A recent AARP study found that average wholesale prices of 112 commonly used specialty drugs rose 43 percent between 2003 and 2007. In 2007 alone, the wholesale price of specialty drugs rose 8.7 percent, or 3 times the rate of inflation. Although biologics comprise a relatively small percentage of drug prescriptions, six biologics accounted for 43 percent of all Medicare Part B drug spending in 2008. And it’s likely that figure has nowhere to go but up — considering that Medco’s 2009 Drug Trend Report predicts that specialty drugs will account for 30 to 40 percent of drugs in the pipeline by 2011.
“The steadily rising costs of specialty drugs has increased the drug trend — with minimal generic opportunities, no low-cost competitors, and increased utilization, we can anticipate a 15 to 17 percent annual increase in specialty pharmacy spend,” says Steven Russek, RPh, vice president, professional practice, and chief clinical officer at Accredo Health Group, a wholly owned subsidiary of Medco. “We’re tracking 21 drugs in the pipeline with expected activity in the next 6 to 12 months. New user groups are emerging for drugs we don’t currently have. This will continue to drive cost.”
Paralleling the rise in specialty drug costs: Average healthcare spending for a typical American family of four through an employer-sponsored PPO has gone up by nearly $3,400 in the past three years, a 37 percent increase.
“Many of our clients focus only on the pharmacy benefit, and don’t realize that 40 to 60 percent of specialty drug spending is covered under the medical side,” says Russek. “Employers need to manage drugs under the medical benefit as well.”
