In the beginning, about three or four years ago, specialty drugs were primarily used to treat rare genetic conditions such as Gaucher's disease or diseases such as multiple sclerosis. However, they are being used increasingly to control chronic illnesses, which accounts in part for the increased demand.

Although less than 3 percent of people are using specialty medications, these patients account for 25 percent to 30 percent of an insurer's overall costs. Express Scripts reports that claims for specialty drugs increased 18.8 percent between 2003 and 2004, compared with 9.4 percent for traditional drugs. The company expects spending on specialty drugs to double over the next four years, accounting for more than 25 percent of outpatient pharmacy spending by 2008. Duane Barnes, vice president of Aetna Pharmacy Management Fulfillment Operations and Aetna Specialty Pharmacy, says that "in 2005, specialty drugs accounted for about $55 billion in ... drug expenditures, but are expected to climb to $1.7 trillion by 2030."

Projected spending on specialty drugs, 2004 vs. 2008

Late-stage biotech drugs in development

Note: Percentages do not add up to 100% because some biotechnology drugs fall into more than one category.

Source: Curascript Pharmacy, 2004 Specialty Pharmacy Management Guide & Trend Report, June 2005.

Note: Totals are not 100 because percentages are rounded.

Source: Wyeth Trend Report Series 2007. Specialty Pharmacy Management Insights.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.