The Rise of Specialty Spend

October 26, 2019
Kayt Sukel
Kayt Sukel

How can payers appropriately plan and manage benefit coverage with so many expensive specialty drugs coming down the pipeline?

The numbers are astonishing.

Specialty medications-or drugs classified as high cost, high complexity, and/or high touch for patients with limited therapeutic options-only make up approximately 1% to 2% of prescriptions currently written in the United States. Yet, they account for nearly half of total drug spend. With new, and increasingly more expensive, specialty drugs coming on to the market, payers are struggling to figure out how to pay for these medications, especially as they tend to represent treatments for medical conditions where no other viable options exist.

Susan Trieu, PharmD, director of Enterprise Specialty Clinical Solutions for MedImpact Healthcare Systems, Inc., says the impact specialty drugs currently have both on the pharmacy benefit, as well as the medical benefit, are “astronomical.”

“You are really looking at a small number of patients and, by extension, a small number of claims that are going through that dictate spend from a healthcare utilization perspective,” she says. “When you go back a few years and think about the advent of hepatitis C drugs and what happened when they hit the market, I don’t think we were prepared for agents that could ramp up specialty spend so quickly. Before that, specialty spend was fairly predictable. Now there are more and more drugs increasing specialty spend – and it’s really rocked the healthcare industry as we try to control for that and underwrite it.”

Trieu joined Jann Rigell, RPh, MBA, Enterprise Specialty Programs Principal at MedImpact Direct, at the Academy of Managed Care Pharmacy (AMCP) Nexus event, to be held October 29-November 1, 2019, in National Harbor, Maryland to discuss the larger trends driving specialty spend in their session, “Fast and Furious: What is Driving the Specialty Spend?” The session was held on October 30, 2019 from 3:00 p.m. to 4:30 p.m.

Trieu highlighted that 59 specialty drugs were approved in 2018, many of them quite pricey. And she says, as innovation continues to expand in the drug market, we will likely see more. 

Related: How Payers are Responding to Growing Orphan Drug Costs

“Payers are struggling with what to do with this specialty spend,” she says. “They want to know if they can predict what’s going to happen, if they can manage it when it does-if that’s even possible. With great innovation comes great worry about the ability to pay for these new medications that won’t just affect your organization’s bottom line next year, but in the following years, too.”

So how are payers and specialty pharmacy organizations to prepare for all this innovation?  Trieu says her objective for the AMCP Nexus presentation is to help attendees first recognize what the specialty drugs are but also understand how they compare to what’s currently available in the market.

“You can’t look at just one drug in a silo and say, ‘Oh, this is a very expensive drug, never mind.’ You have to look at what else is available in that treatment area and make your evaluations and decisions on that type of information to ultimately make your budgetary predictions,” she says. “It’s a pipeline discussion and a trend and spend discussion-but it’s also looking at what tools and strategies you can use to evaluable specialty spend across both the medical and pharmacy benefit.”

She adds that having the right data on hand can help drive more informed decision-making. While it’s easy to have sticker shock in looking at a single drug, healthcare organizations should look at spend across the short and long term.

“Not all specialty disease states are the same,” she says. “You may have a very small population with, say, spinal muscular atrophy, but a large one with rheumatoid arthritis, which is leading the charge in specialty drug development in the autoimmune space. You may not always have the clear-cut comparison data you need and want to build models, but there is information on the study, the study population, and competitors that those specialty drugs may have. You can also look at who would likely use the specialty drug? There are a lot of moving parts to these decisions.”

Trieu says taking this kind of holistic approach to evaluating specialty spend, from the beginning to pipeline utilization management to review of agents, is the key to success. 

“That’s what it takes to make sure your management is consistent both across the pharmacy and medical benefit,” she says. “You really do need an integrated view of your entire specialty spend.”

Kayt Sukel is a science and health writer based outside Houston.