Specialty drug growth is here to stay

While just 3% of CarelonRx plan members take specialty medications, specialty drugs/medications account for over 60% of total drug spend (medical + pharmacy).¹

This comes as no surprise to plan sponsors who understand that specialty drugs are difficult and costly to manufacture. Additionally, many specialty drugs are used for a small subset of patients for complex, rare diseases. There is less competition to bring these drugs to market because of the small patient populations who will typically use them.

When considering how specialty drug spend impacts a business’s bottom line, plan sponsors must be aware of projections in specialty drug costs.

• Specialty drug cost are projected to reach $475 - $505B in 2023.²
• Specialty drug pipeline has an expected continued growth of 8% per year through 2025.³
• Specialty drugs may represent up to two-thirds of newly launched drugs in the next 5 years.²
• In 1990 there were 10 specialty drugs on the market.⁴ Today specialty pharmacies manage over 400 drugs for 40 plus disease states.

It's difficult to find any other product which has seen a growth as significant as specialty drugs.

Over the past decade, there has been a trend toward a larger share of new drug approvals for specialty drugs and that's not expected to change. This is because as technology increases, researchers are able to find treatments for rare, complex diseases that did not exist before. In fact, 59% of new to market pipeline drugs are specialty.¹ Thus, specialty costs are here to stay, and all predictions show they will continue to grow for various reasons.

Utilization appears to be the main driver. Previous years’ data reported 1-2% of the population utilizing specialty drugs. This increased to over 5% in 2021.⁵ This doesn’t necessarily mean the population is getting sicker, but that members with specialty disease states who did not have any treatment options before now have access to these new agents. This also means providers are getting more familiar with prescribing these medications and members are more acceptable to trying various dosage forms, including injectables, which may offer additional treatment benefits.

With the anticipated pipeline growth, utilization will continue to climb as more members will use these drugs for additional indications as well as the new agents that will come to market.

It’s clear. Now more than ever, it’s important for plan sponsors to manage their specialty drug spend. The specialty landscape is dynamic and ever-changing and managing costs while supporting the needs of employees can be helped by anticipating future trends.

^{1. CarelonRx internal data, 2022}

^{2. The Global Use Of Medicine In 2019 (And Outlook For   2023) – Aptitude Health}

^{3. Three Specialty Drug Trends to Prepare for: Biosimilars, Gene and Cell Therapies, Cancer Drugs Evernorth April 2022}

^{4. Elsevier – “Managing the cost of specialty drugs” https://www.elsevier.com/clinical-solutions/insights/resources/insights-articles/drug-information/whitepapers/managing-the-costs-of-specialty-drugs}

^{5. Source Artemetrx report: https://www.formularywatch.com/view/spending-on-specialty-drugs-maintains-double-digit-growth}