“Specialty” drugs are expensive and cover a vast array of health conditions. Insurer’s have their individual methods of identifying and categorizing speciality drugs. Dozens to hundreds of medications are considered specialty drugs, either because of the way they’re made, their costs or both. Some drugs are liquid and are injected, while others are in pill form. Many cost more than $2,000 a month.
“Biologics” or specialty drugs are used by only a small percentage of patients but they represent the fastest- growing category of spending by employers on prescription drugs, according to several recent studies, because of their high cost. Some insurance plans set an upper annual cap on how much patients have to pay out of pocket for such medications, while others leave the policyholder exposed to unlimited costs.
Humira, Enbrel and Remicade treat arthritis while Avastin and Rituxan treat cancer. These drugs are among the top 10 selling drugs worldwide by revenue, according to data from Medco, a company that runs pharmacy benefit programs for employers and insurers. Worldwide, the five drugs accounted for $29 billion in sales in 2009.
Because of the extreme costs associated with ‘specialty drugs’ employers require that a percentage of the cost of specialty drugs be paid by the employee ranging from 20 percent to as much as 40 percent.
Surveys show that roughly fifteen percent of employers have added a “specialty” category to their drug benefits, and more are likely to adopt them, given that more than 600 specialty drugs are in development.
On the national level a decision is being made on whether to allow such specialty pricing in the “essential benefit packages” that all insurance sold through new online marketplaces called exchanges will be required to offer starting in 2014.