Specialty drug spending up considerably, but reforms limit out-of-pocket burden

November 4, 2014

Specialty drug spending per user has increased considerably in recent years, but still represents a small portion of overall drug spending per beneficiary, according to a study published recently in Health Affairs.

Trish

Specialty drug spending per user has increased considerably in recent years, but still represents a small portion of overall drug spending per beneficiary, according to a study published recently in Health Affairs.

Erin Trish, PhD, Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California, and colleagues evaluated trends in spending on specialty drugs using pharmacy claims data from a 20% sample of elderly Medicare and Medicare Advantage enrollees from 2007 through 2011.

The researchers found that, while annual specialty drug spending per beneficiary who used specialty drugs increased considerably during the time period-from $2,641 to $8,976. Specialty drugs accounted for only 6.7% of total drug spending per beneficiary in 2007 and 9.1% in 2011.

Specialty drugs: A good value, despite high costs

Also, Trish and colleagues found that cost-sharing reductions included in the Affordable Care Act (ACA) considerably reduced specialty drug users’ out-of-pocket burden, decreasing 26% from 2010 to 2011. Additionally, oral cancer agents accounted for a considerable portion of the increase in specialty drug spending over the study period.

“These findings are important because they put specialty drug spending in a bigger context of overall prescription drug spending-while specialty drug spending is considerable for the small portion of beneficiaries that take specialty drugs, overall it represents a very small portion of total per beneficiary prescription drug spending,” Trish said.

“[There is] evidence that the migration of specialty drug coverage from Medicare’s Part B medical benefit to the Part D pharmacy benefit because of new treatment options may both partially explain the growth in specialty pharmacy spending and also may be important for payers and providers as the site of care for specialty therapeutics may continue to shift in the coming years,” Trish said.  

5 ways to manage specialty drug expenses

Given all the recent attention focused on specialty drug spending and drug prices, the authors wanted to provide a context for specialty drug spending and its relative contribution to overall pharmacy spending over time.

“We wanted to evaluate the impact of ACA provisions reducing cost-sharing for seniors while in the donut hole on the out-of-pocket burden faced by specialty drug users,” Trish said. “Finally, we wanted to assess whether the availability of new oral treatment options had an impact on shifting the coverage of specialty therapeutics from the medical to the pharmacy benefit.”

The implementation of ACA-based donut hole cost-sharing reductions has resulted in considerable decreases in out-of-pocket expenditures among specialty drug users, the authors said.

“Specialty drugs offer considerable value to a small group of elderly Medicare beneficiaries who have complex conditions and limiting coverage of these drugs may render treatment options unavailable to these seniors, who stand to gain significant clinical benefit from their use,” Trish said.