The cost of specialty drugs, injectable or tablet form used to treat complex medical conditions, is growing at an annual rate of over 20 percent. At current utilization rates, the cost of new and existing specialty drugs is predicted to total 40 percent of the cost of providing pharmacy benefits to employees and their dependents by 2016. These statistics are a composite of data from ESI, Caremark, Optum, and Medco reports.
In addition to market factors driving overall cost increases, the absence of generic substitutes and brand-name competition gives drug manufacturers near-monopoly pricing power and makes conventional benefit design and utilization management less effective than when applied to traditional brands and generics.
As plan sponsors explore options to better manage the cost of specialty drugs as part of employee health benefits, beware of nuances that only health care professionals are apt to understand.
Continue reading “Containing Future Drug Spend Hinges on One Word: Specialty”
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