What do you think are the fastest growing parts of health plans in the United States today? It is prescription drugs – and within that broader category, it is specialty drugs. Even when overall healthcare costs decline, as they did in the 2021 Milliman Medical Index, pharmacy costs still increased. 

It’s by far the fastest growing segment within healthcare costs. Prescription costs are approximately a quarter of total healthcare spend, and half of those prescription costs go toward specialty drugs. That represents a huge amount of money! 

But that total also leads to a lot of confusion. What exactly is a specialty drug, and what makes it different from just “regular” drugs? Why are these specialty pharmaceuticals so expensive? 

What’s really going on here? 

In this article, we’ll discuss some of the factors that go into something being classified as a specialty drug and consider some of the situations where they are often used, then we’ll look at the big picture of what benefit we are getting from these expensive medications. 

How Are Specialty Drugs Defined? 

Insurers, pharmacists, and doctors look at several different criteria to categorize something as a specialty drug as opposed to a regular drug. It can be very difficult sometimes to delineate between the two categories because people don’t share the same interests or focus on the same things. Here are some of the most important factors. 

One commonly cited definition is based on cost. This can be a crude distinction, but prescription benefits managers will look at the monthly cost of a medication and set an arbitrary threshold. These lines are often set at $1000–$2000 per month. 

A second factor is based on whether a drug has any special teaching involved. What does that mean? An example would be if a drug was regularly delivered at home through an injection, and a pharmacist needs to give instruction on how to take or administer it. 

Another criterion for specialty medication would be whether the drug has any special side effects. With some specialty drugs, there needs to be specific counseling on recognizing significant side effects and knowing what to do about them. 

Specialty drugs might also require special handling. For example, some prescription medications are temperature sensitive and need cold chain security. If the drug is shipped directly to the patient’s house, it can’t sit on the doorstep for days in the hot sun; someone needs to receive it and store it safely. 

Then there are specialty drugs that fall under the U.S. Food and Drug Administration’s Risk Evaluation and Mitigation Strategy (REMS) plans. With certain drugs that have especially dangerous side effects, the FDA will require that prescribers and/or users undergo additional monitoring. For example, some drugs require patients to get a blood test before getting the medication. 

Are Specialty Drugs Better Than Regular Drugs? 

While specialty drugs can differ from regular drugs in many ways, the most important question is about effectiveness. What are these drugs doing differently (and better) to justify the extra expense and effort? 

Pharmaceuticals in general are the most common approach for dealing with various medical conditions. They are a convenient solution. 

What value do these specialty drugs bring in this situation? The first part of the answer is to think about the value that specialty drugs bring by both enriching and prolonging people’s lives.  

Earlier we discussed how specialty drugs are the fastest growing part of most health plans. In the recent past, there were many conditions that healthcare providers were unable to do anything about. Perhaps the only option would be more invasive surgical interventions.

The rise of specialty medication represents new treatments. Now we have a pill or an injection to treat these conditions, where before there was nothing. 

Just a few decades ago in the 1990s, there were approximately 30 medications that would be classified as specialty drugs. Today, there are more than 500, and many of those represent life-saving discoveries for people with rare, dangerous conditions. 

The science behind these new drugs is both complex yet surprisingly simple to understand. But sometimes with complexity comes additional chances for problems.

Traditional medications are essentially small molecule medications. That means that it’s something simple, like you can make a test tube in your chemistry class. 

As things get more advanced, you start adding carbons and creating more advanced combinations, but it’s still relatively straightforward. 

Specialty medications are very advanced technologies. Oftentimes they are proteins or peptides, fully orchestrated molecules that require every piece to be in a specific order. That is mimicking things that our bodies create inside themselves, so they are very complex to make.  

To create some of these large chains of peptides, scientists have first had to genetically engineer bacteria that could then produce the biological components. It’s too complicated for us to combine things in a test tube and come out with a fully formed set of components all in the correct order. 

As our understanding grows, it’s becoming easier to make some of these larger-molecule, specialty medications. With the use of technology, we see more and more breakthroughs in what are called biologics or biological pharmaceuticals. 

Science continues to advance in ways that lowers the barriers to making many of these products. That makes it possible for us to create medications that target much smaller groups of people, like patients with uncommon cancers or who are unable to produce certain things in their body.  

Insulin was one of the first biologics, helping treat diabetes and other conditions by recreating this hormone that our bodies produce naturally. Today, insulin is one of the most commonly used medications, so it may not come to mind when thinking of more niche, specialty drugs. But with today’s more efficient technology, we can follow those same scientific principles to help people suffering from very rare conditions in a more affordable way. 

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New treatments are developing all the time. It’s hard to keep up! The Curally medical team is dedicated to making sure our participants are balancing the disease severity with the medication’s risk and maintain getting the treatments they need, all the way from the most innovative specialty drugs to tried and true lifestyle coaching. 

Contact our team today to learn more about navigating the world of specialty medication. We’re ready to help you be the happiest, healthiest version you can be!