Specialty drugs

Specialty drugs or specialty pharmaceuticals are a recent designation of pharmaceuticals that are classified as high-cost, high complexity and/or high touch. Specialty drugs are often biologics—"drugs derived from living cells" that are injectable or infused (although some are oral medications). They are used to treat complex or rare chronic conditions such as cancer, rheumatoid arthritis, hemophilia, H.I.V.psoriasis,inflammatory bowel disease (IBD) and Hepatitis C. In 1990 there were 10 specialty drugs on the market, in the mid-1990s there were fewer than 30, by 2008 there were 200, and by 2015 there were 300. Drugs are often defined as specialty because their price is much higher than that of non-specialty drugs. Medicare defines any drug for which the negotiated price is $600 per month or more, as a specialty drug which is placed in a specialty tier that requires a higher patient cost sharing. Drugs are also identified as specialty when there is a special handling requirement or the drug is only available via a limited distributions network. By 2015 "specialty medications accounted for one-third of all spending on drugs in the United States, up from 19 percent in 2004 and heading toward 50 percent in the next 10 years," according to IMS Health, which tracks prescriptions." According to a 2010 article in Forbes, specialty drugs for rare diseases became more expensive "than anyone imagined" and their success came "at a time when the traditional drug business of selling medicines to the masses" was "in decline." In 2015 analysis by The Wall Street Journal suggested the large premium was due to the perceived value of rare disease treatments which usually are very expensive when compared to treatments for more common diseases.

Medications must be either identified as high cost, high complexity or high touch to be classified as a specialty medication by Magellan Rx Management. Specialty pharmaceuticals are defined as "high-cost oral or injectable medications used to treat complex chronic conditions." According to a 2013 article in the Journal of Managed Care & Specialty Pharmacy, on the increasingly important role of specialty drugs in the treatment of chronic conditions and their cost, drugs are most typically defined as specialty because they are expensive. Other criteria used to define a drug as specialty include "biologic drugs, the need to inject or infuse the drug, the requirement for special handling, or drug availability only via a limited distribution network." The price of specialty drugs compared to non-specialty drugs is very high, "more than $1,000 per 30-day supply."

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