U.S Specialty Drug Spending to Rise 67% by 2015
US spending on specialty drugs – drugs aimed at chronic, complex diseases such as cancer, multiple sclerosis (MS) and rheumatoid arthritis (RA) – will increase by 67% by the end of 2015, according to new forecasts.
The report, from Pharmacy Benefit Manager (PBM) Express Scripts, found that spending on specialty medications had increased by almost 20% in the last year alone. This is despite an IMS report showing that last year overall U.S drug spending figures dropped for the first time.
CFO of Express Scripts Jeffrey L. Hall attributed the growth in spending to new specialty drug launches, increased use of specialty drugs overall and inflation. He added that "If that wasn't enough, there are ... anywhere between 600 and 1,000 [specialty] drugs in the pipeline." By the end of 2015, the company forecasts that cancer, MS and RA will each count for more of drug spending than any other therapy class in the U.S, apart from diabetes. Overall, U.S spending on traditional prescription drugs (such as those used to treat high blood pressure or depression) will decline by 4% by the end of 2015; only two of the top ten traditional therapy classes, diabetes and attention disorders, are predicted to rise. In 2011, diabetes became the costliest therapy class in the U.S and new predictions foresee it staying in the top spot until at least 2015. Hep C spending, thanks to new screening guidelines being introduced and new therapies set to emerge next year, is forecast to grow by a massive 465.8%.
Companies are busy augmenting their portfolios of specialty drugs through M&As, and by focusing R&D on more expensive drugs that are tailored towards smaller sections of the patient population. It is easy to see why – primary care meds are easier to copy and therefore more likely to face generic competition, while they also need larger clinical trials in order to gain approval. Specialty meds are more likely to qualify for FDA incentives such as accelerated development timelines and can reach the market on the back of much smaller trials, often commanding a higher price. Dr Glen Stettin, senior vice president for clinical, research and new solutions at Express Scripts, remarked that "new specialty treatments are making a real difference in the lives of patients, but the very high cost of these drugs creates difficult decisions for plan sponsors on which medicines to cover."
The report points out that specialty medicines require special handling, distribution and administration as they are often delivered through an injection or infusion. Hall’s company is looking to benefit from the growth of specialty drugs through its highly specialized Accredo unit. The unit offers services such as licensed pharmacists and nurses on call 24/7 to help patients with their medication, and reminder calls to help patients remember when they need to re-order medication. This focus on adherence also benefits the PBM’s clients, who save money by avoiding patient hospital visits further down the line. However, the PBM is not only contributing to the growth of the market for specialty-drugs, it is also involved in driving down spending in this area. Employers who push all specialty drug prescriptions through Accredo can cut their specialty drug spending in half, due to programs such as prior authorization and step therapy.