The explosive growth in the specialty drug sector challenges the sustainability of the U.S. health system because there are not enough loss-of-earnings offsets to cover the increases.
The specialty drug sector now represents about one-third of all drug spending in the U.S., a 23% increase from five years ago. In addition, specialty drugs now hold a sizable share of new molecular entity (NME) launches. In the past five years, 52% of NMEs have been specialty drugs, representing a 40% increase from 2005-2009.
This explosive growth in the specialty drug sector challenges the sustainability of the U.S. health system because there are not enough loss-of-earnings (LOE) offsets to cover the increases, according to Douglas M. Long, vice president of Industry Relations for IMS Health, Ponte Vedra Beach, Florida.
Speaking at the Academy of Managed Care Pharmacy meeting in a session entitled The U.S. Pharmaceutical and Specialty Market: Looking back and Looking ahead, Long provided a snapshot of the current pharmaceutical market and the expected changes in the demand and payment for medical care.
The rapid growth in specialty drugs has been in part driven by innovations in treatments for hepatitis C, cancer, multiple sclerosis and diabetes. Over the past decade, said Long, the research and development pipeline has shifted to specialty medicines, with 10 breakthrough therapies being launched. In 2014, 42 new active substances were launched-up from 36 in 2013-that provided major advances in the treatment of hepatitis C, multiple sclerosis and cancer.
Long explained that orphan drugs are a significant driver of innovation and more can be expected in the future. Incentives from the Food and Drug Administration have encouraged a surge in drug development for infectious diseases, he noted. In 2014 and 2013, 18 and 17 orphan drugs were launched, respectively, representing the two highest years ever of orphan drug launches.
Long also discussed the change in revenues because of generic competition for many drugs and, recently, for biologics. Products facing LOE in the next four years are valued at $78.4 billion, he said. He also highlighted the emergence of biosimilars that are making steady progress.
Overall, according to Long, market access will be key in the future success of a drug and “real world evidence will play a key role in determining how successful a drug will be in the future.”
Changes in demand and payment for medicine that will play a role include:
In this latest episode of Tuning In to the C-Suite podcast, Briana Contreras, an editor with MHE had the pleasure of meeting Loren McCaghy, director of consulting, health and consumer engagement and product insight at Accenture, to discuss the organization's latest report on U.S. consumers switching healthcare providers and insurance payers.
Listen
Group Purchasing Organizations of 'Big 3' PBMs Cloud Transparency, Says Critic | PBMI 2024
September 6th 2024Greg Baker, CEO of AffirmedRx, did not hold back in criticizing CVS Caremark, Optum Rx and Express Scripts and their group purchasing organizations today at the PBMI Annual National Conference.
Read More
In our latest "Meet the Board" podcast episode, Managed Healthcare Executive Editors caught up with editorial advisory board member, Eric Hunter, CEO of CareOregon, to discuss a number of topics, one including the merger that never closed with SCAN Health Plan due to local opposition from Oregonians.
Listen