Bethesda, MD -- A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation explains many of the current debates surrounding the use of specialty pharmaceuticals. Specialty pharmaceuticals--drugs and biologics used to treat chronic, serious, or life-threatening diseases--are complex to manufacture and distribute, often difficult to administer, and may require special patient monitoring. They are a rapidly growing share of the costs borne by both public and private health plans. A patient could pay a few thousand dollars a month to use them, and the annual total cost for some products could exceed $100,000. This policy brief discusses the potential impact of specialty pharmaceuticals on consumers and the health care industry and some of the key challenges for policy makers.
Topics covered in this brief include:
- What's the background? According to IMS Health, in 2012, 65 percent of US spending on new drugs was on specialty pharmaceuticals. They require specialized shipping and handling, which often requires the use of specialty pharmacies. For patients, specialty pharmaceuticals hold promise for the treatment of many serious diseases, which have otherwise had few treatment options. Yet these new options trigger increasingly higher costs.
- What's the debate? Much of the debate over specialty pharmaceuticals centers on cost and reimbursement. Because therapeutic alternatives are often not available for these types of drugs, traditional means of influencing pricing, such as tiered formularies, are often unavailable. To control growing costs, payers increasingly use higher cost-sharing burdens by placing specialty pharmaceuticals in their own formulary tier. Critics contend that these practices impose a disincentive to seek and use necessary care. Some specialty pharmaceutical manufacturers also offer discount programs, but many critics contend these programs may lead to overuse of these drugs.
Payers are exploring ways to move specialty products from the medical benefit for reimbursement to the more transparent pharmacy benefit, which could better control costs and gain information on specialty use and outcomes. Comparative effectiveness research is also being discussed as a tool to decrease the cost of these drugs, but pressure from interest groups has kept this kind of research from substantially altering costs.
- What's next? The growth of specialty pharmaceuticals and discussion about the right balance between cost containment and patient access is expected to continue. The Patient-Centered Outcomes Research Institute and the Independent Advisory Board, both created by the Affordable Care Act, have the potential to recommend ways to reduce these costs. However, at this time, no mechanisms in the Affordable Care Act give these boards the authority to act.
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