Spending on specialty drugs in the United States reached $87 billion in 2012, representing a quarter of all drug spending and 3.1 percent of the entire health care market; and that spending could skyrocket to $400 billion by 2020, according to a policy brief issued earlier this year by the UnitedHealth Center for Health Reform & Modernization.
The U.S. Food and Drug Administration does not have specific guidelines for what constitutes a specialty drug. Instead, specialty drugs are usually so-called because of their costs, which can run from several thousand dollars to upwards of $100,000 per year.
Cost isn’t the only factor, though. Other considerations for specialty drug designation include availability, delivery and handling requirements, and the difficulty involved in making sure patients adhere to a treatment program.
Special handling required
Many specialty drugs require high-tech shipping and handling methods, such as temperature- and humidity-controlled storage facilities. That’s where specialty pharmacies come in. Once a niche industry, specialty pharmacies are increasingly becoming big players across the U.S. health care landscape.
Specialty pharmacies maintain facilities designed to handle specialty drugs used in the treatment of chronic conditions such as multiple sclerosis, rheumatoid arthritis, hepatitis C and Crohn’s disease, among many others. In addition to sophisticated handling requirements for these biologic agents, many of the drugs also come with complicated usage instructions — especially those that need to be injected or infused.
Cost structures a challenge for payers
Many specialty pharmacies have recognized the need to provide comprehensive, skilled medication therapy management programs for patients who require ongoing education and monitoring.
Much of the price tag for a specialty drug represents the drug maker’s research and development costs. Smaller markets for medications to treat complex or rare illnesses often equal higher costs. Today, most health plans have cost sharing structures that place much of the burden on payers, including governments, employers and, often, patients. While the debate continues about whether cost structures discourage the use of specialty drugs or if lower prices would prevent drug makers from developing them, one thing is certain: specialty drugs are here to stay.
If history is a guide, today’s concerns about specialty drugs could become a thing of the past in coming years. As collaborations between specialty pharmacies, hospitals, manufacturers and retailers become more common, expect improved access, lower costs and enhanced care for patients. For those with rare and chronic conditions, that’s news to cheer about.