Specialty drugs, which are drugs manufactured through biologic processes, are in the midst of a tremendous boom. With an annual yearly cost trend that sits at 17% currently and is expected to grow to 22% by 2014, industry experts are predicting that specialty drugs will represent 45% of pharmaceutical manufacturer sales by 2017.
Artemetrx reports that specialty drugs already represent 30% of total drug spend after the specialty claims covered under the medical benefit are fully captured.
By 2018, specialty drug spend is expected to surpass traditional drug spend for most plan sponsors due to the double-digit growth in specialty that will continue for the foreseeable future across both the pharmacy and medical benefit.
Drugs administered in an outpatient hospital setting create a growing channel for specialty drug administration. But the outpatient setting is frequently overlooked in reporting because the drugs are often billed under revenue codes rather than under the Healthcare Common Procedure Coding System.
The study's researchers forecast that total specialty drug spend will grow from $290 per member per year to $845 by 2018, due to a strong drug pipeline, price inflation and an expanded number of approved uses for drugs.
Forecasts for traditional and specialty medications are based on market trends in new drug approvals, new indications, generic availability, expected price inflation, and overall drug demand.[Source: "2013 Specialty Drug Trend Study." Artemetrx. January 2013.]