Growth of Specialty Pharmacy

The use of specialty drugs is growing rapidly in the United States, creating the need for new strategies and methods in paying for these drugs as well as administering them.

This particular class of drugs is called specialty drugs because advanced methods of biotechnology are used to make them. These drugs are generally complicated to make. They are also very expensive, and are used by only a small percentage of the population. Patients taking these drugs require continual medical support, and the administration of these drugs is not easy to manage.

About 10 years ago, the use of these types of drugs was limited mostly to cancer treatment.  These included drugs like Oxaliplatin and Paclitaxel.  Today, their use has grown well beyond that. A decade ago, only a few drugs were classified as specialty drugs. Currently, that number has grown to more than 300.

Research has shown that the growth rate for the use of specialty drugs will be from 14 to 20 percent a year per person in the commercial market.

About 40 percent of the drugs now being developed by pharmaceutical companies are specialty drugs. Pharmaceutical industry figures show that within four years, seven of the top 10 selling drugs in the United States will be specialty drugs.

Costs of these drugs can range from several thousand dollars a year to as much as $100,000 a year for a person taking them. 

Because these drugs are so expensive, making sure patients have access to these drugs is a continual challenge. In 2012, patients spent about $87 billion on specialty drugs, about a quarter of the total spending on drugs. That amount is expected to increase fourfold by 2020, to about $400 billion, which amounts to just more than nine percent of national healthcare spending. About half of the specialty drug spending total is for drugs to combat cancer, rheumatoid arthritis and multiple sclerosis.

In Medicare, almost 40 percent of spending for specialty drugs is for cancer drugs, while medications to treat end-stage renal disease and cardiovascular problems account for another 16 percent of spending. Most of the specialty drugs are used by people in Medicare. Per person, they spend double the amount of people not in Medicare for these kinds of drugs.

Research has also shown that changing payment incentives would reduce the cost of administering specialty drugs, giving incentives for healthcare providers to administer these drugs in physician offices, rather than hospital outpatient areas, reducing the cost by about 30 percent for each member per month.

Better coordination of the kind of care now used by specialty pharmacies has led to better patient outcomes and lower costs. When pharmacies and medical services work together, they have been able to reduce costs for cancer treatment, as well as treatment for multiple sclerosis and rheumatoid arthritis.

Other possible ways of reducing the cost of specialty drugs and improving care include new types of payment models, better information on treatments and outcomes, establishing patient registries, and clinical pathways.

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