Costly drugs to weigh on U.S. employers' expenses in
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[September 18, 2017]
By Divya Grover
(Reuters) - U.S. employers are bracing for
higher health care expenses in 2018 as spending on new drugs to treat
diseases such as cancer, multiple sclerosis and hepatitis C is expected
to rise more than 7 percent, according to consultancy firm Mercer.
Between 40 and 50 new specialty drugs are set to hit the market each
year in the next five years, which could increase costs by $25 billion
annually, Mercer said.
The survey's preliminary findings suggest that spending on specialty
drugs had risen by about 15 percent compared with prices that were
factored into 2017 health plans. These types of drugs continue to push
up overall costs of prescription drugs.
"It's not so much that the cost of any one drug is going up, but that
new drugs are being introduced," Beth Umland, Mercer's research director
for health and benefits, told Reuters.
There are presently 2,320 drugs in active development, the consultancy
Last month, Novartis AG <NOVN.S> won U.S. approval for the first of a
new type of potent gene-modifying immunotherapy for leukemia, a $475,000
treatment that marks the start of a potential new treatment paradigm for
"With so many new specialty drugs in the pipeline and few well-known
brand-name drugs going off-patent in the near future, the drug cost
problem will certainly get worse before it gets better," Mercer's U.S.
health reform leader Tracy Watts said.
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A person holds pharmaceutical tablets and capsules in this picture
illustration taken in Ljubljana September 18, 2013. REUTERS/Srdjan
Companies anticipate average per-employee health costs to increase by 4.3
percent in 2018, the highest rate since 2011.
Early responses from the survey suggest that 46 percent of employers would take
steps to cut costs with new strategies such as high-deductible health plans -
which shift the burden of initial medical costs to patients, but have lower
These plans are becoming increasingly popular among employers as they try to
keep a lid on medical costs. However, this trend has contributed to higher
out-of-pocket spending on healthcare for employees.
The average per-employee cost growth is estimated to rise 6 percent, if
companies make no changes to their medical plans, according to the survey.
(Reporting by Divya Grover in Bengaluru; Editing by Martina D'Couto)
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