Understanding Specialty Medications

Aug 9, 2023

Specialty drugs are revolutionary high-cost medications designed for complex conditions like cancer and multiple sclerosis. They require special handling and monitoring, often involving injections or infusions. However, their exorbitant prices have sparked intense debate, leading to proposals and patient assistance programs. Here, we delve into the world of specialty drugs, exploring their differences from traditional pharmaceuticals, the challenges of insurance coverage, and potential solutions to make these vital medications more accessible. Discover how these advancements are reshaping healthcare and affecting patients’ lives.

What are specialty drugs?

Specialty drugs are a category of high-cost prescription medications specifically designed to treat complex, chronic conditions like cancer, rheumatoid arthritis, and multiple sclerosis. These drugs often require special handling and administration, such as injections or infusions. Patients using specialty medication may also require close oversight from healthcare providers to monitor for side effects and ensure that the medication is working effectively.

Difference between Specialty drugs and other pharmaceuticals

Specialty pharmaceuticals are distinct from traditional drugs due to their characteristics, which include intense clinical monitoring for severe side effects, frequent dosage adjustments, and specialized training for handling and administration. While specialty drugs are often large, injectable protein-based molecules produced through biotechnology, they can also be small molecules manufactured using traditional pharmaceutical methods. These medications have revolutionized the treatment of complex conditions like multiple sclerosis, cancer, pulmonary hypertension, hemophilia, and hepatitis C.

Costs of Specialty Medications

The coverage for specialty drugs typically depends on where the patient receives the medication. If the drug can be taken at home through pills or self-injections, it is likely covered under the patient’s prescription drug benefit. However, if the drug needs to be administered at a doctor’s office or outpatient clinic, it is more likely to be covered through the medical benefits portion of the patient’s health insurance coverage.

Specialty Costs and Insurance

One significant challenge associated with specialty drugs is their high cost. These medications can often exceed $1,000 per month, and spending on specialty drugs has been growing at a rate of 15 to 20 percent annually. To manage the costs, many prescription drug plans have a separate tier dedicated to specialty drugs, specifying the amount the individual needs to pay. Instead of flat-dollar copays, which are uncommon for specialty drugs, patients are often required to pay a percentage of the drug cost. However, several states have implemented caps on patients’ out-of-pocket costs for specialty drugs.

To help individuals with and without insurance access specialty drugs, many drug manufacturers offer patient assistance programs. These programs aim to alleviate the financial burden by providing support and assistance in obtaining the necessary medications.

Solutions to a problem

The cost of prescription drugs, especially specialty drugs with high price tags, has been a topic of intense debate. Various proposals and reports have been put forth to address the issue, including the President’s Budget, the National Academies of Science, Engineering, and Medicine’s report on affordable medicines, and the Department of Health and Human Services’ Blueprint to Lower Drug Prices and Out-of-Pocket Costs. However, it is crucial to consider the direct and indirect effects of these recommendations on the out-of-pocket costs of elderly and disabled individuals who require the most expensive medications.

Research shows that high out-of-pocket costs under Medicare Part D policies can significantly impact the utilization of specialty drugs. Higher costs are associated with increased rates of prescription abandonment, treatment delays, interruptions, and discontinuation across various disease areas like multiple sclerosis, rheumatoid arthritis, psoriasis, and cancer.

It’s essential to evaluate proposed changes in the context of the current Medicare Part D benefit design, which includes variable cost-sharing requirements throughout the coverage year. Patients who are not eligible for low-income subsidies have a deductible and an initial coverage phase with 25 percent coinsurance. Specialty drugs, priced at $670 or more per month, may be placed in a “specialty tier,” subjecting them to up to 33 percent coinsurance during this phase.

Specialty medication represents a significant advancement in the treatment of complex conditions. These high-cost drugs require special handling and administration, with patients often needing close monitoring. The coverage for specialty drugs depends on the administration location, and their expenses can be substantial. However, patient assistance programs are available to help individuals access these crucial medications. It is important to consider the impact of out-of-pocket costs on patients’ utilization of specialty drugs and evaluate proposed changes in the current benefit structure

Sources: Health Insurance.org, Academy of Managed Care Pharmacy , Health Affairs. 


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