Policy initiatives can improve the value of specialty pharmaceuticals, says Health Affairs commentary

October 8, 2014

medical bottlesIn an analysis and commentary published in the October issue of Health Affairs, James C. Robinson, Leonard D. Schaeffer Professor of Health Economics, describes public and private sector opportunities to enhance the value of specialty pharmaceuticals—drugs to treat complex and life-threatening conditions such as cancer and rheumatoid arthritis.

The article, coauthored by Scott Howell, senior vice president of clinical services at Cardinal Health Specialty Solutions, analyzes the five principal stages specialty pharmaceuticals must pass to get from the laboratory to the bedside. These include regulatory approval from the Food and Drug Administration for market access, insurance coverage, pricing and payment, physician prescription, and patient engagement. 

According to the commentary, if structured appropriately, each stage can improve performance assessment, reduce access barriers, and support continued research and development. However, if structured inappropriately, the stages add to complicating the administrative burden, distorting clinical decision making, and weakening incentives for innovation.

Cost, pricing, and payment are big issues with specialty pharmaceuticals. The high prices for these drugs are due to the high costs for research, manufacturing, and distribution being spread out over a smaller number of patients, as opposed to millions of patients for traditional drugs targeting “blockbuster” conditions. Specialty pharmaceuticals are also typically designed to address conditions without effective treatments, and can have more adverse side effects, requiring careful use and monitoring.

Robinson and Howell believe that these concerns can be managed during the five stages, primarily by insurers and physicians, but also by patients and the FDA.

Promising specialty pharmaceuticals are “good for patients with rare and complex condition but is sure to increase drug expenditures and heighten concerns over inappropriate use,” Robinson and Howell conclude in their commentary. “New initiatives in FDA regulation, insurance coverage, pricing and payment, physician practice, and consumer cost sharing are required to ensure the value of specialty drugs.”

By Amabelle Ocampo