Controlling Specialty Drug Costs Is Impossible Unless………….

In 1990 there were only 10 specialty drugs on the market. Now there are more than 300 with nearly 700 more reportedly under development……………………..Managing domestic specialty  drug costs is impossible unless one adopts the Hot Potato Method, likes to visit foreign countries or Uncle Sam steps in…………..

This is an interesting read on Specialty Drugs from Elsevier, an industry leader for drug product and pricing information sent to me this morning by Gerard Gonzalez  (Download the entire White Paper through link below):

“While the term “specialty drugs” has no standard definition, these pharmaceuticals are universally associated with high costs and complex conditions. Unique and highly targeted, such drugs can provide significant improvement or even a cure for individuals with serious diseases.” (NOTE: Medicare defines any drug for which the negotiated price is $670 per month or more, as a specialty drug which is placed in a specialty tier that requires a higher patient cost sharing).

“While their promise can be counted in years and quality of life, their usage is limited by price tags and/or other roadblocks. This is a critical issue for consumers, employers, providers, payers, pharmacies and pharmacy benefit managers (PBMs), all of whom have a stake in managing the costs of specialty drugs.”


The term “specialty drugs” has no standard definition (See Medicare definition above)

☐ In 1990, only 10 specialty drugs were on the market

☐ Now there are more than 300, 33 of which became available in 2015 alone, making up half of all new drugs and biologics approved by the FDA that year. At the end of 2016, nearly 700 specialty drugs reportedly were under development.

☐ By 2018, specialty drugs are expected to reach half of the total drug spend in the United States.

☐ Specialty is the future of the pharmacy industry in terms of revenue.

☐ Competition is fierce as established specialty pharmacies are gaining momentum

☐ Since specialty drugs represent one of the fastest-growing segments of the pharmacy market, many retail pharmacies are developing strategies to take advantage of this revenue stream. These strategies include achieving accreditation to deliver specialty services and mergers and acquisitions

☐ H-E-B earned full accreditation in 2016 to deliver specialty pharmacy services to patients with complex and chronic diseases

☐ PBMs and employer health plans are establishing increasingly narrower networks for limited distribution drugs. (BCBS Offers Specialty Drug Solution)

☐ Payers are increasingly excluding drugs from their formularies (Specialty Drugs, Fiduciary Duties & The Hot Potato Method)

Download the Whitepaper (111.37 kb)