For the first time in 2010, the number of specialty drugs approved by the FDA surpassed that of traditional drugs, kick-starting a trend that we're continuing to see year after year.1 While only a small fraction (approx. 4%) of the patient population uses specialty medications, these costly drugs now account for 25% of total US drug spending and is the fastest growing cost in most employers' health benefits.2 Employers are facing annual trend increases ranging from 18% to 30% due to generic and brand drug inflation and, most notably, to new breakthrough specialty medications.3-4 It is predicted that specialty pharmacy spend will outpace that of traditional pharmacy by 2018 (Figure 1).5 What's more, there is substantial price variation among these drugs based on where the patient receives the medication (Figure 2).
At this stage, specialty pharmaceuticals most commonly address complex conditions such as cancer, respiratory illness, central nervous system disorders and inflammatory conditions such as rheumatoid arthritis and psoriasis. However, this catalog is expected to expand and diversify immensely in the coming years.
Regardless of industry type, employers looking to reduce their overall health care trend must prioritize these costly drugs. Specialty pharmacy is identified as the second top cost driver for 2016 after high-cost claimants.6
Employers can influence their specialty pharmacy trend at the following touch points:
Below are six effective ways employers can drive down prescription drug costs:6
The National Committee on Pharmacy Benefits and Specialty Medicine focuses on ways employers can optimize these, and other strategies for specialty medication management. Members — please visit our Specialty Pharmacy Management Series for an in-depth look at a variety of specialty topics of interest to employers.