Drugs Costing >$670/Month are Special!

The New England Journal of Medicine June 4, 2020 pp2179-2181. “Specialty Drugs- A Distinctly American Phenomenon”. Huseyin Naci, M.H.S., Ph.D and Aaron S. Kesselheim, M.D., J.D., M.P.H.

Source https://www/ldi.upenn.edu

What’s a specialty drug?

“…(CMS) defines specialty drugs as those with monthly costs exceeding $670”.

Specialty Drugs (SD) spending, between 2010 and 2015, rose from $8.7-$32.8B by Medicare and $4.8-$9.9B by Medicaid. In these plans, 1% of drugs accounted for 30% of spending in 2015. SD spending by commercial plans increased four-fold between 2003 and 2014.

You probably are unaware but SD are “on the highest cost-sharing tiers” with a maximum allowable coinsurance of 33%. “Part D enrollees not receiving low-income subsidies can pay thousands of dollars out of pocket per year for a single specialty-tier drug”. The “average project out-of-pocket spending of $6,894 in 2019” for “numerous disease-modifying therapies used for treating multiple sclerosis”. (See table above not from the NEJM article but from https://www/ldi.upenn.edu)

What fraction of new drugs are classified as SD?


Prior authorization is “often implemented for drugs on specialty tiers”.

Are all SD proved effective?

“In the United States…expensive drugs that offer added…benefit…are typically placed on specialty tiers alongside drugs that don’t offer such benefit”.

UK and Canada are countries that “undertake value-based assessments to determine whether a drug’s cost is justified, given its benefits”. Naci and Kesselheim (NK) state, “We believe that the United States should abandon the now meaningless specialty-drug label for high-cost drugs and instead categorize therapies according to their comparative clinical- and cost-effectiveness…”. Further such effective SD “should not be subject to onerous cost-sharing and pre-authorization requirements”. This…”would improve patient access…and could ultimately improve health outcomes”. NK suggest “CMS…eliminate its cost-based threshold...” and … “require health plans … to use “value-based coverage and tiering decisions” for part D and for physician-administered Medicare part B drugs”.