2018 Specialty Drug Trend Report

Specialty medications have reached the promised land predicted several years ago, representing half or more of drug spending.  Another specialty pharmacy firm, Advanced Medical Strategies, releases a report on 2018 trend for these therapeutics.   (AMS Report)   Spending is buttressed to some extent by the fact that the FDA approved 59 novel compounds in 2018 and 44 fell into the specialty category and 19 were orphan drugs, which tend to be quite expensive.  From 2016 to 2017, the company says spending rose 10%, as branded specialty drugs accounted for about 1% to 3% of prescriptions but 30% of branded spending.  The Blue Cross association reported that of the 30 drugs accounting for the most spending, over 20 are specialty compounds.  For 2018 the firm found that top five most expensive drugs were all specialty therapies, with the top four actually being cell or gene therapies.  Those may have high price tags but so far have small populations so total spending is relatively low compared to some specialty oncology medications for example.  Annual costs on some drugs, for example for Hemophilia are estimated to top $3 million dollars.  Several specialty medications had annual cost growth that exceeded $40,000 or 20%.  That is a lot of additional spending, but I am sure the drug manufacturers had a good reason for those price increases, maybe they made the product better or something.  Oh, no, you think maybe they were just gouging!!  Come on, what would possibly make you think that!  Some of the drugs that the firm’s customers inquired most about in terms of cost control efforts included cancer compounds Opdivo and Keytruda, and anti-arthritis drugs Remicade and Humira, all of which get lots of advertising and regular price increases.  In a normal world the price would be going down.  This report is a hash of information largely reported elsewhere, is poorly written and doesn’t really have much analysis, but it does reflect again why inevitably drug companies are going to get hammered on their pricing behavior, which is not only inexcusable, but stupid.