Specialty drugs increasingly used to treat chronic conditions

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.