Employee Benefit News for School, City and County Employers

Specialty drugs bring about high costs for employers

Written by Valerie Ortiz | Feb 8, 2013 2:20:16 PM

Only a small amount of the population uses specialty medications, but the cost of these drugs has grown between 15 and 20 percent in the last few years and accounted for all drug expenditures in 2009, according to the 2012 Specialty Drug Benefit Report. In the coming years, the cost of these medications is expected to outpace that of non-specialty drugs because a large portion of newly approved medications will be specialty, competition will remain scarce and manufacturing costs are expected to stay high.

Faced with these predictions, employers are becoming more focused on managing associated costs. However, many are finding it difficult because unlike antibiotics and other more common drugs, specialty meds can be covered under various plans.

"There's no one place you can go to see what your specialty drug spend is because you have to look in three different buckets—medical plan, pharmacy plan or through the various vendors," David Dross of Mercer's managed pharmacy consulting group, told Workforce magazine. "This is the most confounding part of the pharmacy puzzle."

In addition, specialty drugs can be distributed by retail and specialty pharmacies, a physician's office, a home health agency and other providers.