Kay reviews specialty drug pricing and discusses strategies to manage spending on these therapies. For more, download Managing the Costs of Specialty Drugs, a free whitepaper from Elsevier.
Read on for Kay’s insights.
Trends and Challenges in Specialty Drugs
By Kay Morgan, V.P. of Drug Products & Industry Standards and Clinical Solutions, Elsevier
But this is real life, and real resolutions must be achieved to benefit from the tremendous potential of specialty drugs. Health plans and industry stakeholders must develop strategies to manage rising specialty drug prices while ensuring access to critically important drugs.
Drawing on advancements in biotechnology, specialty drugs work at the cellular level to offer the most effective, or sometimes only, treatment for complex and/or chronic conditions and illnesses that heretofore had few options. With the ability to sometimes make the difference between life and death, they are highly prized – and priced.
Thus, competition to distribute these drugs remains fierce, as established specialty pharmacies gain ground, community pharmacies find openings, payers establish adherence programs and control formularies, and retail and drug chains are staking claims in this lucrative territory.
SHAPING THE FUTURE
Specialty pharmaceuticals continue to grow both in number and percentage of drugs dispensed, a surge not expected to abate in the near future. Statistics show that about 30 percent of drugs sold in the United States today are specialty pharmaceuticals, with industry experts expecting that figure to reach 50 percent within the next three years. That prediction is based on the fact that nearly 700 new specialty drugs reportedly were under development by the end of 2016.
Also on the upswing are specialty pharmacies. These organizations help to meet the challenges of storage and administration (i.e., injection or infusion) of these drugs; management of what can be more serious and frequent side effects; and aggressive outreach, monitoring and patient education to promote adherence.
As noted by McKesson, there are a variety of significant trends fueling growth and investment in the niche of specialty pharmacy. These trends include the escalating interest in “precision” medicine—which takes into account individual variability in genes, among other factors—and the sheer numbers of new patients in the care pipeline, some of whom may have more than one condition that requires a specialty drug.
McKesson also points to established FDA incentives to encourage drug manufacturers to find treatments for rare genetic diseases. (This “Fast-Track” designation recently gained even more muscle with passage of the 21st Century Cures Act, which not only eased regulatory processes for affected drugs and medical devices, but also earmarked billions in new funding for research into areas such as cancer and Alzheimer’s.)
Finally, we come to prices. Not only are these drugs high dollar, some potentially reaching six figures in costs annually, but they are used by patients that reports show can have up to 11 additional prescriptions, making them valuable customers, indeed.
CONTROLLING THE COSTS
In a recent Elsevier white paper, we took a hard look at exploring ways the industry as a whole can manage the cost of specialty drugs.
Manufacturers spend vast amounts of money on R&D and justify costs by that investment. Patients can’t take medicine they can’t afford to buy, causing them to reduce, stop or never start taking what could be life-saving therapy. And everyone in between has to maintain viability and wants equity.
Avenues being explored for controlling costs include:
- Changes in adjudication coding to provide the level of detail necessary for a clear picture of what is being used and how.
- Resolution of the definition of a “specialty drug” during payer/pharmacy benefit manager contracting and negotiation to assure clarity and transparency into drug pricing and rebates.
- Utilization management, such as step therapy, in which less expensive, alternative therapies are tried first; prior authorization; quantity limits; and partial fills.
- Building on advances in adherence programs to ensure the value of therapy is being optimized at the lowest possible cost.
Specialty drugs have their own unique set of challenges. While grappling with the expense of specialty pharmaceuticals, stakeholders must focus ways to manage costs along with programs that impact the health and quality of life of the patient in treating the complex nature of the disease with complicated drug regimens.
Find out more in our white paper: Managing the Costs of Specialty Drugs.
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