The California Department of Insurance (CDI) issued its first Prescription Drug Cost Transparency Report as required by Senate Bill 17 (Hernandez).

This year is the first year insurance companies must report prescription drug data to the department pursuant to CIC § 10123.205. The department received filings from all insurers required to report prescription drug data.

The report compiles information submitted by nine health insurers in California about covered prescription drugs, including prescription drugs dispensed at a plan pharmacy, network pharmacy, or mail order pharmacy for outpatient use, and include the following drug categories: generic, brand name, and specialty.

CDI-regulated insurers reported to the department the 25 most frequently prescribed drugs, the 25 most costly drugs by total annual plan spending, and the 25 drugs with the highest year-over-year increase in total annual plan spending for calendar year 2017 for individual and group coverage.

This mandated reporting by insurers is meant to demonstrate the overall impact of drug costs on health insurance premiums in California.

“Our Prescription Drug Cost Transparency Report is an important first step toward providing more information for consumers and policymakers regarding the cost of drugs,” said Commissioner Jones.

For the 2017 calendar experience year, total combined annual prescription drug spending (insurer payment plus member cost-share) was more than $1.2 billion.

Generic drugs comprise 84 percent of prescriptions and 21 percent of spending, while specialty drugs comprised only 3 percent of prescriptions, but 52 percent of spending.

The cost of prescription drugs (after considering rebates) is 13.4 percent of premiums.

The 25 most costly specialty drugs alone accounted for more than a quarter of the total annual spend for all drugs.