Specialty drug spending to double by 2010














It’s inevitable — growth in drug spending will be propelled by greater use of biologics. The Food and Drug Administration approved only eight new biopharmaceuticals from 2005 through 2007, which suggests that at the moment, additional indications for existing products, rather than new products, account for the bulk of increased specialty drug use. In time, however, it’s expected that new products will contribute more heavily, given the sheer number of biopharmaceuticals in development.

It follows that the share of total drug spending attributed to biologics will increase dramatically. The trend is unmistakable: Specialty drugs accounted for between 10 percent and 20 percent of prescription drug spending in 2006. Express Scripts predicts that by 2010, they will account for more than one fourth of all drug spending, and Aon Consulting has estimated that biologics’ share will hit 37 percent by 2020.

Which biologics will enjoy the greatest growth? Look to monoclonal antibodies — for example, trastuzumab (Herceptin), infliximab (Remicade), bevacizumab (Avastin), adalimumab (Humira), and rituximab (Rituxan) — all of which treat either chronic conditions or cancer, according to Datamonitor, a business intelligence company.

The financial implications raise questions about the value of biopharmaceuticals. Perceptions of value by various stakeholders — manufacturers, purchasers, payers, physicians, and patients — are explored in “Biologic Therapy Management,” a peer-reviewed white paper by the Biologics Finance and Access Council, which accompanies this issue of MANAGED CARE.

Specialty drugs gain on traditional drugs (billions)

Source: Express Scripts 2007

Health care spending is concentrated in people with multiple chronic conditions

Four fifths of the nation’s health care bill is for people with one or more chronic illnesses.

Source: Chronic Conditions: Making the Case for Ongoing Care from Partnership for Solutions. (www.partnershipforsolutions.org/DMS/files/chronicbook2004.pdf)

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