Up-to-date estimates of healthcare expenditures for US patients with cystic fibrosis (CF) are lacking. Expenditures per patient with CF with enrolled in fee-for-service employer-sponsored insurance (ESI) plans during 2006 averaged $48 098, with a median of $30 508.¹ Rising healthcare expenditures in the United States have been paced by spending on prescription medications, which in 2015 accounted for 17% of aggregate expenditures.² Cost estimates used in economic evaluations of CF therapies should reflect up-to-date clinical practices.

Much pharmaceutical spending is on specialty drugs, defined in the US context as medications costing at least $1000 per prescription or per month.³ Specialty drugs include orphan drugs that target rare diseases such as CF, which affects about 35 000 people in the United States.⁴ Specialty drugs for CF include pulmonary medications that treat chronic infection, airway mucus obstruction, and inflammation, and pancreatic enzyme products to treat malabsorption. Until recently, pancreatic enzymes as nutritional supplements were unregulated in the United States. After the U.S. Food and Drug Administration (FDA) began to require approval of marketing of pancreatic enzyme products on the basis of evidence of clinical efficacy and safety, FDA approved six pancreatic enzyme products for CF during 2009–2012.⁵

CF has become a model system for precision medicine, which includes medications targeted to specific protein defects associated with individual mutations or genotypes.⁶ In particular, new genome-specific biologic medications, namely cystic fibrosis transmembrane conductance regulator (CFTR) modulator therapies that target defects in the CFTR protein caused by specific mutations in the CFTR gene, have been introduced. Ivacaftor (Kalydeco™) was first approved by FDA in January 2012 for patients aged ≥6 years with a G551D CFTR mutation, about 4–5% of CF patients.^7,8 FDA subsequently expanded its approved use to include nine additional mutations (February 2014), patients ≥2 years old (March 2015) and, most recently, an additional 23 mutations (May 2017).⁹ Uptake of ivacaftor use following FDA approval was rapid, with roughly 80% of eligible patients initiating use in the first year.¹⁰ A combination drug, lumacaftor/ivacaftor (Orkambi™) was approved in July 2015 for patients aged ≥12 years with the most common CFTR genotype (delF508 homozygous),¹¹ and the indication was expanded in 2016 to children aged 6–11 years. These two approved CFTR medications are an order of magnitude more expensive than other CF specialty drugs.¹¹ No studies have reported the contribution of spending on these products to overall expenditures for insured patients with CF, although one modeling study was published in 2016.¹² In this study, we describe current trends in health care expenditures for commercially insured patients with CF in the US.

Reported per-patient mean expenditures for privately-insured patients with CF enrolled in non-capitated employer-sponsored plans in the United States almost doubled in inflation-adjusted dollars during the study years, from $67 127 in 2010 to $130 879 in 2016. The comparable figure for 2006 per-person mean expenditures 1 in 2016 dollars adjusted for general price inflation was $56 252. Growth in median expenditures was similarly rapid, from $35 515 in 2010 to $67 760 in 2016. The mean expenditure for the patient population is appropriate for assessing aggregate expenditures, whereas the median is useful for characterizing costs for typical patients.¹

The remarkably rapid growth in per-person expenditures in recent years for the privately insured US population living with CF calls into question the continued use of published cost estimates derived from time periods when new therapies were either unavailable or were less commonly used. Simply adjusting estimates from previous years for inflation is not sufficient; current treatment costs for this population requires up-to-date real-world data on expenditures. The present study only applies to the privately insured population with ESI enrolled in non-capitated plans, who comprise about 85% of the MarketScan Commercial sample. The key limitation of the study is that it would not be valid to extrapolate from trends in expenditures for privately insured patients with CF to healthcare costs for the overall population with CF. Since public payer reimbursements are substantially lower,¹⁶ a similar analysis of healthcare expenditures for publicly insured patients with CF would also provide important information.

Most of the increase in per-person expenditures for privately insured patients with CF since 2010 was accounted for by increased spending on CF-specific specialty drugs (CFTR modulators, pulmonary medications, and pancreatic enzyme products). Excluding such products, inpatient and outpatient spending rose by 1–2% per year, respectively, relative to inflation. Pharmaceutical spending rose from one-third of all spending on CF care during 2006¹ and 36% in 2010 to 64% in 2016. In particular, the CFTR modulators, although taken by a subset of patients, dominated overall growth in spending after 2014. During 2016, CFTR modulators were taken by almost one-fourth of privately insured patients with CF and accounted for over one-half of all reported drug spending for the CF patient population with ESI. More than one-half of all growth between 2010 and 2016 in inflation-adjusted spending for privately insured patients with CF was accounted for by spending on CFTR modulators.

The role of specialty drugs as cost drivers in overall healthcare spending has attracted growing attention from stakeholders including insurers, self-insured employers, pharmacy benefit managers, and public policymakers.^3,17 In 2015, specialty drugs accounted for almost 40% of drug spending in the United States, and is expected to reach 50% by 2018.¹⁷ The increase in spending has ramifications for insurance benefit design, drug formularies, and coverage criteria. The high cost of treatments could also increase out-of-pocket spending for patients, which have implications for adherence to therapies and treatment decision-making.

Despite the notable increase in specialty drug spending for people with CF, it is important to consider the improvements in health outcomes that occurred during this period. Life expectancy continues to rise with the introduction of new therapies and advances in care delivery. Over the past decade, the CF Foundation has issued peer-reviewed, evidence-based guidelines for chronic respiratory medications that support early use of CF-specific specialty medications.¹⁸ Long-term use of specialty drugs, such as inhaled tobramycin and dornase alfa, has been linked to decreased mortality.¹⁹ In addition, CF care centers adopting more aggressive monitoring in their patient populations have been shown to have better overall health outcomes.²⁰ Over this period, therefore, treatment complexity in CF has increased in both pediatric and adult patient populations.²¹ Notably, a recent registry-based comparison of CF health outcomes found that children and young adults in the United States had better lung function than those in the United Kingdom, and that specialty drugs, such as dornase alfa, were much more commonly prescribed in the United States.²² All of these factors that have improved health likely also contributed to the rise in pharmaceutical expenditures observed in this analysis.

Breakthrough drugs, such as ivacaftor, represent both the greatest promise for dramatic improvement in CF health outcomes and the largest impact on healthcare spending. Both ivacaftor and lumacaftor/ivacaftor have proven efficacy in clinical trials, although the magnitude of clinical benefit in eligible populations in terms of improved lung function is greater for ivacaftor monotherapy than for lumacaftor/ivacaftor.^8,23 Effectiveness studies using real-world patient registry data have shown sustained benefits of ivacaftor in terms of slowing disease progression and improving nutritional status.²⁴ An analysis of MarketScan claims data found a two-thirds reduction in inpatient admissions with a CF diagnosis among patients who initiated ivacaftor therapy during 2012.²⁵

Currently up to one-half of the CF population is eligible for ivacaftor or lumacaftor/ivacaftor. Additional modulators are in clinical development and, if they are found to be efficacious, will be made available to patients with a broader array of genotypes. The long-term impact of the therapies—physiological, healthcare use, survival, and health-related quality of life—is still unknown. Ongoing evaluation of these therapies is needed to ensure that increased spending on them is associated with optimal outcomes (i.e., the value proposition).

Researchers are expected to provide information on costs and outcomes to payers and other stakeholders so that decision makers can determine which clinical services provide good value.²⁶ The UK National Health Service (NHS) in 2012 commissioned a health technology assessment of ivacaftor.²⁷ The incremental cost-effectiveness ratio (ICER) was calculated to be 10–15 times higher than the threshold range used, but within the range of other “ultra-orphan” medicines covered by the NHS.²⁸ On that basis, ivacaftor was approved for coverage.

Like any study using administrative healthcare data, this study has limitations.²⁹ One is the restriction to a convenience sample of private insurance plans sponsored by employers. The MarketScan Commercial data have been found to be comparable in demographics to the US population with ESI,³⁰ which in turn comprises >90% of the US population with private insurance.³¹ It has been reported that 56% of a representative US sample of children with CF had private insurance.³² MarketScan claims data have previously been analyzed for information on expenditures for privately-insured patients with CF.^1,13 The study findings, however, cannot be extrapolated to people with private plans that do not include prescription drugs.

A second limitation is the use of ICD diagnosis codes to identify persons with CF, since ICD codes are subject to multiple types of errors.³³ Consequently, some people without CF might have been incorrectly coded as having CF. An algorithm of ≥2 outpatient claims on separate dates or ≥1 inpatient claim is commonly used in health services research to minimize coding errors.^34,35 Conversely, some insured persons with CF who were mildly affected and had few CF-specific care episodes might not have met the case algorithm. On the other hand, the administrative prevalence of CF in the pediatric population in this study is consistent with the estimated birth prevalence of CF in the United States.⁴ A medical record review of children with billing codes for conditions at high risk of influenza (eg, asthma) found a sensitivity of 72% and specificity of 95%; the one case of CF was correctly coded.³⁶

Third, and most seriously, information on health care use and expenditures is incomplete. For example, if patients obtain drugs through coupons from manufacturers and do not file a claim for reimbursement we have no record of those prescriptions. Most critically, rebates that health plans and pharmacy benefit managers receive from drug manufacturers at the end of the year can result in overstatement of net expenditures on drugs reported in payments recorded to pharmacies.^29,37 Overall, net revenues of manufacturers after rebates and discounts in 2016 were 28.2% less than gross revenues.^37,38 Not only do private plan expenditures on prescription medications appear overstated using administrative claims data, but the overstatement may be growing over time. From 2015 to 2016, aggregate national spending on medications calculated using invoice prices rose by 5.8% but after taking into account manufacturer rebates and other discounts it rose by just 4.8%.³⁸

We did not censor patients who received lung transplants. In 2016, 2% of continuously enrolled patients (n = 58) had received a lung transplant at some point during 2010–2016. Their mean and median expenditures during 2016 were $667 012 and $515 750, respectively. Excluding those patients reduced mean expenditures for the remaining patients by 5%.

Rapid growth in private expenditures for CF in recent years appears to be largely due to increases in specialty drug spending, particularly as new high-priced precision medicine therapies are being introduced. Expenditures on the treatment of CF in the United States, as assessed through administrative private insurance claims, is increasingly dominated by specialty drugs. Ongoing evaluation of the benefits of existing and new therapies, as well as how they affect overall healthcare use, is needed to ensure patients receive high-quality, high-value care. A challenge for researchers, though, is a lack of accurate information as to how much payers are actually spending on CF medications after taking into account discounts and rebates.