Trends in Specialty Drug Approvals & Management
Advances in science and technology continue to expand how we treat and cure complex diseases. These advances in technology have contributed to a steady shift in drug approvals from traditional drugs to specialty drugs. So, what are specialty drugs and why should we care about them?
What is a specialty drug?
There is no standard definition for what specialty drugs are. Various stakeholders in the drug supply chain may define specialty drugs differently. This has created confusion and, in some cases, additional cost to plan sponsors. However, it is generally agreed that a specialty drug possesses at least some or all of the attributes below:
Biologic and complex molecules
Indicated for rare, complex, and/or chronic diseases
Require special handling, distribution, storage, and administration
May require administration by a healthcare provider
Associated with high cost, typically $500 or more per month supply
Why do we care?
While specialty drugs account for about 2% of total drug utilization annually for most payers, they generally account for an estimated 50% or more of the total drug spend. In the last decade, the FDA has approved an increasing number of specialty drugs every year. This trend is expected to continue. For example, in 2020, there were 53 drugs approved by the FDA, 36 of those were specialty.
Contact Axum for complete list of specialty drug approvals.
Trends in FDA Drug Approval, 2020: Traditional vs. Specialty
The continued growth of specialty drug approvals brings innovative, life saving therapies to patients. However, the management of specialty drugs has proved to be challenging for many plan sponsors. This is because as complex as specialty drugs are to understand, their their management is even more complicated. Over the years, here are some of the key specialty drug management challenges plan sponsors have faced:
Siloed & ineffective clinical management
Economic management muddled with conflict of interest, lack of transparency & information asymmetry
Vendors & plan sponsor misalignment
In addition to the above challenges, unlike traditional drugs which are generally covered under the pharmacy benefit, specialty drugs flow under both pharmacy and medical benefit. While most plan sponsors are familiar with management of specialty drugs under pharmacy benefit, they have been slow to implement management strategies to address the growing management needs under the medical benefit.
Not having a management strategy on the medical side of the benefit is a big misalignment that plan sponsors can no longer ignore. As specialty drugs have increased, so has the share of specialty drugs flowing through the medical benefit. In 2019, for example, 16 out of 41 of the specialty drugs approved were found to have flown through the medical benefit. Similarly, in 2020, 15 out of 36 of the specialty drugs approved were drugs that flowed under medical benefit. Thus, having a comprehensive specialty drug management approach across pharmacy and medical benefit is critical.
Trends in FDA Drug Approvals, 2020
Specialty Drug Management Reimagined with Axum Rx
Axum Rx has built an efficient Specialty Drug Management Ecosystem by combining decades of industry business intelligence, benefits management strategy, clinical expertise and technology solutions to address serious gaps in specialty drug management. The Axum Rx Specialty Drug Ecosystem is designed to create three key value systems in specialty drug management:
Clinical value
Economic value
Realignment value
Above all, Axum Rx has reimagined and simplified the archaically convoluted specialty drug management paradigm by putting the interest of clients at the forefront of everything. By removing all of the conflicts and misalignments, Axum Rx focuses on what truly matters. Helping patients get access to the right drug therapy at the right time across both pharmacy and medical benefit. This is the premise of the entire profession of pharmacy. This is the Axum promise.