American employers are looking out for higher health care expenses next year as spending on new drugs to treat diseases such as cancer, hepatitis C, and multiple sclerosis is expected to jump more than 7%. In the next five years, 40 to 50 specialty drugs are expected to hit the market which could increase costs by $25 billion annually. Spending on specialty drugs have definitely risen by about 15% compared with the prices that were factored into this year’s health plans. These type of drugs continue to push up overall costs of prescription drugs. Many new drugs are being introduced and right now there are 2,320 drugs in active development.
Last month, Novartis AG got U.S. approval for the first of a new type of potent gene modifying immunotherapy for leukemia. This treatment costs about $475,000 which marks the start of a potential new treatment ideas for some cancers.
Average per employee health costs are expected to rise by 4.3% next year which is the highest rate since 2011. 46% of employers would actually try to cut costs with new strategies such as high deductible health plans that will shift the burden of initial medical costs to patients but will also have lower monthly premiums. The average per employee growth is expected to increase by 6% if companies make no changes to their medical plans.