Cost-Conscious Payers Are Eyeing Higher Prices on Diabetes Drugs

With diabetes costs taking double-digit increases--and expensive newer meds launching--insurers are tightening restrictions on drug use.

A time-honored technique for boosting drug sales is simple: Raise prices. Lately, plenty of drugmakers pressed by patent-cliff losses have done just that. But some notable price hikes on diabetes drugs may be backfiring with payers. With diabetes costs taking double-digit increases--and expensive newer meds launching--insurers are tightening restrictions on drug use.

Of course, the growing diabetes epidemic has helped push expenses upward. But price increases on drugs and devices are fueling the rise, too, AIS Health reports. Spending on diabetes meds grew by 10.4% last year, mainly because of an 11% hike in drug prices. In fact, the diabetes category accounts for the biggest expense growth of any traditional drug class, a Prime Therapeutics report states.

BlueCross BlueShield of Tennessee tells AIS Health that on a per-member basis, its diabetes treatment costs have grown by 33% from the first quarter of 2013 to the first quarter of 2014. Tops on its radar are price hikes on insulin drugs, notably Sanofi's ($SNY) Lantus, but the plan is seeing price increases on non-insulin brands, too. Even the prices on generics are going up, some payers say.

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Source: Fierce Pharma