Emerging trends in the specialty drug market
By Kim Bergstrom, Pharm.D., Chief Clinical Officer, McKesson Corporate Strategy and Business Development
As the specialty drug market continues to evolve and grow, it is important to understand the opportunities and challenges that lie ahead for your hospital or health system. Having the right resources and infrastructure in place can help you demonstrate value to payers and manufacturers, but more importantly, allow you to offer patients the life-saving medications that they need.
What is driving the growth in the specialty drug market?
According to IMS Health, the specialty drug market grew by nearly 27% in 2014.1 Hepatitis C, cancer and multiple sclerosis classes of specialty drugs led with the highest total dollar of sales.1 By 2018, specialty drugs are expected to make up 50% of overall drug costs.2
Below is an overview of some of the key factors and emerging trends that are fueling the growth of this niche market.
- Personalized medicine — Growing interest in personalized or “precision” medicine, which is tailored to a person’s genomic makeup to help predict, diagnose and treat diseases is leading to new investments in this segment.3
- More insured patients — Health reform, including the expansion of Medicaid, has given more patients access to healthcare than ever before. In addition, some of these newly insured specialty pharmacy patients often battle more than one chronic disease, requiring them to take multiple medications.
- Government incentives — For decades, the FDA has offered incentives — such as fewer barriers to approval and extended patent protections for orphan drugs — to encourage pharmaceutical manufacturers to find treatments for rare genetic diseases. And recently, the FDA developed breakthrough therapy and fast track designation programs to help speed up the development of drugs to treat what are considered serious or life-threatening conditions.4
- Price — A lack of generic alternatives, along with the high cost to research and develop these breakthrough drugs, often plays into their $6,000–$750,000-a-year price tag.5 Special handling, clinical support, and risk evaluation and mitigation strategy (REMS) programs also impact the steep price for these drugs. Recently, however, payers and pharmacy benefit managers have started to push back on the prices. In the future, expansion of biosimilars may also help drive down prices.
How can your hospital or health system gain access to specialty drugs?
To help your hospital or health system gain or improve access to specialty drugs, your organization needs to be relevant to payers and specialty drug manufacturers. One way to accomplish this is by demonstrating the value that your organization can bring to preferred dispensing networks. Below are some other best practices to consider.
- Think like a specialty pharmacy — To help retain patients, consider implementing new patient education and enhanced clinical support programs in niche specialty therapeutic areas that complement the specialty patients seen in your institutions. Not only will these and other similar services give your hospital pharmacists an opportunity to expand their roles in patient management, but they will also help improve the continuity of care for patients.
- Facilitate financial assistance for patients — High out-of-pockets costs for specialty drugs can deter patients from filling their prescriptions. By identifying patient assistance programs like co-pay foundations and drug coupon programs, you can help patients afford their treatments now and improve adherence and compliance with medication regimens.6
- Demonstrate therapeutic expertise and improved outcomes — As we continue to move toward a performance-based reimbursement model, payers and manufacturers expect clinicians to help improve outcomes and contain costs. This involves active management of drug therapy including following up with patients to increase prescription adherence and monitoring for side effects. It also includes ensuring proper dosing and utilization to help curb waste.
Where to find additional information
Even though there is no single definition of specialty, one thing is clear: The future of specialty drugs to treat complex, chronic conditions like HIV, cancer and rheumatoid arthritis will continue to grow as patients seek targeted treatments for their diseases. To learn more about this ever-evolving industry, please visit the following resources:
Kim Bergstrom, Pharm.D., is the Chief Clinical Officer (CCO) in Corporate Strategy and Business Development, McKesson Distribution Solutions, and was previously the CCO in McKesson Specialty Health. Prior to McKesson, Kim spent more than 20 years in various roles including Director of Hospital Pharmacy at UCSF Medical Center at Mount Zion, Drug Education Coordinator at Kaiser Northern California, and in oncology clinical services and disease management for several companies including National Oncology Alliance, OnCare and Oncology Therapeutics Network.
 Medicine Use and Spending Shifts: A Review of the Use of Medicines in the U.S. in 2014, IMS Institute for Healthcare Informatics, April 2015
 Specialty Drugs Will Account for 50% of All Drug Costs by 2018, Formulary Watch, June 1, 2013
 Frequently Asked Questions: Breakthrough Therapies, Food and Drug Administration, Accessed May 1, 2015
 Changing the Channel: Developments in the U.S. Specialty Pharmaceutical Distribution, IMS Health, 2009
 Specialty Drugs Driving Pharmacy Benefit Costs, Society for Human Resource Management, April 4, 2011