October 22, 2019

Top 10 Trends in Specialty Pharmacy

By Davy James, Associate Editor
Published Online: Friday, Oct 24, 2014

All Eyes Are on the Specialty Marketplace
Spurred by health care reform, the rise of specialty drugs continued in 2014 in an ascendance that is projected to account for nearly half of all pharmacy spending within the next 2 years.1

The anticipated exponential growth in pharmacy spending will occur as a result of the combined impact of the Affordable Care Act (ACA) and a robust drug pipeline. Additionally, technological advances and a growing demand for specialty therapies are expected to drive specialty medications to account for approximately 40% of all pharmacy spending by 2016.1

Spending on prescription drugs is estimated to increase in the retail space by $227 billion between 2010 and 2020, as the average cost of a specialty prescription grew 17%, to $2860, last year as a result of increased utilization and more expensive products.1 The factor playing the largest role in the anticipated spending growth is the increased use of prescription drugs by 32 million people projected to be newly insured by 2019; these individuals will be armed with more generous benefits that limit out-of-pocket spending.1

Manufacturers have subsequently responded to the growing demand for specialty medications, which currently comprise more than 50% of the pharmaceutical pipeline. In 2013, specialty products accounted for 15 of the 27 novel new drugs approved by the FDA.1

The FDA also granted more than 30 breakthrough therapy designations in 2013, including 12 in oncology, 4 in hepatitis C, 2 in autoimmune disorders, and several single designations for rare diseases.2 Additionally, 10 new oncology drugs were launched last year, which was the highest number of single-year drug approvals for cancer in the past decade.2

The following explores 10 major trends in specialty pharmacy as a new era of health care focuses the attention of all players—patients, payers, physicians, and manufacturers—squarely on the specialty marketplace.

1. The Cost of Specialty Drugs Is Skyrocketing
The cost of specialty medications has achieved what some call “unsustainable growth,” with a wide-ranging impact on patients and providers alike.

Total spending on prescription medications rose by 3.2% to $329.2 billion in 2013, with the increase attributed to several factors, including the high cost of new specialty drugs, as the use of health care services by consumers increased for the first time in 3 years.2

Catamaran Corporation reported that, in 2013, specialty medications accounted for 23.5% of total drug spending by only 2.1% of patients.3 The average cost of a specialty prescription in 2013 was nearly $2900, which represents a 17% increase from the previous year.3

As a result of this growth, patients on specialty drugs bear a much larger burden from out-of-pocket costs than other patients, as 30% of consumer drug spending last year came from just 2.3% of all prescriptions.Additionally, spending on new specialty

About the Specialty Pharmacy Times Industry Guide

The Specialty Pharmacy Times Industry Guide includes comprehensive editorial content relative to all specialty pharmacy stakeholders. Content includes information relative to market trends, commercialization, distribution, order to cash, HUB Services, managed care strategies and DIR fees. The guide also includes profiles, and a complete list of stakeholders along the patient journey: specialty pharmacies, wholesaler distributors, manufacturers, support services, group purchasing, and trade associations.

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