A few highlights that caught my attention:
- Specialty drugs accounted for 9.7% of total pharmacy spending in 2005, up from 8.5% in 2004.
- Specialty drug spending grew by 16.9% in 2005, significantly faster than the 5.4% average trend for drug spending as a whole.
- The rapid growth in specialty drug spending is primarily due to a large increase in utilization. However, unit costs for specialty drugs increased by 6.6% during 2005 vs. a 2.7% increase for prescription drugs as a whole.
- Rheumatoid Arthritis (46.0%)
- Cancer (19.2%)
- Multiple Sclerosis (16.9%)
- Cost (higher)
- Patient population (smaller)
- Handling (more complex)
- Reimbursement (trickier)
- Treatment location (much more diverse)
Today, McKesson is spending heavily to catch up, while Cardinal seems to be moving away from specialty. AmerisourceBergen has been best positioned because of the ION/Oncology Supply relationship and recently reported that specialty distribution is at an $8.5 billion run rate, equal to almost 17% of ABC's non-bulk drug distribution revenues.
I'll comment on what this means for the oncology channel tomorrow.