Our Executive Vice President of Specialty Pharmacy at CVS Health, Dr. Alan Lotvin, offers his perspective on specialty pharmaceuticals — the fastest growing and most expensive segment of pharmacy care — and shares how the company is using its unique assets to create a better experience for patients who use specialty medications.
What does the current specialty pharmacy landscape look like?
The specialty pharmacy marketplace has changed tremendously over the past two decades. In the mid-1990s there were only a handful of specialty drugs on the market, focused on treating a limited number of cancers and rare diseases. Today there are hundreds of specialty drugs available, giving patients unprecedented access to potentially life-changing treatments.
The number of specialty medications is increasing rapidly. In the past four years we have seen 97 new drugs launched, and in the same time period there were 80 supplemental approvals or new indications for existing products. The numbers show that more and more patients are taking advantage of this increased availability: in 2006, only three of the top 10 drugs in the U. S. were specialty drugs; by 2016 it is estimated that eight of the top 10 drugs will be specialty drugs.
What is a specialty medication?
There is no standard definition for a specialty medication, but drugs in this category typically share one or more of the following characteristics. First, they are expensive — the average monthly cost to payers and patients for a specialty medication is $3,000, ten times the cost for non-specialty medications. Second, they can be difficult to administer. They are often given by injection or infusion to treat complex, chronic conditions such as rheumatoid arthritis, multiple sclerosis and psoriasis. Third, the drugs may require special handling, including temperature control. And finally, patients taking these medications may need ongoing clinical assessment to manage challenging side effects.
Why is spending on specialty drugs increasing?
There are a number of factors driving specialty spending, and clearly, drug price is a big one. Population shifts are also a factor. With 10,000 Americans turning 65 every day, a larger proportion of the population is aging into diseases like rheumatoid arthritis and cancer, which are treated with specialty medications. In fact, patients in their 60s consume three times as many specialty prescriptions at six times the cost of patients in their 20s.
The specialty patient demographic is changing in other ways, too. Specialty drugs are no longer just for those with rare and complex conditions — researchers are targeting more common conditions such as high cholesterol, asthma and hepatitis C, significantly increasing the potential pool of patients.
We’ve also increased our understanding of diseases and how to treat them, and that understanding, along with new technology, is paving the way for new specialty pharmaceuticals and drug classes. Research and development of these drugs is complex and costly, resulting in high launch prices. And in most cases, branded specialty drug makers have little to no competition from generics, allowing prices to remain high.
What can be done to curb specialty drug costs?
There are a number of traditional and novel strategies that can be employed to help manage specialty spending increases.
For example, traditional utilization management strategies including prior authorization and step therapy can be highly effective in controlling costs. Another approach is the use of tiered formularies that require higher patient cost sharing for more expensive therapies. Ensuring that the drugs are administered at the lowest-cost site of care is also important — in most instances the hospital outpatient center is the highest-cost site of drug administration, while patients’ homes and doctors’ offices are typically the lowest.
How is CVS Health helping specialty patients on their path to better health?
Specialty patients face three key challenges when filling a new prescription for a specialty medication: submitting the prescription, having easy access to centralized expert clinical and benefits support, and navigating the logistics involved in receiving the drug. To address these challenges, we created the Specialty Connect program, which offers specialty patients unsurpassed choice and flexibility in how they access their medications.
Specialty Connect is a complement to our existing specialty pharmacy process, giving patients the option to drop off any specialty prescription at any CVS Pharmacy. From there, they can choose to pick up their medication in-store or opt for mail service delivery. No matter which option they choose, they’ll receive insurance guidance and dedicated clinical support by phone from a team of specialty pharmacy experts who are available 24 hours a day, 365 days a year. All CVS Pharmacy or CVS Specialty customers can use this service no matter which PBM ultimately pays the claim. Specialty Connect has demonstrated high levels of patient satisfaction, as well as increased medication adherence, improved outcomes and lower overall health care costs for specialty patients and payors.