. Omnicef (cefdinir), a third-generation cephalosporin introduced to the U.S. market in October 1998, offered nothing new to the already crowded class but still managed continued growth in market share from.3 percent in 1998 to 2.2 percent in 2. 2 CHANGE IN PMPY COST PMPY = $6.94 According to the FDA Orange Book, patent protection for Suprax and Vantin has expired. No generic versions have been introduced, however. Generics are now available for Duricef (cefadroxil) and for two cephalosporins that are mainly used in hospitals Fortaz /Tazicef (ceftazidime) and Mefoxin (cefoxitin). Future Trends An NDA that was submitted in late 1999 for Spectracef (cefditoren pivoxil) is still pending. Spectracef would be a new oral cephalosporin for the treatment of respiratory infections in adults. MACROLIDES Macrolides are generally bacteriostatic; they inhibit bacterial replication rather than killing bacteria outright. Although macrolides are chemically different from penicillins, both of these antibiotic classes are effective against many of the same bacteria. FIGURE A17 THERAPY CLASS DRUG MARKET SHARE TREND MACROLIDES After rising by 19 percent in 1999, the overall rate of growth in PMPY cost for macrolides declined by 2.1 percent to $8.1 in 2. This reduction is solely a function of the 7.4 percent decline in utilization of these products. Zithromax (azithromycin), Biaxin (clarithromycin) and generic macrolides account for about 91.9 percent of all drug use in this category. Zithromax dominates this therapy class, growing its market share to 61.6 percent in 2. This increased market share came at the expense of both generic erythromycins, which continued to decline from a 26.7 percent market share in 1996 to 13.8 percent in 2, and Biaxin whose market share declined from a peak 34.6 percent in 1996 to 16.5 percent in 2. While losing substantial market share, the average cost of a generic prescription in this class rose 22.1 percent; in contrast, the average cost per prescription for Zithromax and Biaxin rose 3.7 percent and 1.5 percent, respectively. 96 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $8.1 Zithromax ($39.57) Biaxin/XL ($73.35) Generic ($21.21) E-Mycin ($16.27) PCE ($54.51)

67 PENICILLINS The most widely used antibiotics in the world, penicillins kill bacteria by destroying their cell walls. Only a few penicillins do not have generic equivalents. FIGURE A18 THERAPY CLASS DRUG MARKET SHARE TREND PENICILLINS PMPY costs of penicillins rose 8.9 percent in 2, despite a 5.1 percent decline in utilization. Generics continue to dominate this class despite seeing a market share decline to 69.2 percent in 2. Augmentin (amoxicillin and sodium clavulanate) and Amoxil (amoxicillin) are the only branded products in this class with significant use, with market shares of 23.3 and 7.4 percent, respectively. The average prescription price for Augmentin grew by 11.2 percent to $8.89 in 2 compared with the 2.4 percent rise to a $8.2 average price for generic products and the decrease of 9.8 percent to $14.82 for Amoxil. Generic approval has been given for 5mg and 85mg strengths of amoxicillin Generic ($8.2) Augmentin ($8.89) Although Augmentin now has generic equivalents in many parts of Europe, its American patent, due to expire in 22, has been extended to CHANGE IN PMPY COST PMPY = $7.39 Future Trends In December 2, the FDA issued a Non-Approvable letter to the maker of Factive (gemifloxacin). Originally submitted for use in respiratory and urinary infections, Factive may go into additional trials if the FDA requests further clinical information. Injectable Floxin (ofloxacin) patents expire in September 21, but the oral form is still protected until 23. Cipro is also under patent until 23. ANTIVIRALS Viruses are much smaller than bacteria or fungi. Relatively simple micro-organisms that cannot reproduce alone, they must take over the reproductive systems in living host cells to multiply. Drugs that kill viral cells may also destroy or damage host cells. Making them even more difficult to treat, viruses can mutate rapidly causing drugs to lose their effectiveness. Treatment for viral infections is often challenging. AIDS patients, for example, may have to remember complicated dosing schedules for multiple doses of several different drugs. The AIDS crisis has sparked intensive research which, in turn, has lead to new treatments for several viral illnesses. Although no cure or prevention has yet been discovered for human immunodeficiency virus (HIV), the micro-organism that causes AIDS, scientists are finding better ways to treat it as well as other viral illnesses such as hepatitis and flu. Multiple-drug therapy helps manage resistance. In addition, manufacturers are developing combination products and controlled release dosage forms not only to help control viral resistance, but also to encourage patient compliance a critical factor in controlling the progression of viral conditions. FIGURE A19 THERAPY CLASS DRUG MARKET SHARE TREND ANTIVIRALS CHANGE IN PMPY COST 98 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT PMPY = $1.2 Valtrex ($XXX.XX) Famvir ($XX.XX) Tamiflu ($XXX.XX) Zerit ($32.55) Epivir ($267.13) Crixivan ($426.9)

68 After growing at a faster rate, 39.9 percent, than any other class of drug in 1999, PMPY costs for antivirals declined by 2.6 percent to $1.2 in 2. Both the utilization and per prescription costs of those products changed very little from 1999 levels. After growing dramatically between 1997 and 1998, the market share for generics continued to decline to 28.4 percent in 2. Drugs for viral illnesses other than HIV/AIDS now dominate the antivirals class, which in previous consisted almost entirely of drugs to treat HIV. Partly due to the rapidly increasing number of drugs being approved for HIV and the multiple drug regimens needed to treat HIV as well as to newly available drug therapies for previously untreatable viruses such as flu; no one HIV drug now emerges to lead the class. Valtrex (valacyclovir) and Famvir (famciclovir), used to treat herpes, are the most widely used branded products in this category with a growing combined 36.3 percent market share in 2. Tamiflu (oseltamivir) captured 4.9 percent of the market in 2. The market shares for Epivir (lamivudine) and Zerit (stavudine) continued to drop to 2.7 percent and 3 percent, respectively, in 2. Among the protease inhibitors, Crixivan (indinavir) continued to experience a slight market share decline to 1.4 percent, while the market share for Norvir (ritonavir) remained under 1 percent. In an almost complete reversal of previous recommendations that called for early, aggressive treatment of HIV, guideline updates released in February 21 advocate delaying the start of therapy for asymptomatic HIV infection in adults and adolescents until immune function begins to decline. Concerns over long-term side effects of treatment led the Panel on Clinical Practices for the Treatment of HIV Infection to the suggested therapy changes. In September 2, the FDA gave accelerated approval to Kaletra (lopinavir and ritonavir), a combination of two protease inhibitors. Currently, it is the only drug of its kind that can be used for adults and children as young as six months old for the treatment of HIV infection. Even though it simplifies the complex dosing required for many AIDS patients, Kaletra must still be taken with other antiviral drugs. A second combination product consisting of three nucleoside reverse transcriptase inhibitors was approved late last year. Trizivir (abacavir, lamivudine and zidovudine) is intended to be taken twice a day by adults and adolescents with HIV. The FDA has also approved a new enteric-coated, delayed-release formulation of Videx (didanosine). Called Videx EC, the new dosage form disintegrates in the small intestine. It is taken once a day. In January 21, Tamiflu, which now has an oral suspension dosage form for children as young as 12 months, received additional FDA approval for flu prevention. Approval for an orphan indication was given to Veldona (interferon-alpha), an oral lozenge for treating AIDS patients who have oral warts caused by papillomavirus. Peg-Intron (peginterferon alfa-2b) was approved in early 21 for the treatment of some patients with chronic hepatitis C. A second pegylated interferon, Pegasys (pegylated interferon alfa 2a), is pending FDA approval also for chronic hepatitis C in certain patients. Pegylation is a way of attaching active drug molecules to inactive molecules of polyethylene glycol (PEG). The combined result stays in the blood longer meaning that pegylated interferons need to be injected only once a week instead of the three or more times a week that unpegylated interferons must be used. In December, an NDA for the separate marketing of Rebetol (ribavirin) was submitted. Rebetol capsules have been available in the United States since 1998, but only packaged as Rebetron a kit that includes Intron-A (interferon alfa-2b), an injected drug. Rebetol will be indicated for treating hepatitis C. Future Trends Although Picovir (pleconaril) an investigational agent that held initial promise in treating common cold viruses has been disappointing in clinical trials, an NDA will likely be filed for its use against colds. Phase III clinical trials for Picovir in the treatment of viral meningitis and viral respiratory infection are in late stages. Results from Phase II trials of T-2, the most advanced agent in the new fusion inhibitor class, were presented in early 21. Fusion inhibitors prevent viruses from attaching to host cells thus blocking viral entry. In both adult and pediatric AIDS patients, T-2 showed good results as monotherapy or in combination with other antiviral agents. T-2 has been given Fast Track status by the FDA. A second fusion inhibitor, T-1249, is also showing good results in earlier phases of investigation. Ampligen represents another new class of antivirals called nucleic acid compounds. They are designed to activate the immune system against viruses. Ampligen has entered Phase III trials for treating chronic fatigue syndrome and Phase II trials for AIDS, hepatitis B and hepatitis C. Development of Preveon (adefovir dipivoxil) for treating AIDS was discontinued after an FDA advisory panel recommended against its approval. A lower dose is in Phase III trials for hepatitis B, however. In November, the FDA gave Fast Track designation to development of tipranavir, a protease inhibitor in Phase III trials for treating AIDS. Slightly different in structure from other protease inhibitors, tipranavir may be used for patients whose infections have become resistant to other drug therapy. 1 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 11

69 Coviracil (emtricitabine) is a once-daily nucleoside analog under investigation for HIV, AIDS and hepatitis B treatment. Some Phase III trials have been completed for its effectiveness in combination with other antiviral agents. Further studies have begun for Coactinon (emivirine) in the treatment of HIV. In 1999, the FDA denied an NDA submitted for its approval on the grounds that more clinical information was needed. Coactinon is a non-nucleoside reverse transcriptase inhibitor. Valcyte (valganciclovir) had been approved for treating cytomegalovirus (CMV) retinitis in AIDS patients. An adaptation of the drug ganciclovir, Valcyte was developed as an oral dosage form. In January 21, the FDA issued a Non-Approvable letter in response to an NDA submitted for Ceplene (histamine dihydrochloride) in treating metastatic melanoma. The manufacturer will do additional research for that indication while trials for other indications, including hepatitis C, are also continuing. A number of viral vaccines are in late stages of development including: The BLA for Flumist, a nasal vaccine for influenza prevention, is currently under review by the FDA. Approval is possible later this year in time for the flu season. Twinrix (inactivated hepatitis A and recombinant hepatitis B vaccine). A biological license application (BLA) has been approved for this combination vaccine that reduces the number of injections needed to prevent two strains of hepatitis in individuals at high risk of exposure. Arilvax (live-attenuated yellow fever vaccine). Already available in Europe and Asia, Arilvax has finished U.S. trials and an NDA for its approval may be filed as early as mid-21. Vaccination against yellow fever is recommended for U.S. military personnel and civilian travelers who may be visiting areas where yellow fever is still common. WOMEN S HEALTH Although women experience the same general health problems that men do, they also have special health needs that center on reproduction. Many younger women control fertility through the use of contraceptive or fertility enhancing drugs. After menopause, women may use supplemental hormones or miscellaneous endocrine drugs to relieve menopausal symptoms and preserve bone mass. In September women using Norplant (levonorgestrel implants) were advised to use additional non-hormonal forms of contraception. Systems inserted since October 2, 1999, may not release enough levonorgestrel to be effective. A contraceptive injection, Lunelle (estradiol and medroxyprogesterone), was approved by the FDA in 2. Administered only once a month, Lunelle was designed to be more convenient than oral contraceptives and more flexible than other injections or implants. For women who want long-term contraception, the FDA has approved Mirena (levonorgestrelreleasing intrauterine system). Once inserted, Mirena can prevent pregnancy for up to five. An NDA has been filed for FDA review of Xyvion (tibolone) in the treatment of osteoporosis. A tissue specific steroid, Xyvion exhibits estrogen-like protective effects on bone and other tissues without producing adverse effects on breast or endometrial tissues. Xyvion is licensed under a number of brand names in countries where it is already approved. Priority review status has been given to the NDA for Aslera (prasterone or dehydroepiandrosterone [DHEA]) that was submitted in October 2. An indication is being sought for the oral treatment for women with mild to moderate systemic lupus erythematosus (SLE). In general, SLE patients have abnormally low levels of prasterone, a naturally occurring intermediary in the conversion of cholesterol to sex steroids. Already designated as an orphan drug, Aslera has been shown in clinical trials not only to improve SLE symptoms, but also to reduce the need for corticosteroid drugs. An NDA was submitted in January 21 for the first contraceptive patch, Ortho Evra (ethinyl estradiol and norelgestromin transdermal system). If approved, one Ortho Evra patch would be worn continuously for seven days. For one week each month, women who use Ortho Evra would not wear a patch. ORAL CONTRACEPTIVES Introduced in the 196s, oral contraceptives (OCs) became the first class of drugs developed not to treat an illness but to improve the quality of life. Still perceived by some as lifestyle drugs, OCs are generally accepted throughout the world as one of the most significant social and medical developments of the 2 th century. 12 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 13

70 As formulations and combinations have changed, many of the adverse effects associated with the use of early OCs have been reduced or eliminated. Some women may experience side effects like nausea, headache, breast tenderness, weight gain, irregular bleeding and depression, especially when beginning to take OCs. Women who smoke or who have certain medical conditions such as breast cancer should use them only with caution. OCs cannot prevent sexually transmitted diseases. On the plus side, OC use is associated with lower incidences of ectopic pregnancy, pelvic inflammatory disease, iron-deficiency anemia and cancers of the endometrium and ovaries. They are also commonly used to regulate the menstrual cycle. FIGURE A2 THERAPY CLASS DRUG MARKET SHARE TREND ORAL CONTRACEPTIVES Ortho Tri-Cyclen ($33.31) Generic ($28.69) Ortho-Novum ($33.31) Triphasil-28 ($32.4) Lo/Ovral-28 ($34.53) Desogen ($28.5) Ortho-Cept ($33.67) Because of the 3.5 percent decline in utilization, the overall PMPY costs for oral contraceptives grew by only 1.7 percent in 2. Even though many are available generically, overall use of the estrogen-progestin combinations is declining. The Ortho-Novum product line, for example, continued its market share decline, dropping from 17.3 percent in 1997 to 9.8 percent in 2. Market share for generic versions of the most popular branded combinations increased substantially from 8.1 percent in 1999 to 13.6 percent in 2. Sustained growth has been seen with some newer products and formulations. Most notably, Ortho Tri-Cyclen (ethinyl estradiol and norgestimate) increased its market share from 12.2 percent in 1998 to 16.8 percent in 1999 to 21 percent in 2. Long awaited approval was granted for Mifeprex (mifepristone) in September 2. Formerly known as RU-486, the controversial tablet is indicated in combination with misoprostol for the termination of pregnancy up to seven weeks. It will be distributed only to clinics or physicians offices where it will be administered. 2 CHANGE IN PMPY COST PMPY = $9.34 Cyclessa (ethinyl estradiol and desogestrel) contraceptive tablets received FDA approval in December 2. Cyclessa provides only 25mcg of ethinyl estradiol per tablet which is at least 1mcg per tablet less than other triphasic oral contraceptives marketed in the United States. The FDA has approved generic equivalents for the oral contraceptives Loestrin and Loestrin FE. To be marketed as Microgestin and Microgestin FE, the new products contain ethinyl estradiol and norethindrone. Microgestin FE also contains ferrous fumarate. Generic versions of Ortho-Novum 1/35 (ethinyl estradiol and norethindrone) and Modicon 28 (ethinyl estradiol and norethindrone) were approved in March 21. Both new generics will be introduced during fourth quarter 21 under the name Nortrel. Tentative approval has also been granted for a Nortrel generic of Ortho-Novum 7/7/7 (ethinyl estradiol and norethindrone). Final FDA approval for the generic, also to be launched with the Nortrel name, will depend on the outcome of a patent challenge by the generic manufacturer. In January 21, the manufacturer of Alesse (ethinyl estradiol and levonorgestrel) submitted an NDA for an additional indication in the treatment of acne. Approved in 1997 for oral contraception, Alesse is a biphasic tablet containing low amounts of both estrogen (2 mcg of ethinyl estradiol) and progestin (1mcg of levonorgestrel). Future Trends Tri-Norinyl (ethinyl estradiol and norethindrone) is scheduled to lose patent protection in August 21. The manufacturers of the emergency contraceptive tablet, Plan B (levonorgestrel) have requested a change to OTC status from the FDA. Studies of the product s directions as well as its use will have to be conducted before approval is considered. Washington State already allows pharmacies to sell emergency contraception without a prescription and similar legislation is pending in Virginia. ESTROGENS At menopause, the amounts of female hormones that are produced naturally drop. Aggravating but relatively short-term effects of hormone loss, such as hot flashes and mood swings, are greatly overshadowed by the increased risk of heart disease, stroke and osteoporosis faced by older women. Artificial replacement of the hormones estrogens and progestins alleviates menopause symptoms. More importantly, when taken for longer periods of time, hormone replacement therapy (HRT) can delay the progression of osteoporosis and lower cholesterol levels. It may help to protect against heart disease and may even help to preserve memory. 14 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 15

71 In the past few, preliminary results from large ongoing studies of women receiving HRT seemed to dispute its positive cardiovascular effects. The Heart and Estrogen/Progestin Replacement Study (HERS) found that short-term use of HRT neither reduced the risk of death from coronary heart disease nor prevented further heart attacks in postmenopausal women with a history of heart disease. The Estrogen Replacement and Atherosclerosis (ERA) Trial found that HRT did not prevent progression of atherosclerosis in women with established coronary artery disease. In the Women s Health Initiative (WHI), a slightly increased risk of stroke was observed during the first year of HRT. ERA and WHI are continuing to examine the long-term effectiveness of HRT in women who have not developed heart disease. Until evidence that is more conclusive is presented, the National Heart, Lung and Blood Institute states that the benefits of HRT outweigh its risks and that women should consult with their doctors to individualize the management of menopause. FIGURE A21 THERAPY CLASS DRUG MARKET SHARE TREND ESTROGENS Premarin ($23.8) Prempro ($31.) Generic ($15.38) Estrace ($21.9) Ogen ($33.6) PMPY costs for estrogens grew by 12.4 percent in 2. This growth rate is attributable solely to the increase in the average cost per prescription, as utilization declined by 2.6 percent. Premarin (conjugated estrogens) and Prempro (conjugated estrogens and medroxyprogesterone fixed-dose tablets) dominate this class with a combined 64.9 percent market share. However, Premarin continued its dramatic decline in market share, dropping from 71.8 percent in 1994 to 42.3 percent in 2. The market share for Prempro remained basically flat at 22.6 percent in 2. The average per prescription costs of these two products rose 14.7 percent and 18.3 percent, respectively in 2. Branded products that contain several types of estrogen have dominated the market, mainly because bioequivalence cannot be documented for some generics. Generics currently have a growing but relatively small 1.5 percent market share. 2 CHANGE IN PMPY COST PMPY = $1.79 Estraderm ($29.63) Activella (estradiol and norethindrone) tablets were approved in April 2 for the prevention of osteoporosis and other symptoms associated with menopause. Under the brand name Activelle, the product had already been approved for HRT. In addition to previous indications for hormone replacement, Vivelle (estradiol transdermal system) has been approved for the prevention of postmenopausal osteoporosis. At the same time, the FDA approved a lower strength.25mg per day Vivelle patch. Future Trends A tablet form combining the estrogens in Premarin and a progestin called trimegestone is in late stage development for relief of menopausal symptoms. Another combination, estradiol and trimegestone, is also being investigated for treating side effects of menopause and for osteoporosis. HRT products containing lower doses of estrogen and progestin are in late stage clinical trials. Low-dose estrogen can prevent postmenopausal bone loss with fewer side effects than higher-dose products. MISCELLANEOUS ENDOCRINES Hormones produced by the endocrine glands regulate metabolism, reproduction and other body functions. Thyroid diseases, growth hormone deficiencies, infertility and osteoporosis are all among the many disorders that can be caused by imbalances of endocrine hormones. Recently, a number of new treatments have become available for endocrine conditions. Among the most widely used are bisphosphonates and selective estrogen receptor modulators (SERMs) to prevent or treat osteoporosis. FIGURE A22 THERAPY CLASS DRUG MARKET SHARE TREND MISCELLANEOUS ENDOCRINES 16 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST 2 PMPY = $ Fosamax ($69.49) Evista ($71.6) Miacalcin ($66.98) DDAVP ($164.14)

72 2 PMPY expenditures for miscellaneous endocrines rose by a substantial 29.8 percent, after growing 31.4 percent in This increase is due totally to increased utilization because average per prescription costs actually declined by.5 percent. Fosamax (alendronate) and Evista (raloxifene) dominate this class with a combined almost three-quarter market share. Evista s market share grew dramatically from 15 percent in 1998 to 3.1 percent in 2, while the market share for Fosamax declined from 47.9 percent in 1998 to 42.3 percent in 2. In April 2, a new lower strength of Actonel (risedronate) received FDA approval for preventing and treating osteoporosis either after menopause or from corticosteroid use. Previously indicated for treating Paget s disease, Actonel is an oral bisphosphonate. More convenient formulations of Fosamax have been approved for osteoporosis after menopause. A 7mg tablet is indicated for treatment while a 35mg tablet has an indication for prevention. Both new strengths need to be taken only once a week. Fosamax received approval in September 2 for the treatment of men who have osteoporosis. Future Trends In Phase III of clinical trials is another bisphosphonate, Bonviva (ibandronate). With NDA filing expected in 21, Bonviva will likely have both oral and injectable forms. An application for Fortéo (recombinant parathyroid hormone) has been submitted to the FDA for consideration in the treatment of advanced osteoporosis in postmenopausal women. Unlike current treatments that slow the loss of bone mass, Fortéo seems to promote growth of new bone tissue. It will be available as an oral tablet and possibly as an inhaled form, too. DERMATOLOGICALS Infections, burns and symptoms of systemic conditions are only a few of the conditions that can affect the skin. Most of the drugs used to treat skin problems are applied locally to the skin surface. Not only does the drug reach the affected area quickly, but side effects are also limited since little or none of the drug is absorbed. In some cases, though, oral or injected drugs are used, either instead of or in addition to topicals. Fungal infections of the toenails, for example, may need to be treated for several months with both topical and oral antifungal drugs. FIGURE A23 THERAPY CLASS DRUG MARKET SHARE TREND DERMATOLOGICALS The PMPY cost of dermatologicals grew by 13.3 percent to $13.36 in 2. The entire increase was due to higher costs per prescription since utilization actually declined by 1.5 percent in 2. The use of generic products in this class seems to have reached a 3 percent plateau in both 1999 and 2. However, the average cost for generic products grew by a substantial 24.6 percent to $22.12 in 2. In 21, the FDA required the manufacturer of Accutane (isotretinoin) to add a new warning of possible CNS side effects to the label. Already carrying a warning against use in pregnancy, Accutane recently has been linked to depression and even suicide in some patients who were taking it for severe resistant acne. Patients prescribed Accutane will now sign a form to verify they have been advised of its potential adverse effects. The patent for Accutane expires in August EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT CHANGE IN PMPY COST PMPY = $13.36 Generic ($22.12) Lotrisone ($42.79) Bactroban ($38.28) Elocon ($33.64) Nizoral ($26.59)

73 The FDA granted approval as a non-prescription product to Abreva (docosanol cream), a new type of antiviral that keeps viral cells from entering host cells. Marketed for treatment of cold sores and fever blisters caused by oral/facial herpes, Abreva has no effect on viral replication so its use should not contribute to viral resistance. Olux (clobetasol foam), a mousse form of a topical high-potency steroid, was approved for marketing by the FDA in May 2. Generic clobetasol cream and ointment are available. A somewhat unusual cream called Vaniqa (eflornithine) was approved in the summer of 2. Indicated to inhibit facial hair growth for women, Vaniqa is undergoing further trials to determine its usefulness for psuedofolliculitis barbae a condition in which men develop inflamed bumps after shaving. A non-steroidal ointment, Protropic (tacrolimus) has been FDA approved for treating eczema. Classified as an immunomodulator, Protropic is the topical form of a drug that is used intravenously or orally to prevent transplant rejection. Two new treatments for actinic keratoses rough scaly spots that develop on sun-damaged skin were approved in 2. Both Solaraze (diclofenac gel) and a new cream formulation of 5-fluorouracil that has yet not been given a brand name, received FDA approval. About 15 percent of actinic keratoses advance into skin cancers if they are not removed or treated. A diclofenac lotion, Pennsaid, has been approved in Europe for treating actinic keratoses and for relieving osteoarthritis pain but it has yet to be considered by the FDA. The generic for Psorcon (diflorasone cream and ointment) was marketed in the second quarter of 2. Future Trends Atrisone (dapsone topical gel) is in Phase III clinical trials for the treatment of moderate to severe acne. It is also being investigated to relieve pain and itching from burns. Development has been suspended for a prescription topical antibiotic, Locilex (pexiganan cream). The first of a class called magainins, Locilex was submitted to the FDA for an indication in treating diabetic foot ulcers that become infected. An FDA committee requested that more studies be done before approval will be reconsidered. Clinical studies are continuing for halofuginone cream in the treatment of scleroderma. An oral form of the drug received an orphan indication for scleroderma in early 2. Halofuginone inhibits specific kinds of collagen synthesis to prevent skin and internal organ damage from excess collagen accumulation. Phase III trials have started in the United States for resiquimod, an immune response modifier, in the treatment of recurrent genital herpes, a sexually transmitted disease (STD) caused by the herpes simplex virus (HSV). Resiquimod is made by the same company that makes a similar agent, Aldara (imiquimod) for treating genital warts. ANTIDIABETICS People with diabetes either do not produce enough of the hormone insulin or their bodies do not effectively utilize the insulin that is produced. Insulin regulates the amount of glucose or sugar in the blood. The most common of the several forms of diabetes is called diabetes mellitus, which is generally divided into two major types. The overwhelming majority of people with diabetes have what is called Type 2. Typically appearing in adults, Type 2 diabetes is more likely to be treatable with oral antidiabetic drugs. Type 1 diabetes used to be called juvenile diabetes because it is most often diagnosed in children and adolescents. People with Type 1 almost always have to inject additional insulin to control their blood sugar levels. Concern is growing that the United States may be on the verge of a diabetes epidemic. According to statistics released in January 21 by the Centers for Disease Control and Prevention (CDC), the number of adults in this country who have diabetes went up by about 6 percent in just one year (between 1998 and 1999). A big cause for the increase, the CDC finds, is an even higher rise in obesity. In 1999, almost 2 percent of U.S. adults were considered obese (commonly defined as weighing more than 2 percent over ideal weight or having a body mass index of 28 or above) as compared to 12 percent in If the trend continues, up to 22 million U.S. citizens could have diabetes by the year 225. Diabetes is a risk factor for developing other chronic conditions like heart disease, hypertension, other cardiovascular diseases and kidney failure. It is the leading cause of new cases of blindness in adults and it accounts for a significant percentage of amputations in the world. PMPY costs for antidiabetic drugs, both oral and insulins, grew 25.9 percent in 2, after rising 22.2 percent in Increases in the average cost per prescription accounted for two-thirds of the 2 increase. Future Trends The FDA accepted for review an NDA filed late in 2 for the approval of Symlin (pramlintide). An injectable synthetic analogue of the hormone amylin, which helps to regulate glucose metabolism, Symlin can be used in both Type 1 and Type 2 diabetes. If approved, it will be used in conjunction with insulin. ORAL HYPOGLYCEMICS Approximately 9 percent of people who have diabetes have Type 2. Often overweight, people with Type 2 diabetes develop insulin resistance meaning that the insulin they produce is not used effectively. In some cases, insulin production also declines. As a result, glucose accumulates in the blood. If exercise and dietary changes do not relieve symptoms, people with Type 2 diabetes can take an oral hypoglycemic agent. Insulin may be needed in some cases. Six classes of oral antidiabetic drugs are now available in the United States. Because each class has a different method of action, they are frequently taken in combination with each other or with insulin, if a single drug is not effective enough. 11 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 111

74 Sulfonylureas increase insulin release from the pancreas. The oldest class of oral antidiabetic drugs, they can cause hypoglycemia blood sugar levels that are too low, especially in older patients. Biguanides reduce glucose production from the liver and they also increase sensitivity to insulin. Alpha-glucosidase inhibitors delay intestinal absorption of carbohydrates. Thiazolidinediones act in ways that are different from other oral antidiabetics to raise insulin sensitivity and to lessen glucose production. Meglitinides promote insulin secretion, but they are metabolized quickly making them useful to manage hyperglycemia that can occur after meals when meals cannot be eaten on a regular schedule. D-phenylalanine derivatives are the newest class. They work by stimulating insulin release early during mealtimes and by controlling surges in blood sugar levels after eating. FIGURE A24 THERAPY CLASS DRUG MARKET SHARE TREND ORAL HYPOGLYCEMICS Glucophage ($66.17) Glucotrol XL ($26.17) Glyburide/Micronized ($48.8) Glipizide ($3.87) Rezulin ($156.95) As second generation oral sulfonylurea medications become available generically, the original brand name products are declining in use. One exception is Glucotrol XL (glipizide sustainedrelease), which is not available generically. The use of Glucotrol XL has maintained about an 11 percent market share since CHANGE IN PMPY COST 2 PMPY = $ While the market shares for Precose (acarbose) and Prandin (repaglinide) remain at about 1 percent each, Glucophage s (metformin) market share continued to rise from 18.8 percent in 1997 to 27.8 percent in 2. When Rezulin (troglitazone) was removed from the market because of its side effects in 2, the market shares for Avandia (rosiglitazone) and Actos (pioglitazone) immediately rose from a combined 1.5 percent in 1999 to 11 percent in 2. Both were introduced in The first D-phenylalanine derivative was approved in early 21. Starlix (nateglinide), has a mechanism of action different from other oral antidiabetic medications. With both a fast onset and a short duration of action, it can be taken close to mealtimes making it more convenient for patients to use. It can be used by itself or in combination with metformin. Glucophage XR (metformin extended release), a once-a-day formulation, was approved in October 2 for initial treatment of Type 2 diabetes. Glucovance (metformin and glyburide) was also given FDA approval. Glucovance can be used for initial therapy or for patients whose diabetes is not controlled adequately with a sulfonylurea. INSULINS Type 1 diabetes is an autoimmune condition. People who have it produce antibodies to insulin or to the cells that produce insulin. The result is a deficiency of natural insulin that has to be replaced with artificially manufactured insulin. All the manufactured insulins that are currently available are injectable products. FIGURE A25 THERAPY CLASS DRUG MARKET SHARE TREND INSULINS 112 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT Humulin N ($45.8) Humulin 7/3 ($52.63) Humulin R ($35.5) Novolin 7/3 ($66.91) Novolin N ($55.38)

75 A rapid-acting insulin called Novolog (insulin aspart) was approved by the FDA in June 2. Because Novolog has a fast onset and a short duration of action, it can be injected immediately before meals and still be effective. One of the major inconveniences of most insulins is the half-hour waiting time required between injecting insulin and eating meals. New indications were granted for another rapid-acting insulin, Humalog (insulin lispro injection [rdna origin]). Originally approved in 1996 for adults under the age of 65, Humalog had to be injected 15 minutes before meals. It is now indicated for children as young as 3 old, for people over the age of 65 and for injection immediately after meals. In addition, Humalog can now be used in combination with metformin. The FDA approved Lantus (insulin glargine) in April 2 for once-daily subcutaneous administration in the treatment of adult and pediatric patients with diabetes. Lantus will be used in patients who require basal-long-acting insulin for control of hyperglycemia. Although the patent for Humulin (rdna human insulin) expired in 2, generic equivalents have not yet entered the market. In an interesting move, the maker of Novolin (human insulin, [rdna origin]) has begun to produce a private label called ReliOn /Novolin exclusively for the Wal-Mart chain. Future Trends An NDA is expected to be submitted this year for the FDA approval of inhaled insulin. Under the brand name Exubera, the product would be delivered as a dry powder using an inhalation device similar to those used in asthma. The first generic products equivalent to Glucophage should begin appearing by the end of this year. ANTICANCER Years ago, the diagnosis of cancer was a virtual death sentence. By the time many cancers showed recognizable symptoms, they had advanced too much to be treatable. In fact, according to the American Cancer Society, less than one in five Americans who were diagnosed with cancer in the 193s was still living after five. At that time and for many after, cancer therapy consisted mainly of palliative care and pain management. Today, preventative strategies, early detection and enhanced treatment mean that over half of all cancer patients survive for at least five after being diagnosed. Many cancer survivors return to active and productive lives with no recurrence of cancer. Even so, cancer still claims half a million lives in this country each year. While the tendency to have some cancers is inherited, about two-thirds of all cancer deaths in the United States are related to lifestyle approximately one-third can be attributed to smoking cigarettes and another third involve dietary factors. With modern treatments, many cancers are not only controlled, they can be cured. For any cancer patient, however, treatment depends on what type the cancer is and how much it has spread. More cancer patients are becoming active partners in treatment decisions. Surgery, radiation and drug therapy are still the standards of cancer treatment, but new techniques and products are making these options more bearable. Some of the harsh side effects associated with drug treatment, for example, have been lessened not only by newer drugs with more specific actions, but also by new ways to alleviate or even eliminate unwanted side effects. Among recent developments in cancer treatment are: In May 21, less than three months after an NDA was submitted, the FDA approved Gleevec (imatinib mesylate, STI 571) for the treatment of chronic myeloid leukemia (CML). Previously given both orphan and Fast-Track designations, Gleevec (known as Glivec in other countries) is a signal transduction inhibitor (STI), a new class of drugs that interfere with tumor development. Taken orally, Gleevec selectively attacks the Philadelphia chromosome, a specific defect frequently associated with CML. Trisenox (arsenic trioxide) is an injection approved for second-line therapy in acute promyelocytic leukemia (APL). It also has orphan designations for multiple myeloma and for myelodysplastic syndrome. After receiving orphan status in November of 1999, Mylotarg (gemtuzumab ozogamicin) was approved in May 2 for relapse of a type of leukemia in patients over the age of 6. The first in a new class of monoclonal antibody-derived drugs called antibody-targeted chemotherapy, Mylotarg connects an anti-cancer drug to an antibody that is specific for antigens on leukemia cells. Although Mylotarg is given by injection, it can be used for outpatient treatment. Trelstar Depot (triptorelin pamoate) was approved in June 2 for palliative treatment in advanced prostate cancer. A biological drug, Pacis (BCG, live) has been approved for treating localized cancers of the bladder. Because it contains a live micro-organism, Bacillus Calmette-Guerin (BCG), Pacis will be administered in office or clinic settings where its use and disposal can be monitored. It is intended to be given in six weekly treatments. 114 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 115

76 Nolvadex (tamoxifen) received a new indication in reducing the risk of invasive breast cancer for women who have had surgery or radiation for localized breast cancer. In the treatment of advanced ovarian cancer, Taxol (paclitaxel) was approved for higher doses given over a shorter time and less often than previous regimens. The new dosing option means that outpatient treatment is now possible for many women who required hospitalization for previously approved regimens. Legal maneuvers to extend patent protection for Taxol were overturned by a federal court. A generic was launched in November 2. Two aromatase inhibitors that were previously approved for use after other drugs failed can now be used as first-line treatment for advanced breast cancer in postmenopausal women. Femara (letrozole) and Arimidex (anastrazole) have both received approval for this new indication. Camptosar (irinotecan) was given a new indication in combination with 5-FU and leucovorin for treating metastatic colon and rectal cancers. A new implanted dosage form of the drug in Lupron (leuprolide) has been approved under the brand name Viadur for palliative treatment of advanced prostate cancer. A topical gel form of Targretin (bexarotene 1) was given FDA approval in July 2. It will be used for patients with skin lesions from early cutaneous T-cell lymphoma (CTCL) that has not responded to other treatments. An oral form of Targretin was approved in 1999 for CTCL. Better screening means that many cancers are discovered sooner. A number of new laboratory tests have recently been introduced and more are in development. For instance, beginning in May 2, a new blood test called DR-7 was marketed to hospitals and labs in limited areas. DR-7 can detect up to 13 types of cancer while they are still in early stages before symptoms become apparent. A second, similar blood test, OncoCheck is in late phase trials. PepGen has already been introduced for the laboratory diagnosis of gastric cancers and peptic ulcers. ImmunoCyt recently became available in the United States. It is a diagnostic urine test for early recurrent bladder cancer. A urine test for multiple myeloma has been approved in Europe and its manufacturer plans to market it in the United States as soon as it receives FDA approval. Already approved is a predictive genetic test named Colaris that can assess individual risk for hereditary colon cancer and uterine cancer genes. ORPHANS Under provisions of the Orphan Drug Act, the FDA has the ability to designate orphan drugs. Special incentives are offered to encourage the development of drugs for diseases that affect relatively small numbers of people generally fewer than 2, patients in the United States. In exchange for incurring development costs that would ordinarily not be recouped from small patient populations, manufacturers that choose to invest in orphan drugs are released from paying user fees, may receive research funding, are granted marketing exclusivity for seven and could qualify for tax credits on development costs. In the field of cancer treatment, several new drugs received orphan designations in 2 and early 21. A new dosage form of carmustine (BCNU) has been designated as an orphan drug for the treatment of glioblastoma multiforme, a type of brain cancer. Currently known as DTI-15, the drug consists of carmustine dissolved in absolute ethanol. When it is injected directly into tumor tissue, the tumor is literally saturated with DTI-15 yet systemic circulation of the drug is severely limited. Genasense (G-3139), the first of the antisense drugs to reach the U.S. market, was given Fast Track approval status as well as an orphan designation in August 2 for advanced malignant melanoma. Genasense is in clinical trials for several other cancers including prostate cancer, multiple myeloma, chronic lymphocytic leukemia (CLL), acute myelocytic leukemia (AML), colon cancer and lung cancer. In general, drugs of this type make cancer cells more susceptible to other drugs and radiation. Antisense drugs are made from fragments of DNA. Called oligonucleotides, the altered fragments stick to messenger RNA in cancer cells and prevent the production of Bcl-2 a protein that is associated with cancer cells resistance to drug therapy. In January 21, an orphan indication was granted for MTC-DOX, a unique delivery method for the cancer drug doxorubicin. Using iron and activated carbon microparticles as a carrier, doxorubicin can be localized to specific areas of the body through the use of external magnetic attraction. Its first indication is for primary liver cancers. Magnetic targeted carriers (MTCs), as this type of drug has been designated, are also being investigated for other diseases as well as for other types of cancer. Thymoglobulin (anti-thymocyte globulin, rabbit), an immunosuppressant approved for kidney transplant patients in 1998, now has orphan status for myelodysplastic syndrome (MDS). A possible precursor to leukemia, MDS involves a defect in the production of normal blood cells. The first of a new class sometimes called guanosine analogues, Tiazole (tiazofurin), received orphan designation early in 21. For the treatment of accelerated-phase or blast crisis chronic myelogenous leukemia (CML), Tiazole and drugs like it inhibit an enzyme inosine 5 - monophosphate dehydrogenase (IMPDH) type II which is concentrated in cancerous cells. Virulizin received orphan designation in February 21. In development as second-line therapy for advanced pancreatic cancer patients who cannot tolerate or who have already tried usual drug therapy. Virulizin is immunotherapy it mobilizes the body s immune system to attack cancer cells. Wobe-mugos, a mixture of proteolytic enzymes, was given an orphan designation in adjunct treatment of patients with multiple myeloma. An oral drug that has been used in European countries for over 25, wobe-mugos will be given to alleviate the side effects of cancer drugs and to enhance the immune system. In studies, wobe-mugos has shown effectiveness in reducing inflammation and swelling associated with radiation, as well. Besides orphan designations, the FDA has several other ways to make both the development and review of new drugs quicker. Fast-Track designations are given to manufacturers seeking approval for drugs with potential to manage previously untreatable or under treated conditions. Unlike submitting regular NDAs or BLAs, which must be complete, the manufacturer of a Fast-Track drug is allowed to file sections of an application as soon as information is available. The FDA then reviews each part as it is received. In Accelerated Development, an NDA/BLA can be submitted on the basis of a single pivotal or especially significant Phase II/III study, rather than the two or more Phase III trials required for regular submission. After NDA/BLA submission, Priority Review is 116 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 117

77 granted for drugs that offer significant improvements in prevention, diagnosis or treatment of lifethreatening or severely debilitating conditions. Priority reviews are completed within six months. An inhibitor of the enzyme, thymidylate synthase, Thymitaq (nolatrexed dihydrochloride), has entered Phase III clinical investigation for several types of cancer. It has been most researched for liver cancers that cannot be removed surgically. It was given Fast-Track status in April 2. Fast-Track approval is also in process for Onco TCS, a new delivery system for vincristine. To be used for treatment of relapses of non-hodgkin s lymphomas, the drug is encased in a patented transmembrane carrier system (TCS) that not only enhances its ability to collect within the tumor but also limits its side effects. IMC-C225 (cetuximab), an anti-epidermal growth factor receptor (EGFR) monoclonal antibody, has been given Fast-Track status in treating refractory colorectal cancer. It is also in trials for the treatment of head, neck and pancreatic cancers. Phase III trials continue for Protegrin IB-367 Rinse, which is on Fast-Track for FDA approval. The most advanced commercial application of adapted natural antibiotic peptides, the drug is being developed to relieve pain and prevent infection of mouth sores that result from many chemotherapy and radiation regimens. Other protegrins are in trials for respiratory conditions. FIGURE A26 THERAPY CLASS DRUG MARKET SHARE TREND ANTICANCER CHANGE IN PMPY COST 2 PMPY = $ Generic ($82.71) Tamoxifen ($117.34) Novaldex ($11.5) Megace ($189.79) Eulexin ($292.84) Intron A ($ ) Future Trends In December, the FDA s Oncologic Drugs Advisory Committee recommended approval for Campath (alemtuzumab) in the treatment of chronic lymphocytic leukemia (CLL). Campath is a monoclonal antibody that was given orphan status as well as accelerated review in 2. It is in further testing for other cancers, for transplant rejection and for multiple sclerosis. The BLA for Bexxar (tositumomab, iodine I 131 tositumomab) was filed in September 2. Bexxar is a monoclonal antibody with radioactive iodine 131 attached to it. The antibody seeks out and fastens to a protein located only on the surface of cancerous B-cells found in many forms of non-hodgkin s lymphoma. The radioactive element then destroys the cancer cells. An NDA was filed in mid-december 2 for abarelix depot-m, an inhibitor of gonadotropin releasing hormone (GnRH). Accepted for priority review in January 21, the initial NDA is for treating prostate cancer. Clinical trials for endometriosis and other indications are continuing. A biologic license application (BLA) for Zevalin (ibritumomab tiuxetan) was accepted for priority review in January 21. A monoclonal antibody attached to a radioisotope, it will be used along with Rituxan (rituxumab) a second monoclonal antibody drug. Zevalin is being considered for the treatment of several forms of non-hodgkin s lymphoma. An NDA was accepted for review in March 21 for IntraDose (cisplatin and epinephrine). An injectable gel, IntraDose will be used in head and neck cancers that do not respond to current treatments or that recur after conventional treatments. An amended NDA containing information requested by the FDA will likely be filed for Foscan PDT (temoporfin, mthpc) during the second quarter of 21. A type of photodynamic therapy in which light-sensitive drugs are activated by laser light, Foscan has been studied for the treatment of advanced head and neck tumors. Originally intended for palliative care of inoperable tumors, Foscan may reduce or even eliminate tumor tissue, as well. Faslodex (fulvestrant) is an estrogen receptor downregulator, a new class of drugs being investigated for advanced breast cancers in postmenopausal women. Recent press releases from its manufacturer indicate that NDA filing is planned for Faslodex during the first half of 21. An NDA may be submitted by the end of 21 for rubitecan. An oral camptothecin, rubitecan is currently in late stages of clinical testing for pancreatic cancer. The BLA for Melacine (melanoma theraccine injection) is expected to be filed during 21. A vaccine to be given to patients in late stages of melanoma, Melacine is a combination of deactivated melanoma cells and other components that stimulate the immune system. It will be given in a series of 2 injections over 12 weeks, followed by less frequent maintenance injections. Another vaccine, Avicine, is in early Phase III clinical studies for the treatment of colorectal cancer. Phase II trials are showing good results from other vaccines including OvaRex Mab, for advanced recurrent ovarian cancers and BrevaRex Mab for late stages of breast cancer. 118 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 119

78 Another vaccine-type treatment called Oncophage has entered Phase III trials in treating renal cell cancer. A heat shock protein-peptide complex, Oncophage is derived from tumor cells that are surgically removed from individual patients, specially treated under laboratory conditions, then re-introduced into the patient to promote a strong immune response against the remaining cancer cells. Oncophage is also under investigation for multiple other cancers. Phase III trials are being conducted for the use of eflornithine (DFMO) for treating cancers of the bladder surface and non-melanoma skin cancers. It is also in the early stages of testing for other cancers. Eflornithine permanently blocks an enzyme critical to cancer cell replication. Irofulven (also called MGI 114, hydroxymethylacylfulvene or HMAF) is the first drug in the acylfulvene class. Currently beginning approximately 18 months of Phase III trials for patients with advanced pancreatic cancer, it is also in earlier phase trials for other cancers that appear as solid tumors. Alimta (pemetrexed disodium also called LY 231, 524 or MTA) is an antifolate-type anticancer drug that is different from earlier folate inhibitors. It disrupts three or more enzymes involved in folate synthesis an essential part of cancer cell replication. Alimta is in Phase III and earlier trials for treatment of several solid tumor forms of cancer. IMG 862 is an investigational angiogenesis inhibitor, a class of drugs that received a lot of attention in the popular press a couple of ago. Although not as revolutionary as first expected, the angiogenesis inhibitors do hold promise. As a class, they seem to stimulate the immune system as well as inhibiting the growth of new blood vessels to tumor tissue. IMG 862, given as nose drops, is in various phases of clinical trials for a number of cancer types including Kaposi s sarcoma and prostate cancer. Metvix, a derivative of 5-aminolevulinic acid (ALA), is a photoactivated cream that is applied to actinic keratoses, allowed to accumulate for about three hours then activated by a specific wavelength of red light. Only treated tissue is destroyed, very little skin around the treated area is affected and scarring is minimal. Phase II trials have been completed in the United States and in Australia. Bacillus Calmette-Guerin (BCG) is being tested in combination with BEC2 (mitumomab). BEC2 is a monoclonal antibody that acts like GD3, an antigen on the surface of some kinds of cancer cells. BCG stimulates the immune system to attack BEC2 and, as a result, GD3 is also destroyed. Phase III trials are under way to determine the combination s effectiveness and safety in delaying or preventing recurrence of small cell lung cancers. It is also in trials for other lung cancers and for malignant melanoma. Phase II trials continue and Phase III studies have begun for Allovectin-7 (HLA-B7/Beta2M DNA Lipid DMRIE/DOPE complex) in the treatment of malignant melanoma and head/neck cancers. The first in a new class that links human antibodies to lipids, Allovectin-7 has already been given orphan approval for treating metastatic melanoma. A new selective estrogen receptor modulator (SERM), arzoxifene (LY-353, 381) is in Phase III testing for advanced breast cancer and in earlier phases for endometrial cancer. Additional trials are being conducted for oxiplatin after an FDA committee determined that it was not effective enough to be approved as first-line therapy for metastatic colon cancer. An NDA will be submitted for second-line therapy but not for at least a year. NDAs for UFT (tegafur/uracil) and for Orzel (UFT and leucovorin) were withdrawn by the manufacturer early in 2. Plans are to resubmit both drugs in the oral treatment of colorectal cancers after the FDA has reviewed additional information submitted by the manufacturer. Whether further trials will be conducted for matrix metalloproteinase inhibitors (MMPIs) is in doubt. Phase III trials of the lead compound, marimastat, showed no appreciable benefit over placebo in treating small cell lung cancer, glioblastoma or pancreatic cancers. Phase III clinical trials for another MMPI, prinomastat, were terminated in the summer of 2 after it, too, had disappointing results in treating advanced cases of prostate and non-small cell lung cancer. Promycin (porfiromycin) has also shown poor results in Phase III trials for inoperable head and neck cancers. Further studies that were planned for its use have been delayed and may eventually be cancelled. Following a Not Approvable letter that was issued in September 2, new information will be submitted to amend the original NDA for Aptosyn (exisulind), a selective apoptotic antineoplastic drug (SAAND). Aptosyn was originally submitted for approval to treat familial adenomatous polyps, a precursor to colon cancer. In combination with Taxotere (docitaxel), Aptosyn is being tested for patients with non-small cell lung cancer that has not responded to previous drug treatment. It is in earlier stages of research for several other types of cancer, too. SAANDs promote apoptosis (also called programmed cell death) of cancer cells but not normal cells. An application for Ceplene (histamine dihydrochloride) formerly called Maxamine was deemed Not Approvable by the FDA in December 2. Even though it had been given orphan status early in 2, Ceplene s full approval was denied in part because trial designs may not have been randomized adequately. An immunotherapy, it was studied in combination with interferon to protect immune cells for patients with metastatic malignant melanoma. Additional testing will be done for the melanoma indication while Phase III and Phase II trials continue for other cancers and for hepatitis C. 12 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 121

79 An amended NDA for Atragen (tretinoin liposome for injection) to treat acute promyelocytic leukemia was denied by the FDA in January 21 because the agency saw no need for an injectable form of a drug which is available orally. The manufacturer will submit applications for approval in Europe as well as in the United States for other types of cancer. Besides developing drugs involved in the direct treatment of cancer, other drugs are being studied that target side effects of the disease or its treatment. For example: Zometa (zoledronic acid) is a bisphosphonate being investigated for treating hypercalcemia of malignancy (HCM). A complication of advanced cancers, HCM occurs in approximately onetenth of cancer patients. Zometa received priority review after being granted orphan status in August 2. In September, it was deemed Approvable pending additional information on its use in metastatic bone complications. Palonsetron is a 5HT3 antagonist similar to Kytril (granisetron) and Zofran (ondansetron). It is currently in late Phase III trials. An NDA for palonsetron to be used in controlling chemotherapy-induced nausea and vomiting could be filed in early EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT

80

81 a ppendix B Drug Utilization and Cost by Sex and Age 123

82 DRUG UTILIZATION AND COST BY SEX AND AGE This portion of the Drug Trend Report examines variations in drug utilization and cost as related to the sex and age of Express Scripts members. The first section of Appendix B discusses the most frequently used therapy classes, the second section examines overall utilization and cost, and the third section details drug utilization by therapy class for male and female members within a given age group. METHODS Data used in Appendix B were taken from a database constructed for research purposes by Express Scripts. From the entire set of members who provided data for earlier sections of the Drug Trend Report, 2,265,669 members were selected randomly. All outpatient prescription pharmacy claims processed for these members during calendar year 2 were obtained. From that research data pool, a random sample of one million claims was used. Claims for prescriptions processed through the mail pharmacy service were converted to 3-day network equivalents. A final total of 1,13,966 network equivalent claims were analyzed. Each claim included the member s sex and age, the drug name, the prescription fill date and the days supply that was dispensed. Drug utilization and cost were then compared between males and females, and among members of various age groups. TABLE B1. MOST FREQUENTLY USED THERAPY CLASSES BY SEX AND AGE Females Males Percent of Percent of Rank Therapy Class Prescriptions Rank Therapy Class Prescriptions 1 Estrogens 8. 1 Antihypertensives Antidepressants Antihyperlipidemics Oral Contraceptives Antidiabetics Antihypertensives Narcotic Analgesics Narcotic Analgesics Gastrointestinal Antirheumatics/NSAIDs 4. 6 Antidepressants Cough/Cold Antirheumatics/NSAIDS Gastrointestinal Antiasthmatics 4. 9 Thyroid Beta Blockers 4. 1 Antihistamines Cough/Cold 3.8 Table B1 shows the 1 most frequently used therapy classes for females and males with the percentages of prescriptions filled in each class, respectively. Accounting for 8 percent of all prescriptions filled by females, estrogens were the most frequently used therapy class among women for the second consecutive year. Although a small number of men use estrogen or oral contraceptive therapy for certain types of cancer, estrogens are primarily used by women to replace post-menopausal hormone loss and to decrease the risk of osteoporosis. Antidepressants were the second most common therapy class used by females. This class was ranked eighth among males during 1999, but rose to sixth place in 2. The fact that women are twice as likely as men to be diagnosed with depression may be explained by social and environmental influences as well as by sex differences. Some studies suggest that men are less likely to recognize or acknowledge that they are suffering from depression and, as a result, are less likely to seek treatment. 1 Oral contraceptives were third on the list of frequently used therapy classes for females. Other therapy classes that ranked among the top 1 for females but did not appear on the list for males include thyroid drugs and antihistamines. As in 1999, antihypertensives, antihyperlipidemics and antidiabetics were the top three therapy classes used by males in 2. While more men develop high blood pressure and high cholesterol before the age of 5, the incidence of both conditons increases in women after the fifth and sixth decade of life following the onset of menopause. 2 Diabetes appears to be equally prevalent among men and women, especially after the age of However, only antihypertensives ranked among the 1 most common therapy classes used by females. Antiasthmatics and beta blockers were both among the most frequently used therapy classes for males, yet neither made it into the top 1 list for females. The prevalence of asthma is slightly higher for males than it is for females during childhood, but the trend is reversed in adults. 4 Beta blockers continue to gain acceptance in the treatment of mild to moderate heart failure. However, evidence suggests that women are less likely to receive adequate treatment for heart failure due to misconceptions about their lower risks for developing heart disease. 5 In addition to the antihypertensives, four other commonly used therapy classes made the list for both males and females but had slightly different rankings. These therapy classes are anti-rheumatics, gastrointestinals, cough/cold and narcotic analgesics. The order in which the top 1 therapy classes were ranked did not change considerably from the previous year for either sex. Antihistamines replaced penicillins on the list for females as the 1 th most frequently used therapy class. For males, beta blockers and anti-rheumatics replaced penicillins and calcium blockers. While penicillins and beta blockers were ranked ninth on the lists for 1999 and 2, respectively, the anti-rheumatics class made its first appearance on the 2 top 1 list in the seventh position. 1 Lowenthal K, et al. Gender and depression in Anglo-Jewry. Psychological Medicine 1995;25(5): National Heart, Lung, and Blood Institute (NHLBI). Cardiovasuclar Information for Patients and the General Public. Accessed March, Centers for Disease Control and Prevention. National Diabetes Fact Sheet: National estimates and general information on diabetes in the United States. Revised edition. Atlanta, GA: U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, de Marco R, Locatelli F, Sunyer J, Burney P. Differences in incidence of reported asthma related to age in men and women. A retrospective analysis of the data of the European Respiratory Health Survey. American Journal of Respiratory Critical Care Medicine. 2;162(1): Mosca L, Manson JE, Sutherland SE, Langer RD, Manilo T, Barrett-Conner E. Cardiovascular disease in women: a statement for healthcare professionals from the American Heart Association. Writing Group. Circulation 1997;96: EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 125

83 TABLE B2 MOST FREQUENTLY USED THERAPY CLASSES BY AGE Age Group Rank Therapy Class Percent of Prescriptions Birth to 9 Years 1 Penicillins Antiasthmatics Cough/Cold Antihistamines 8. 5 Cephalosporins to 19 Years 1 Dermatologicals Penicillins 8. 3 Antiasthmatics Stimulants/Anti-obesity Antihistamines to 29 Years 1 Oral Contraceptives Narcotic Analgesics Antidepressants Cough/Cold Dermatologicals to 39 Years 1 Oral Contraceptives Antidepressants Narcotic Analgesics Cough/Cold Anti-rheumatics to 49 Years 1 Antidepressants Antihypertensives Narcotic Analgesics Estrogens Gastrointestinals to 59 Years 1 Estrogens Antihypertensives Antihyperlipidemics Antidepressants Antidiabetics to 69 Years 1 Antihypertensives Antihyperlipidemics Estrogens Antidiabetics Diuretics 5. 7 to 79 Years 1 Antihypertensives Antihyperlipidemics Diuretics Beta Blockers Calcium Blockers Years and Above 1 Antihypertensives Diuretics Calcium Blockers 6. 4 Gastrointestinals Beta Blockers 4.7 TABLE B3 MOST FREQUENTLY USED THERAPY CLASSES BY SEX AND AGE. Females Males Percent of Percent of Age Group Rank Therapy Class Prescriptions Rank Therapy Class Prescriptions Birth to 9 Years 1 Penicillins Penicillins Cough/Cold 9. 2 Antiasthmatics Cephalosporins 8. 3 Antihistamines Antiasthmatics Cough/Cold Antihistamines Cephalosporins to 19 Years 1 Dermatologicals Dermatologicals Oral Contraceptives Stimulants/Anti-obesity Penicillins Antiasthmatics Cough/Cold Penicillins Antihistamines Antihistamines to 29 Years 1 Oral Contraceptives Narcotic Analgesics Antidepressants Cough/Cold Narcotic Analgesics Dermatologicals Cough/Cold Antidepressants 6. 5 Dermatologicals Penicillins to 39 Years 1 Oral Contraceptives Narcotic Analgesics Antidepressants Antidepressants Narcotic Analgesics Cough/Cold Cough/Cold Gastrointestinals Anti-rheumatics Anihypertensives to 49 Years 1 Antidepressants Antihypertensives 1. 2 Estrogens Narcotic Analgesics Narcotic Analgesics Antihyperlipidemics Antihypertensives Antidepressants Anti-rheumatics Gastrointestinals to 59 Years 1 Estrogens Antihypertensives Antidepressants Antihyperlipidemics Antihypertensives Antidiabetics Anti-rheumatics Beta Blockers Gastrointestinals Calcium Blockers to 69 Years 1 Estrogens Antihypertensives Antihypertensives Antihyperlipidemics Antihyperlipidemics Antidiabetics Diuretics Beta Blockers Antidepressants Calcium Blockers to 79 Years 1 Antihypertensives Antihypertensives Diuretics Antihyperlipidemics Antihyperlipidemics Antidiabetics Calcium Blockers Beta Blockers Estrogens Calcium Blockers Years and 1 Antihypertensives Antihypertensives 11.3 Above 2 Diuretics Diuretics Calcium Blockers Calcium Blockers Gastrointestinals 5. 4 Beta Blockers 5. 5 Thyroid Antihyperlipidemics EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 127

84 Table B2 illustrates prescription drugs used by Express Scripts members in nine different age categories. For each of the age groups, the five most frequently used therapy classes are listed along with the percentage of prescriptions filled for that class. For the youngest age group, the top five therapy classes were primarily made up of drugs used to treat acute conditions. With increasing age, members were more and more likely to use drugs for the treatment of chronic conditions. The most frequently used therapy classes for children from birth through 9 of age included anti-infectives, antiasthmatics, cough/cold and antihistamines. The prevalence of asthma in children younger than 4 of age has increased has dramatically over the last decade. According to one source, asthma is more prevalent only in individuals between 5 and 14 of age. 6 Other allergic disorders, such as hay fever, are very common among infants and children as well. Anti-infectives, antiasthmatics and antihistamines were also on the top five list for 1-19 year olds. The most commonly used therapy class for this age group was dermatologicals drugs used to treat chronic skin conditions such as acne and ezcema as well as acute skin infections and rashes. Rounding out the top five therapy classes for teens and preteens were the stimulant/antiobesity drugs. This class includes drugs used to treat attention-deficit/hyperactivity disorder (ADHD), a condition more commonly diagnosed in males than in females. The overwhelming majority of women in their childbearing fall into the 2-29 year and the 3-39 year age brackets explaining why oral contraceptives were once again the most frequently used therapy class for members in their 2s and 3s. Statistics indicate that oral contraceptives are the most widely used form of birth control by women in their 2s. 7 Rising from fifth place in 1999, antidepressants ranked third among members 2-29 of age and remained among the top five therapy classes for the next three decades. Starting in the fifth decade, antihypertensive medications joined the list of the top five most frequently used therapy classes. These drugs then occupied the first or second position for the remainder of the life span. Drugs in other therapy classes, such as diuretics, beta blockers and calcium blockers, that are used to treat high blood pressure became widely used among members 6 of age and above. Antihyperlipidemics were also commonly used by older members. Although gastrointestinals entered the top five list for the 4-49 year old age group, they disappeared from the list for the next three age groups and then reappeared as the fourth most commonly used therapy class by members 8 of age and older. Table B3 further categorizes drug use by sex and age. The most frequently used therapy classes differed very little between males and females from birth to 9 of age. Drugs in the stimulant/anti-obesity class represented 11 percent of the prescriptions filled for males in the 1-19 age group. The drugs were not, however, among the top five therapy classes for females in any age group or for males of other ages. 6 National Heart, Lung, and Blood Institute (NHLBI) Data Fact Sheet. Asthma Statistics. January Publication No.: Accessed March, The Alan Guttmacher Institute. Facts in Brief: Contraceptive Use Accessed March, 21. Oral contraceptives accounted for 1.1 percent of the prescriptions used by females in the 1-19 year age group. According to one source, 44 percent of teenage women who use any form of birth control choose oral contraceptives. 8 Not surprisingly, the most frequently used therapy class for females in their 2s was also the oral contraceptives accounting for one-quarter of all prescriptions used by that group. Narcotic analgesics, used to treat both chronic and acute pain of various origins, ranked among the top five therapy classes in the 2-29 year age group for both males and females. This therapy class remained on the list in the next two age groups for both sexes, although the rankings varied. Interestingly, narcotic analgesics dropped out of the top five for both males and females after the age of 49. Antidepressants were the second most frequently used therapy class among females aged 2-29 and the fourth among males in the same age group. The use of antidepressants increased in frequency for members in their 3s ranking in second place for both sexes. They continued to be among the top five for females up to the age of 69 but dropped out of the top five for males after age 49. The estrogens class began to be used frequently by females in the 4-49 year age bracket, marking the transition into menopause. It then rose to the most commonly prescribed therapy class among female members in their 5s and 6s. Estrogens disappeared from the top five list, though, for female members 7 of age and older. Antihypertensives made the top five most frequently used therapy class list for males beginning in their 3s and for females in their 4s. While they remained as the number one class for males in all age groups above the age of 4, antihypertensives rose from fourth place among females in the 4-49 year age group to third place for females in the next two age groups. Antihypertensives finally reached the top of the list for females 7 of age and older. Calcium blockers, diuretics and beta blockers also used in the treatment of high blood pressure as well as for various types of heart disease began to appear on the top 1 list for males in the 5-59 year age group and for females a decade older. Anti-rheumatics represented the number five therapy class for females between the ages of 3-49, then climbed to number four in the next decade. This therapy class was not in any of the listings for men, however. Antihyperlipidemics made the top five list for males beginning in their 4s but did not appear on the list for females until the 6-69 year age group. Antidiabetics were among the most commonly used therapy classes only for men aged OVERALL UTILIZATION AND COST BY SEX AND AGE Since these analyses are based on a random sample of claims, the underlying sex and age distribution of sample members is unavailable. Therefore, these analyses are for descriptive purposes only and do not provide the reason(s) for relatively high or low utilization by a sex/age category. That is, particularly high or low utilization within a sex/age category could be due to the relative number of members in that category, to the relative usage of drugs per category member or to a combination of both factors. 8 The Alan Guttmacher Institute. Facts in Brief: Contraceptive Use EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 129

85 TABLE B4 OVERALL DRUG UTILIZATION BY SEX AND AGE # of Prescriptions of Prescriptions 9 Age Group Females Males Total Females Males Total Birth-9 24,85 3,875 55, ,144 3,971 64, ,299 21,243 81, ,182 49,363 15, ,595 88,59 245, ,521 19,97 286, ,285 69, , ,7 32,144 67, ,128 1,971 25, Total 687, , 1,13, Table B4 shows the number and percentage of prescriptions for all therapy classes combined that were attributable to females, to males and to all members combined in each age group. FIGURE B1 PERCENT OF PRESCRIPTIONS FILLED BY MEMBERS OF EACH SEX AND AGE CATEGORY of Prescriptions Females Males Due to rounding error, the sum of the percentage of prescriptions used by males and females within an age group may not exactly equal the total percentage of prescriptions filled by that age group. Likewise, also due to rounding error, the sum of the percentages of prescriptions filled by females, or by males, of each age group may not exactly equal the total percentage of prescriptions filled by that sex Overall, more prescriptions were filled for females than for males during 2. However, little difference was evident in the percentage of prescriptions attributed to each sex in the two youngest and the two oldest age groups. Although females filled 6.8 percent of prescriptions during 2, they made up only 5 percent of the members in the original research database. Taken together, these two findings indicate that females filled more prescriptions per member than males. The 95-percent confidence intervals were calculated for each of the sample percentages shown in Table B4. Confidence intervals estimate how closely values based on a sample represent the population values (in this case, the values that would have resulted if the entire Express Scripts Drug Trend database had been used in these analyses). The 95-percent confidence interval calculations indicate that each of the sample percentages is accurate within +/-.1 percent. For example, Table B4 states that females aged -9 accounted for 2.2 percent of sample prescriptions. The confidence interval calculation indicates a 95 percent probability that the percentage of prescriptions attributable to females between the ages of birth-9 in the entire Express Scripts database lies between 2.1 percent and 2.3 percent. 13 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 131 TABLE B5 PERCENT OF TOTAL AWP, MEAN AWP PER PRESCRIPTION AND PERCENT CHANGE IN MEAN AWP PER PRESCRIPTION BY SEX AND AGE GROUPS Change in Mean AWP Mean AWP from of Total AWP 1 per Prescription 1999 to 2 Age Group Females Males Total Females Males Total Females Males Total Birth $31.94 $34.27 $ $47.56 $56.88 $ $42.26 $52.45 $ $49.22 $59.89 $ $52.81 $62.27 $ $5.59 $59.88 $ $5.9 $57.77 $ $51.86 $55.34 $ $47.63 $5.7 $ Totals $49.39 $57.1 $ Due to rounding error, the sum of the percentage of AWP attributed to males and females within an age group may not exactly equal the total percentage of AWP attributed to that age group. Likewise, also due to rounding error, the sum of the percentages of AWP attributed to females, or to males, of each age group may not exactly equal the total percentage of AWP attributed to that sex.

86 Average Wholesale Price (AWP) was used to reflect ingredient cost in these analyses ensuring comparability across time and for all clients. Table B5 presents the percent of AWP costs accounted for by each sex/age group combination and the mean AWP per prescription in the year 2. Table B5 and Figure B2 show the percent change in mean AWP per prescription from 1999 to 2 as a function of age and sex. The percentage of total pharmacy costs (percent of total AWP) for each of the sex/age group categories in 2 was similar to that shown in Once again, the majority of costs were attributable to members aged 2 through 59. Females accounted for 6.8 percent of all prescriptions filled by Express Scripts members but only 57.3 percent of costs, indicating that the mean cost per prescription is less for females than males. The mean AWP per prescription was $49.39 for females and $57.1 for males. As in 1999, children under 1 of age had the lowest average cost per prescription of all the age categories, paying a mean of $ Whereas members in their 7s comprised the age group with the highest mean cost per prescription in 1999, the title in 2 was held by members aged 4-49 who paid $56.23 per prescription on average. The 95-percent confidence interval calculations indicate a 95 percent probability that each of the sample percentages listed under the heading of Total AWP in Table B5 were within +/-.1 percentage points of the corresponding percentage values which would have resulted if the entire Express Scripts Drug Trend database had been analyzed. Likewise, 95-percent confidence interval calculations indicate that for each of the mean AWP values calculated from the sample (Table B5), there is a 95 percent probability that the corresponding mean AWP value in the entire ESI Drug Trend database lies within +/-$1.6 of the sample mean. FIGURE B2 MEAN AWP PERCENT CHANGE FROM 1999 TO 2 BY SEX AND AGE AWP Change Females Males Between 1998 and 1999, the mean AWP per prescription overall rose by 9.6 percent. The increase was larger between 1999 and 2, 12.1 percent. Like the period, between 1999 and 2, increases in cost per prescriptions were slightly larger for females than for males. However, the manner in which the overall cost per prescription increase was manifested in terms of age changed dramatically over compared to Across 1998 and 1999, the most dramatic increases occurred for adults aged 7 and above. Between 1999 and 2, however, the largest increases in cost per prescription were shown for children between the ages of birth and 9, while adults 7 and older showed the smallest increase in per prescription costs. Part of the reason for this pattern of results concerns the relative increase in cost per prescription from 1999 to 2 for the drug classes used by children and older adults. For example, other Drug Trend Report data indicate that the mean AWP per prescription increased 14.8 percent for penicillins, 12 percent for asthma medications, 17 percent for cough/cold drugs, 6.9 percent for antihistamines, 2.2 percent for cephalosporins and 15.1 percent for dermatologicals. These top six classes used by children aged birth to 9 accounted for 68.3 percent of prescriptions for that age group during 2. When weighted by percent of 2 prescriptions, these classes showed an average increase of 11.5 percent. Conversely, cost increases were smaller in the top six classes used by adults 8 and above (6.4 percent for antihypertensives, 4.5 percent for calcium blockers, 9.2 percent for gastrointestinals, 7. percent for beta blockers, 5.4 percent for antihyperlipidemics and 6.3 percent for diuretics). These classes made up 37.4 percent of all 2 prescriptions for members aged 8 and over, and, when weighted by number of 2 prescriptions, increased an average of 6.4 percent. As the above discussion illustrates, differences in drug trend across particular age or gender groupings are reflective of changes in drug classes used by that subgroup. Consequently, policy statements on drug trend should focus more on individual therapy classes as they can often drive the variation in drug trend across subgroups. 132 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 133

87 UTILIZATION OF EACH THERAPY CLASS BY SEX AND AGE This section examines the percentage of prescriptions attributed to members of each sex/age grouping for each therapy class. 11 GASTROINTESTINALS FIGURE B3 GASTROINTESTINALS of Prescriptions Females Males Fifty-six percent of prescriptions for gastrointestinals were filled by females and 44 percent were filled by males. The bulk of prescriptions in this class were filled by members 3-79 of age. The term digestive disorders describes a wide range of conditions that vary in both duration and severity. An estimated 95 million Americans suffer from some kind of digestive disorder, resulting in nearly 1 million hospitalizations and 5 million visits to physicians offices each year and accounting for as much as $17 billion annually in total healthcare costs. 12,13 Gastroesophageal reflux disease (GERD), ulcers and colorectal cancer are responsible for a significant portion of these expenses. Reports suggest that irritable bowel syndrome (IBS) is now the most commonly diagnosed digestive disorder in the United States. Although up to 3 percent of the population may be affected by IBS, treatment options for this disorder remain limited percent confidence interval calculations indicate that for each of the sample percentages (in every therapy class examined), there is a 95 percent probability that the corresponding percentage value in the entire ESI Drug Trend database lies within +/-1.3 percentage point of the sample percentages. 12 National Institute of Diabetes, Digestive, and Kidney Diseases (NIDDK). National Digestive Diseases Information Clearinghouse. Digestive Diseases Statistics. February NIH Publication No American College of Gastroenterology (ACG). Common GI Problems: Volume I 14 Pimentel M., et al. Eradication of Small Intestinal Bacterial Overgrowth Reduces Symptoms of Irritable Bowel Syndrome. Americal Journal of Gastroenterology 2. 95(12): CENTRAL NERVOUS SYSTEM FIGURE B4 ANTIDEPRESSANTS FIGURE B5 ANTIANXIETY AGENTS Over two-thirds of all prescriptions for antidepressants and antianxiety medications were filled by females. Women aged 3-59 accounted for more than half of all antidepressant prescriptions and for 47.3 percent of all prescriptions for antianxiety drugs. Mental illness is now recognized as a significant cause of disability in the United States. More than 2 percent of adults and up to 1 percent of children and adolescents suffer from disorders such as depression, anxiety and 134 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 135 of Prescriptions of Prescriptions Females Males Females Males

88 schizophrenia in a given year. Yet, nearly two-thirds of these individuals fail to receive proper treatment. Some forms of mental illness are surfacing at an earlier age than ever before. 15,16 Unfortunately, the burden of mental illness in terms of personal suffering and lost productivity will increase if these trends continue. CARDIOVASCULAR FIGURE B6 ANTIHYPERTENSIVES of Prescriptions FIGURE B7 CALCIUM BLOCKERS of Prescriptions Females Males Females Males U.S. Public Health Service, Department of Health and Human Services. Report of the Surgeon General s Conference on Children s Mental Health: A National Action Agenda. Washington, DC. 2. ISBN No Accessed March, National Institute of Mental Health (NIMH) Statistics: The Number Count. Mental Disorders in America. September 2. Updated January, Accessed March, FIGURE B8 BETA BLOCKERS The antihypertensive therapy class was one of only a few classes in which males filled more prescriptions than females (56.4 percent versus 43.6 percent). Almost 8 percent of all prescriptions in the antihypertensive class, which includes angiotensin converting enzyme inhibitors (ACEIs), angiotensin receptor blockers (ARBs) and alpha-adrenergic blockers, were filled by members between the ages of The percentage of prescriptions attributable to males and females was approximately equal for two other classes of cardiovascular drugs calcium blockers and beta blockers. Like antihypertensives, these drugs were used primarily by members aged 4 and older. Less than 3 percent of Americans with high blood pressure receive adequate treatment, though, which may explain why the number of deaths due to high blood pressure is increasing. 17 A continuing long-term study funded by the National Heart, Lung, and Blood Institute (NHLBI) is comparing the efficacy of diuretics with ACEIs and calcium blockers for treatment of high blood pressure in patients with co-existing conditions such as high cholesterol or diabetes. An early analysis found the alpha-adrenergic blocker used in this study to be less effective than standard diuretic therapy in preventing adverse cardiovascular events like congestive heart failure, causing this portion of the study to be discontinued early American Heart Association. High Blood Pressure Statistics Accessed March, National Heart, Lung and Blood Institute, National Institutes of Health. NIH News Release. NHLBI Stops Part of Study High Blood Pressure Drug Performs No Better Than Standard Treatment. March 2. Accessed March, EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 137 of Prescriptions Females Males

89 FIGURE B9 ANTIHYPERLIPIDEMICS of Prescriptions Females Males Sixty percent of antihyperlipidemic prescriptions were filled by males. Use of these drugs was minimal among members younger than 4 of age. The benefit of using the cholesterollowering drugs commonly referred to as statins for primary and secondary prevention of heart attacks is well documented. 19 However, a recent study found these agents to be widely misused based on criteria from the National Cholesterol Education Program (NCEP) treatment guidelines. 2 New evidence suggests at least one type of statin can also reduce the risk of Type 2 diabetes and stroke, although additional studies are needed to determine if other drugs in this class provide the same benefit National Cholesterol Education Program. Second Report of the Expert Panel on Detection, Evaluation, and Treatment of High Blood Cholesterol in Adults (Adult Treatment Panel II). September NIH Publication No Abookire SA, et al. Use and Monitoring of Statin Lipid-Lowering Drugs Compared With Guidelines. Arch Intern Med. 21;161: American Heart Association (AHA) News Release. American Heart Association journal report: Pravastatin Reduces Risk Of Diabetes, Stroke. January, Accessed February, INFLAMATION AND PAIN MANAGEMENT FIGURE B1 ANTI-RHEUMATICS FIGURE B11 NARCOTIC ANALGESICS 138 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 139 of Prescriptions of Prescriptions Females Males 1-19 Females Males

90 FIGURE B12 MIGRAINE PRODUCTS of Prescriptions Females Males Females accounted for approximately 6 percent of prescriptions for both anti-rheumatics and narcotic analgesics. Anti-rheumatics, however, were generally used somewhat later in the life span than were narcotic analgesics. Eighty-four percent of prescriptions for migraine drugs were filled by females, with women aged 3-59 accounting for the majority of these prescriptions. Approximately 8 million Americans suffer from chronic pain and the actual count may be as much as 6 percent higher by some estimates. 22,23 Chronic pain, regardless of the source, alters the physical and mental well-being of an individual and may potentially lead to permanent disability. Practice standards like those recently developed by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) for the assessment and management of pain in hospitals and other healthcare settings are an important step toward improving pain management practices. These standards emphasize the need to assess pain in all patients, educate patients about pain and the available treatment options and provide an individualized treatment plan. A number of issues related to end-of-life care are also addressed American Association of Neurological Surgeons, Congress of Neurological Surgeons. Chronic Pain: Frequently Asked Questions The American Occupational Therapy Association, Inc (AOTA). Consumer Fact Sheet. Managing Daily Life When Dealing With Chronic Pain. Accessed March, Joint Commission on Accreditation of Healthcare Organizations (JCAHO). Standards Revisions for 21. Pain Management Standards for Accessed February, RESPIRATORY FIGURE B13 ANTIASTHMATICS Antiasthmatic drugs were one of the therapy classes used frequently by children. Among members younger than 2 of age, males accounted for a larger proportion of antiasthmatic prescriptions than females. Throughout the middle, more antiasthmatic prescriptions were attributable to females. Among members 7 and older, males once again were responsible for the majority of prescriptions in this class. Despite recent advances in the diagnosis and treatment of asthma, prevalence rates continue to rise. Current research focuses on understanding the cause of asthma and identifying a genetic basis for susceptibility in hopes that asthma will one day be preventable. In the meantime, efforts are aimed at increasing awareness of and promoting adherence to established treatment guidelines, improving asthma surveillance and providing increased access to medical care particularly among high-risk populations. 25 FIGURE B14 ANTIHISTIMINES 25 Office of the Assistant Secretary for Planning and Evaluation, Department of Health and Human Services. Action Against Asthma: A Strategic Plan for the Department of Health and Human Services. May 2. Accessed March, EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 141 of Prescriptions of Prescriptions Females Males Females Males

91 FIGURE B15 DECONGESTANTS of Prescriptions FIGURE B16 COUGH/COLD of Prescriptions Females Males 5.1 Females Males The antihistamine, decongestant and cough/cold therapy classes were characterized by relatively high use among young people and greater use by females than males, particularly in the following childhood. The average adult will experience two to four colds per year, and the average child may have as many as eight. Primarily occurring between the months of September and May, cold symptoms including a runny nose, nasal congestion, coughing and sneezing typically last about a week. The numerous varieties of viruses that cause the common cold can make some individuals more susceptible to other, more serious infections involving the lungs, inner ear or nasal passages American Lung Association. What is a Cold? Accessed March ANTI-INFECTIVES FIGURE B17 PENICILLINS FIGURE B18 CEPHALOSPORINS 142 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 143 of Prescriptions of Prescriptions Females Males 6.6 Females Males

92 FIGURE B19 MACROLIDES of Prescriptions Females Males Like those therapy classes used to treat respiratory conditions, the anti-infective classes showed high use by younger members. The percentage of prescriptions filled by males and females was similar within the first two age groups but was relatively greater for females after childhood. Although widespread resistance to antibiotic therapy is quickly becoming a reality, physicians prescribing habits have been slow to change. According to the Centers for Disease Control and Prevention (CDC), nearly 5 percent of the 1 million antibiotic prescriptions written each year in the United States are unnecessary or inappropriate. 27 Bacterial pneumonia, gonorrhea and childhood ear infections have become more difficult to treat as the bacteria that commonly cause these conditions have developed resistance to the drugs that are commonly used to treat them. The financial impact of dealing with antibiotic-resistant infections may be as high as $3 billion annually Assistant Secretary for Legislation (ASL). Department Of Health and Human Services (DHHS). Hearing On Antimicrobial Resistance. Role of NIH in Meeting the Public Health Needs in Antimicrobial Resistance. September 2. Accessed March, National Institute of Allergy and Infectious Diseases (NIAID) Fact Sheet: Antimicrobial Resistance. June 2 Accessed March, WOMEN S HEALTH FIGURE B2 ORAL CONTRACEPTIVES FIGURE B21 ESTROGENS Women of childbearing age accounted for the majority of prescriptions filled for oral contraceptives, while women of menopausal age were responsible for most estrogen use. Premenstrual Syndrome (PMS), which has been associated with fluctuating hormones levels in women, continues to gain recognition as a legitimate health concern. An estimated 5 percent-1 percent of menstruating women suffer from severe physical and emotional symptoms while a much greater number experience lesser degrees of discomfort. In recently released guidelines for the diagnosis and treatment of PMS, the American College of Obstetricians and Gynecologists addresses the use of hormonal therapy and various other treatment options. 29 Reproductive health issues have also received 29 American College of Obstetrics and Gynecology (ACOG). Press Release. ACOG Issues Guidelines On Diagnosis And Treatment Of PMS. March 2. Accessed March, EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 145 of Prescriptions of Prescriptions Females Males Females Males

93 significant attention as the national rate of unintended pregnancies remains near 49 percent. 3 However, decisions concerning the availability of emergency contraception and the non-surgical termination of pregnancy are influenced strongly by social factors as well as by scientific research. Numerous studies have looked at the role of estrogen in preventing heart disease in postmenopausal women. Now evidence suggests a link between sudden heart attacks in younger women and the decrease in estrogen that occurs during a woman s normal menstrual cycle. 31 Given the fact that more women in the United States die from heart disease and stroke than from any other cause, additional studies on the effects of estrogen and the use of hormone replacement therapy are likely. 32 OTHER FIGURE B22 DERMATOLOGICALS of Prescriptions Females Males Dermatologicals were used frequently by members in the second youngest age group. Before age 2 and after age 59, the percentages of males and females using these drugs were similar. Throughout mid-life, however, females were responsible for the majority of dermatological prescriptions. Most Americans will experience some type of skin condition ranging from possibly deadly to relatively minor during their lifetimes. For example, each year in the United States, approximately 1.3 million new cases of skin cancer are diagnosed including about 48, cases of melanoma, a potentially fatal form of skin cancer that has been linked to excessive sun exposure. 33 Far less serious but much more widespread, acne affects nearly all adolescents between 12 and 17 of age, 3 National Center for Chronic Disease Prevention and Health Promotion, Centers for Disease Control and Prevention, Department of Health and Human Services. Chronic Disease Prevention. Women s Reproductive Health. June Accessed February, American Heart Association (AHA) News Release. American Heart Association journal report: Low Estrogen Linked to Heart Attack in Premenopausal Women. Accessed March, American Heart Association (AHA) Biostatistical Fact Sheet - Populations Women and Cardiovascular Diseases. Accessed March, American Academy of Dermatology (AAD) Press Release. American Academy of Dermatology Issues Patient Alert: Misdiagnosis of Skin Cancer Can Be Fatal. April 2. Accessed March, and accounts for more than $1 million in spending for over-the-counter products alone. Forty percent of all acne cases are severe enough to warrant not only a physician s care but also the use of one or more prescription drugs. Acne generally resolves within 5 to 1, although some cases persist well into adulthood. 34 Psoriasis and eczema represent a group of chronic skin conditions that can cause persistent physical discomfort and, in severe cases, may lead to permanent disfigurement. Each affects more than 5 percent of the population and generally requires long-term treatment. Psoriasis accounts for about $3.2 billion in healthcare spending each year and eczema has an equally substantial economic impact. 35,36 FIGURE B23 ANTIDIABETICS Males were responsible for more antidiabetic prescriptions than females overall, although differences were relatively modest between the sexes within each age category. Most prescriptions in this class were dispensed to adults aged 4 through 69. According to the American Association of Clinical Endocrinologists (AACE), more than 6 million Americans are at risk for developing Type 2 diabetes because they are overweight and they already have some degree of insulin resistance. Even more disheartening, the prevalence of Type 2 diabetes is increasing among children. Unfortunately, the risk of experiencing serious medical complications increases with the length of time that diabetes is present. 37 In January, the AACE released updated diabetes treatment guidelines to address the use of new drugs, stress the role of proper nutrition and physical activity and promote intensive diabetes self-management. These guidelines underscore the importance of actively taking control of blood sugar levels by people with diabetes American Academy of Dermatology. AcneNet. Basic Facts about Acne Accessed March, National Psoriasis Foundation (NPS). About Psoriasis FAQs. Accessed February, American Academy of Dermatology. EczemaNet. What is Eczema? 2. Accessed February, American Medical Association. AMA News. Children Now Developing the Type of Diabetes Previously Seen Only in Adults. January Accessed March, American Association of Clinical Endocrinologists Online: Publications. The Press Room. Physicians Warn that Obesity is Driving Type 2 Diabetes Epidemic: New Guidelines Urge 6 Million Americans with Insulin Resistance to Know Their GlucoseAverage. November Accessed March, EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 147 of Prescriptions Females Males

94 FIGURE B24 ANTICANCER of Prescriptions Three out of every four prescriptions for anticancer drugs were filled by females. Individuals in their 4s, 5s and 6s accounted for the majority of prescriptions in this therapy class. Cancer remains one of the leading causes of death in the United States, second only to heart disease. More than 1.2 million new cases of cancer and 55, cancer-related deaths were projected for 2, with costs in excess of $17 billion. The good news is the overall incidence of cancer appears to be declining. Moreover, regular cancer screenings have lead to the early detection and successful treatment of many common types of cancer. As a result, the five-year survival rate for all cancers combined is now at 6 percent an increase of more than 1 percent over the last FIGURE B25 ANTIVIRALS of Prescriptions Females Males 1-19 Females Males U.S. Department of Health and Human Services. Healthy People 21, 2nd ed. Volume I. Understanding and Improving Health: Cancer. November 2. Accessed March, Females aged 2 to 29 accounted for twice as many prescriptions for antivirals as males in the same age range. In other age groups, the proportion of antiviral prescriptions attributable to males and females was similar. Almost 9 percent of prescriptions in this class were filled by members aged Nearly 2 have passed since the AIDS epidemic first began. During this time, advances in AIDS research have lead to the development of drugs and treatment strategies that have greatly prolonged life in many people infected with the human immunodeficiency virus (HIV). Now, more than 32, Americans are living with AIDS. 4 Regrettably, drugresistance is increasing in frequency among newly infected individuals, and concern is growing over the long-term effects of therapy. Guidelines developed in 1998 by an expert panel on the treatment of HIV infection have recently been updated to focus on these important issues. Included in this update are evidence-based recommendations on when to initiate drug therapy based on an individual s immune status and viral load a measure of how much the virus has spread. 41 Pediatric treatment guidelines have also been updated to include the use of new drugs and the prevention of perinatal HIV transmission. 42 FIGURE B26 ANTICONVULSANTS 4 Centers for Disease Control and Prevention. HIV/AIDS Surveillance Report. 2;2(1): The Panel on Clinical Practices for the Treatment of HIV Infection. Guidelines for the Use of Antiretroviral Agents in HIV- Infected Adults and Adolescents. U.S. Department of Health and Human Services (DHHS) and The Henry J. Kaiser Family Foundation. February Accessed March, The Working Group on Antiretroviral Therapy and Medical Management of HIV-Infected Children, National Pediatric and Family HIV Resource Center (NPHRC), Health Resources and Services Administration (HRSA), and the National Institutes of Health (NIH). Guidelines for the Use of Antiretroviral Agents in Pediatric HIV Infection. January 2. Accessed March, EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT 149 of Prescriptions Females Males

95 The largest percentage of anticonvulsant prescriptions was dispensed to middle-aged members, those 3-59 old. Within these age ranges, females accounted for a greater percentage of claims than males. There was little difference between the sexes for the remaining age groups. Ten percent of Americans experience a least one seizure during their lifetime and nearly 3 percent are diagnosed with a seizure disorder such as epilepsy. Seizure disorders account for about $12.5 billion in direct and indirect medical costs. 43 Experts suggest that up to 8 percent of seizure-prone individuals can lead normal, productive lives if properly treated. 44 Unfortunately, many either fail to achieve complete seizure control or experience side effects that significantly reduce their quality of life. FIGURE B27 ANTIFUNGALS of Prescriptions Females Males Most antifungal prescriptions were filled by females, particularly those aged Systemic fungal infections are increasingly more common, especially within the hospital setting. Factors that contribute to the growing prevalence of fungal infections include age, the presence of underlying disease and the widespread use of antimicrobial drugs all of which affect the immune system s ability to function properly. Those most at risk for developing serious or potentially life-threatening fungal infections include organ transplant recipients, newborns and individuals who have cancer or AIDS. 45 To complicate matters, many types of fungi are becoming resistant to treatment with available drugs Centers for Disease Control and Prevention (CDC), National Center for Chronic Disease Prevention and Health Promotion, U.S. Department of Health and Human Services. Chronic Disease Prevention. Epilepsy. January Accessed March World Health Organization. Mental Health And Brain Disorders Accessed March, Powderly WG. Emerging fungi resistant, resilient, and not so rare. Presented at the 38th Annual Meeting of the Infectious Diseases Society of America. September 2. Accessed February, Dismukes WE. Introduction to antifungal drugs. Clinical Infectious Diseases. 2;3: EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT EXPRESS SCRIPTS DRUG TREND REPORT (Please copy and fax or mail back.) Quantity Item Amount 2 Drug Trend Report June 21 ($15 per copy) 1999 Drug Trend Report June 2 ($1 per copy) Subtotal Shipping & Handling (add $3 for each additional copy) $7 MO residents add sales tax Discounts available for volume orders; call for information. PAYMENT Check enclosed payable to Express Scripts, Inc. Money order enclosed Credit card Total MasterCard Account No. Exp. Date / Visa Discover Signature SHIPPING ADDRESS (PLEASE PRINT) Name Organization Shipping Address Telephone TO ORDER: Fax: Mail: Express Scripts Drug Trend Report Express Scripts, Inc. 139 Riverport Drive Maryland Heights, MO 6343 Information: Title Fax 151

96 152 EXPRESS SCRIPTS, INC. 2 DRUG TREND REPORT COST TRENDS IN TABLE OF APPENDIX B APPENDIX A ACTIONS FORECAST EXPENDITURES INTRODUCTION PREFACE CONTENTS NOTES NOTES 153

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