Specialty Drugs Have Consequences
During the interview process Joe Sixpack learns the position pays $35,000 plus benefits. Little does the employer or Joe know the true cost was going to end up being $650,000…..the equivalent of 18 jobs………..so to keep from bankruptcy the employer must reduce his workforce by 18 (hopefully non-essential) employees and freeze wages for everyone else ………….or move his manufacturing business to China and his $685,000 per year employee to unemployment.
The report highlights that the average annual retail cost of specialty drugs has quintupled between 2006 and 2020 with payers purportedly spending 75x more to cover a specialty drug patient than a non-specialty patient……………..
AMS 2021 Specialty Drug Trends Report Highlights Lack of Transparency
MyHealthGuide Source: AMS, 7/11/2022
Lynnfield, MA – AMS, a healthcare IT company that provides clinical insights and financial analysis of the costliest and most complex medical claims, released their 2021 Specialty Drug Trends Report, highlighting payers need for payment intelligence to effectively manage health plans.
The report highlights that the average annual retail cost of specialty drugs has quintupled between 2006 and 2020 with payers purportedly spending 75x more to cover a specialty drug patient than a non-specialty patient. Between the years of 2017 and 2021 patented drugs in the U.S rose by 18% per year while seeing annual decreases from 2% – 9% in other large pharmaceutical markets such as Japan, Germany, Australia, Spain and France.
The report also reveals that the increasing cost of specialty drugs is not the only driving force behind overspending on high-cost claims, but the lack of clinical insight into high-cost and complex diagnoses. Many complex claims contain inappropriate treatment plans, inaccurate dosage regimens and overcharges that go unnoticed with most cost-containment strategies.
Highlights of the report
- The projected specialty drug price inflation rate is 3.37%
- 75% of the ~7,000 prescription drugs in development are specialty drugs
- Fewer than 2% of the U.S. population account for about 55% of total pharmacy spend
- 44% of drugs authorized through the FDA’s accelerated approval pathway have not been clinically proven
The comprehensive report contains a review of 2021 specialty pharma spend, categorized costs (adult/pediatric and orphan), notable FDA approvals, and the most searched drugs and diagnoses via the company’s PredictRx and PredictDx modules. Also included is a downloadable PDF of 2021 FDA drug approvals added to PredictRx which incorporates pertinent clinical information and AMS Cost Projection (ACP) pricing.
“In reviewing our data, it’s abundantly clear that payers, cost-containment organizations and medical management companies are not equipped to uncover both the financial and clinical drivers of complex, high cost claims.”, states Dr. Stacy Borans, AMS Founder and Chief Medical Officer. “These cost drivers go hand-in hand to unnecessarily inflate the overall cost of treatment for patients being treated with specialty drugs.”
Additionally, the report discusses a variety of challenges that the FDA encountered in 2021, including the coronavirus pandemic, an investigation headed by the U.S. Health Department’s inspector and the withdrawal of 216 abbreviated new drug applications.
Information and analytics for the report were derived primarily from two of several modules housed on AMS’ AI driven Predict Platform: PredictRx (clinical and cost resource for specialty drugs) and FACS (payment intelligence and clinical integrity).
Request a copy of the 2021 Specialty Drug Trends Report here.
AMS’ AI-powered Predict Platform is the industry’s first cloud-based enterprise software for healthcare affordability. Focused solely on the most expensive and complex claims, AMS forensically identifies, financially analyzes, clinically evaluates, and methodically predicts claims for the 5% of members responsible for 50% total medical spend. We believe that “Knowledge is Power”. Visit www.mdstrat.com.