Specialty drugs: A good value, despite high costs

Dr Chambers

Specialty drugs’ high prices raise questions about whether their cost is worth the clinical benefits they provide, according to a recent study in Health Affairs.

Lead author to James D. Chambers, assistant professor of medicine, the Tufts Medical Center Institute for Clinical Research and Health Policy Studies, and colleagues considered all specialty and traditional drugs approved by FDA from 1999 to 2011. They then identified published estimates of additional health gains (measured in quality-adjusted life-years or QALYs) and increased costs of drug and healthcare resource use that were associated with specialty drugs (n=58) and traditional drugs (n=44), compared to preexisting care.

Specialty drugs were found to offer greater QALY gains (0.183 versus 0.002 QALYs) but were associated with greater additional costs ($12,238 versus $784), compared to traditional drugs. The 2 types of drugs had comparable cost-effectiveness. However, the distributions across the 2 types differed, with 26% of specialty drugs-but only 9% of traditional drugs-associated with incremental cost-effectiveness ratios of greater than $150,000 per QALY, according to the authors.

“While many studies have examined the cost-effectiveness of individual drugs, no study has compared the value of specialty and traditional drug classes,” Dr Chambers said. “We wanted to determine whether, when compared to traditional drugs, the clinical benefits provided by specialty drugs were worth their additional costs.”

“We found that when comparing the costs and clinical benefits associated with specialty drugs with those associated with traditional drugs, the 2 drug types were similar in terms of value for money,” he said. “In other words, while specialty drugs tended to be much more expensive than traditional drugs, they also tended to offer much larger clinical benefits.”

However, the researchers also found that not all new drugs were an improvement over existing drugs-despite often being more expensive-and that many new specialty and traditional drugs offered relatively modest benefits over preexisting care, according to Dr Chambers.

“Managed care and hospital decision-makers face the challenge of paying for effective specialty drugs, and ensuring patients have appropriate access to them, all while accounting for value for money in their decision-making,” he said. “Our study shows that despite their high costs, in some cases the large health gains associated with specialty drugs mean they offer good value for their money, at least in comparison to traditional drugs.”

This study is said to be the first to systematically compare specialty and traditional drugs in this way.

“Although specialty drugs typically have higher costs than traditional drugs, we also found them to confer greater benefits and hence in many cases may still offer reasonable value for money,” Dr Chambers said.

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