{{Short description|Type or designation of pharmaceuticals}} '''Specialty drugs''' or '''specialty pharmaceuticals''' are a recent designation of pharmaceuticals<ref name="CMS_strategy_2004" /><ref name="nytimes_1988">{{cite web | url=https://www.nytimes.com/1988/01/25/business/kodak-s-diversification-plan-moves-into-a-higher-gear.html | title=Kodak's Diversification Plan Moves Into a Higher Gear | work=New York Times | date=25 January 1988 | access-date=17 October 2015 | author=Feder, Barnaby J.}}</ref> classified as high-cost,<ref name="ncbi_2013" /><ref name="magellanrx_2015" /><ref name="nytimes.com_2015_07_16" /> high complexity and/or high touch.<ref name="magellanrx_2015" /> Specialty drugs are often '''biologics'''<ref name="ncbi_2013" /><ref name="workforce.com" />—"drugs derived from living cells"<ref name="FAS" /> that are injectable or infused (although some are oral medications).<ref name="magellanrx_2015" /> They are used to treat complex or rare chronic conditions such as cancer, rheumatoid arthritis, hemophilia, H.I.V.<ref name="nytimes.com_2015_07_16">{{cite web | url=https://www.nytimes.com/2015/07/16/business/specialty-pharmacies-proliferate-along-with-questions.html | title=Specialty Pharmacies Proliferate, Along With Questions | work=New York Times | date=15 July 2015 | access-date=5 October 2015 | author1=Thomas, Kate | author2=Pollack, Andrew |location=Sinking Spring, Pa.}}</ref> psoriasis,<ref name="ncbi_2013" /> inflammatory bowel disease<ref name="ncbi_2013" /> and hepatitis C.<ref name="magellanrx_2015" /><ref name="prnewswire_2015">{{cite web | url=http://www.prnewswire.com/news-releases/diplomat-expands-hepatitis-c-specialty-services-with-acquisition-of-burmans-specialty-pharmacy-300102142.html | title=Diplomat expands hepatitis C specialty services with acquisition of Burman's Specialty Pharmacy | work=PRNewswire | date=19 June 2015 | access-date=5 October 2015 | location=Flint, Michigan}}</ref> In 1990 there were 10 specialty drugs on the market,<ref name="AJMC_2013">{{cite web | url=http://www.ajmc.com/payer-perspectives/0213/the-growing-cost-of-specialty-pharmacyis-it-sustainable | title=The Growing Cost of Specialty Pharmacy-Is it Sustainable? | publisher=The American Journal of Managed Care | date=18 February 2013 | access-date=23 January 2016 | archive-date=26 October 2017 | archive-url=https://web.archive.org/web/20171026000335/http://www.ajmc.com/payer-perspectives/0213/the-growing-cost-of-specialty-pharmacyis-it-sustainable }}</ref> around five years later nearly 30,<ref name="ncbi_2008">{{cite journal | title=The Evolution of Specialty Pharmacy | date=July 2008 | author=Kober, Scott | pages=50–51 | volume=5 | journal=Biotechnology Healthcare | number=2 |pmc=2706163 | pmid=22478714}}</ref> by 2008 200,<ref name="ncbi_2008" /> and by 2015 300.<ref name="Pewtrusts_2015">{{cite web | url=http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2015/11/specialty-drugs-and-health-care-costs | title=Specialty Drugs and Health Care Costs | work=The Pew Charitable Trusts | date=16 November 2015 | access-date=29 February 2016}}</ref>
Drugs can be defined as specialty because of their high price.<ref name="ncbi_2013" /><ref name="magellanrx_2015" /><ref name="nytimes.com_2015_07_16" /> Medicare defines any drug with a negotiated price of $670 per month or more as a specialty drug. These drugs are placed in a specialty tier requiring a higher patient cost sharing.<ref name="Pewtrusts_2015" /><ref name="medicare_2016">{{citation|title=Centers for Medicare & Medicaid Services, Announcement of Calendar Year (CY) 2018 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter and Request for Information (2017)|date=3 April 2017|url=https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2018.pdf|work=CMS|access-date=12 January 2018}}</ref> Drugs are also identified as specialty when there is a special handling requirement<ref name="ncbi_2013" /> or the drug is only available via a limited distributions network.<ref name="ncbi_2013" /> By 2015 "specialty medications accounted for one-third of all spending on drugs in the United States, up from 19 percent in 2004 and heading toward 50 percent in the next 10 years",<ref name="nytimes.com_2015_07_16" /> according to IMS Health.
According to a 2010 article in Forbes, specialty drugs for rare diseases became more expensive "than anyone imagined" and their success came "at a time when the traditional drug business of selling medicines to the masses" was "in decline".<ref name="Forbes_2010">{{citation |title=The World's Most Expensive Drugs |url=https://www.forbes.com/2010/02/19/expensive-drugs-cost-business-healthcare-rare-diseases.html |date=19 February 2010 |access-date=25 June 2015 |first=Matthew |last=Herper |work=Forbes}}</ref> In 2015 analysis by ''The Wall Street Journal'' suggested the large premium was due to the perceived value of rare disease treatments which usually are very expensive when compared to treatments for more common diseases.<ref name="WSJ">{{cite news|title=Alexion to Buy Synageva for $8.4 Billion|work=The Wall Street Journal|date=May 6, 2015|url=https://www.wsj.com/articles/alexion-to-buy-synageva-in-8-4-billion-biotech-deal-1430911447|access-date=May 7, 2015|author=Chelsey Dulaney}}</ref>
==Definition and common characteristics==
Medications must be either identified as high cost, high complexity or high touch to be classified as a specialty medication by Magellan Rx Management.<ref name="magellanrx_2015">{{cite web | url=https://magellanrx.com/member/external/commercial/common/doc/en-us/MRx_Formulary_Specialty.pdf | title=Specialty Pharmacy Drug List | publisher=Magellan RX Management | date=2015 | access-date=5 October 2015}}</ref> Specialty pharmaceuticals are defined as "high-cost oral or injectable medications used to treat complex chronic conditions".<ref name="magellanrx_2015" /> According to a 2013 article in the ''Journal of Managed Care & Specialty Pharmacy'', on the increasingly important role of specialty drugs in the treatment of chronic conditions and their cost, drugs are most typically defined as specialty because they are expensive.<ref name="ncbi_2013">{{cite journal | title=Health plan utilization and costs of specialty drugs within 4 chronic conditions | journal=Academy of Managed Care Pharmacy | date=September 2013 |volume=19 |number=7 |pages=542–8 | author1=Gleason, Alexander G. C. | author2=Starner, C. I. | author3=Ritter, S. T. | author4=Van Houten, H. K. | author5=Gunderson, B. W. | author6=Shah, N. D. |pmid=23964615 | doi=10.18553/jmcp.2013.19.7.542| pmc=10437312 }}</ref> Other criteria used to define a drug as specialty include "biologic drugs, the need to inject or infuse the drug, the requirement for special handling, or drug availability only via a limited distribution network".<ref name="ncbi_2013" /> The price of specialty drugs compared to non-specialty drugs is very high, "more than $1,000 per 30-day supply".<ref name="magellanrx_2015" /><ref name="nytimes.com_2015_07_16" />
Specialty drugs cover over forty therapeutic categories and special disease states with over 500 drugs.<ref name="magellanrx_2015" />
Vogenberg claims that there is no standard definition of a specialty drug which is one of the reasons they are difficult to manage.<ref name="workforce.com" /> "[T]hose pharmaceuticals that usually require special handling, administration, unique inventory management, and a high level of patient monitoring and support to consumers with specific chronic conditions, acute events, or complex therapies, and provides comprehensive patient education services and coordination with the patient and prescriber."<ref name="URAC" />
===High cost=== Drugs are most typically defined as specialty because they are expensive.<ref name="ncbi_2013" /> They are high cost "both in total and on a per-patient basis".<ref name="pppmag_2014" /> High-cost medications are typically priced at more than $1,000 per 30-day supply.<ref name="magellanrx_2015" /><ref name="nytimes.com_2015_07_16" /> The Medicare Part D program "defines a specialty drug as one that costs more than $600 per month".<ref name="pppmag_2014" /><ref name="serono">{{citation |work=EMD Serono |series=EMD Serono Specialty Digest |edition=10 |title=Managed Care Strategies for Specialty Pharmaceuticals|date= 2014}}</ref> Most of the prescriptions filled by Pennsylvania-licensed Philidor Rx Services, a specialty online mail-order pharmacy, which mainly sold<ref name="Bloomberg_2015_10_29">{{cite web | url=https://www.bloomberg.com/news/articles/2015-10-29/valeant-sales-web-emerged-after-druggist-flagged-mystery-scripts | title=The Tiny Pharmacy at the Center of Valeant's Money Mystery | publisher=Bloomberg | date=29 October 2015 | access-date=1 November 2015 | author1=Langreth, Robert | author2=Deprez, Esmé E.}}</ref><ref name="Bloomberg_2015_Armstrong">{{cite web | url=https://www.bloomberg.com/news/articles/2015-10-30/valeant-says-it-s-cutting-ties-with-troubled-pharmacy-philidor | title=Valeant Says It's Cutting Ties With Troubled Pharmacy Philidor | publisher=Bloomberg | date=30 October 2015 | access-date=31 October 2015 | author1=Armstrong, Drew | author2=Kitamura, Makiko}}</ref><ref name="financialpost_2015_10_30">{{cite web | url=http://business.financialpost.com/investing/global-investor/valeant-pharmaceuticals-international-inc-cuts-ties-with-philidor-as-business-practice-controversy-grows | title=Valeant Pharmaceuticals International Inc cuts ties with Philidor as business practice controversy grows | work=Bloomberg News | date=30 October 2015 |access-date=1 November 2015}}</ref> Valeant Pharmaceuticals International Inc expensive drugs directly to patients and handled insurance claims on the customers' behalf,<ref name="businessinsider">{{cite web | url=http://www.businessinsider.com/philidor-valeant-consumer-complaints-2015-10 | title=The secret firm at the heart of Valeant's crisis has an alleged history of shady behavior with customers | work=Business Insider | date=23 October 2015 | access-date=1 November 2015 | author=Lopez, Linette}}</ref><ref name="troubling_RX">{{citation|url=http://www.pressreader.com/usa/los-angeles-times/20151101/282037621032574/TextView |title=A Troubling RX |author1=Peterson, Melody |author2=Pfeifer, Stuart |date=1 November 2015 |access-date=1 November 2015 |work=Los Angeles Times}}</ref> such as Solodyn, Jublia,<ref name="WSJ" /><ref name="WSJ_2015_10_29">{{cite news | url=https://www.wsj.com/articles/valeant-countersues-r-o-pharmacy-1446176996 | title=Valeant Countersues R&O Pharmacy Billing dispute draws attention to drug maker's work with specialty pharmacies | date=29 October 2015 | access-date=1 November 2015 | author=Rapoport, Michael| newspaper=Wall Street Journal }}</ref><ref name="valeant">{{cite web | url=http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Pharmaceuticals-Announces-FDA-Approval-Of-Jublia-for-the-Treatment-of-Onychomycosis/default.aspx | title=Valeant Pharmaceuticals Announces FDA Approval Of Jublia® for the Treatment of Onychomycosis | work=Valeant Pharmaceuticals | date=9 June 2014 | access-date=1 November 2015 | location=Laval, Quebec | archive-url=https://web.archive.org/web/20151108032544/http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Pharmaceuticals-Announces-FDA-Approval-Of-Jublia-for-the-Treatment-of-Onychomycosis/default.aspx | archive-date=8 November 2015 }}</ref> and Tretinoin, would be considered specialty drugs.<ref name="valeant_retin">{{cite web | url=http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Pharmaceuticals-Announces-Approval-of-Retin-A-Micro-Microsphere-008/default.aspx | title=Valeant Pharmaceuticals Announces Approval of Retin-A Micro® Microsphere 0.08% | work=Valeant Pharmaceuticals | date=31 January 2014 | access-date=1 November 2015 | location=Laval, Quebec | archive-url=https://web.archive.org/web/20140215210428/http://ir.valeant.com/investor-relations/news-releases/news-release-details/2014/Valeant-Pharmaceuticals-Announces-Approval-of-Retin-A-Micro-Microsphere-008/default.aspx | archive-date=15 February 2014 }}</ref>
===High complexity=== Specialty drugs are more complex to manufacture.<ref name="pppmag_2014">{{cite web | url=http://www.pppmag.com/article_print.php?articleid=1637 | title=The Increasing Impact of High-Cost Specialty Therapies | date=2014 | access-date=27 October 2015 | author=Lucio, Steven | archive-url=https://web.archive.org/web/20151208051829/http://www.pppmag.com/article_print.php?articleid=1637 | archive-date=8 December 2015 }}</ref> They are "highly complex medications, typically biology-based, that structurally mimic compounds found within the body".<ref name="magellanrx_2015" /> Specialty drugs are often biologics<ref name="ncbi_2013" /><ref name="workforce.com" />—"drugs derived from living cells"—but biologics are "not always deemed to be specialty drugs".<ref name="FAS">{{cite web | url=https://www.fas.org/sgp/crs/misc/R44132.pdf | title=Specialty Drugs: Background and Policy Concerns | publisher=Congressional Research Service | date=3 August 2015 | access-date=27 October 2015 | author=Kirchhoff, Suzanne M. | page=26}}</ref> Biologics "may be produced by biotechnology methods and other cutting-edge technologies. Gene-based and cellular biologics, for example, often are at the forefront of biomedical research, and may be used to treat a variety of medical conditions for which no other treatments are available."<ref name="FDA" />
{{quote|"In contrast to most drugs that are chemically synthesized and their structure is known, most biologics are complex mixtures that are not easily identified or characterized. Biological products, including those manufactured by biotechnology, tend to be heat sensitive and susceptible to microbial contamination. Therefore, it is necessary to use aseptic principles from initial manufacturing steps, which is also in contrast to most conventional drugs. Biological products often represent the cutting-edge of biomedical research and, in time, may offer the most effective means to treat a variety of medical illnesses and conditions that presently have no other treatments available."|U.S. Food and Drug Administration}}
According to the U.S. Food and Drug Administration (FDA) biologics, or<ref name="FDA">{{cite web | url=https://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CBER/ucm133077.htm | archive-url=https://web.archive.org/web/20111124160726/http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CBER/ucm133077.htm | archive-date=November 24, 2011 | title=What Are "Biologics" Questions and Answers | publisher=U.S. Food and Drug Administration | date=5 August 2015 | access-date=11 October 2015 | location=Silver Spring, MD}}</ref> {{quote|"Biological products include a wide range of products such as vaccines, blood and blood components, allergenics, somatic cells, gene therapy, tissues, and recombinant therapeutic proteins. Biologics can be composed of sugars, proteins, or nucleic acids or complex combinations of these substances, or may be living entities such as cells and tissues. Biologics are isolated from a variety of natural sources—human, animal, or microorganism..."|U.S. Food and Drug Administration}}
===High touch=== Some specialty drugs can be oral medications or self-administered injectables. Others may be professionally administered or injectables/infusions.<ref name="magellanrx_2015" /> High-touch patient care management is usually required to control side effects and ensure compliance. Specialized handling and distribution are also necessary to ensure appropriate medication administration.<ref name="magellanrx_2015" /> Specialty drugs patient care management is meant to be both high technology and high touch care, or patient-centered care with "more face-to-face time, more personal connections". Patient-centered care is defined by the Institute of Medicine as "care that is respectful of and responsive to individual patient preferences, needs and values".<ref name="huffingtonpost_Dec_2012">{{cite web | url=http://www.huffingtonpost.com/lawrence-rosen-md/health-care-technology_b_2285712.html | title=High Tech, High Touch: Why Technology Enhances Patient-Centered Care | date=13 December 2012 | access-date=5 October 2015 | author=Rosen, Lawrence| website=HuffPost }}</ref>
Specialty drugs may be "difficult for patients to take without ongoing clinical support".<ref name="pppmag_2014" />
===Limited availability=== Specialty drugs might have special requirements for handling procedures and administration including the necessity of having controlled environments such as highly specific temperature controls to ensure product integrity.<ref name="pppmag_2014" /> They are often only available via a limited distributions network such as a special pharmacy.<ref name="ncbi_2013" /> Specialty drugs may be "challenging for providers to manage".<ref name="pppmag_2014" />
===Rare and complex diseases===
Specialty drugs may be taken "by relatively small patient populations presenting with complex medical conditions".<ref name="pppmag_2014" />
==History==
"Specialty pharmacies have their roots in the 1970s, when they began delivering temperature-controlled drugs to treat cancer, HIV, infertility and hemophilia."<ref name="bloomberg_2015_Valeant">{{Cite web|title = Valeant's Favorite Pharmacy Made Life Easy for Doctors, at a Price: Why Valeant Is an Unusual Pharmaceutical Ethics Case|url = https://www.bloomberg.com/news/articles/2015-11-12/pharmacies-like-philidor-make-life-easy-for-doctors-at-a-price|website = Bloomberg.com|access-date = 23 January 2016 |date=12 November 2015 |first1 = Michelle Fay |last1=Cortez |first2=John|last2 = Lauerman}}</ref>
{{quote|"The business grew as more drugs became available for patients to inject themselves and as insurers sought to manage expenses for patients with chronic conditions, according to areport from IMS Health. Manufacturers have increasingly relied on these pharmacies when it comes to fragile medicines that need special handling or have potentially dangerous side effects that require them to be taken under a management program."|Bloomberg 2015}}
According to ''The American Journal of Managed Care'', in 1990 there were 10 specialty drugs on the market.<ref name="AJMC_2013"/> According to the National Center for Biotechnology Information, by the mid-1990s, there were fewer than 30 specialty drugs on the market, but by 2008 that number had increased to 200.<ref name="ncbi_2008" />
Specialty drugs may also be designated as orphan drugs or ultra-orphan drugs under the U. S. Orphan Drug Act of 1983. This was enacted to facilitate development of orphan drugs—drugs for rare diseases such as Huntington's disease, myoclonus, amyotrophic lateral sclerosis, Tourette syndrome and muscular dystrophy which affect small numbers of individuals residing in the United States.<ref name="GPO">{{cite web | url=http://www.gpo.gov/fdsys/pkg/STATUTE-96/pdf/STATUTE-96-Pg2049.pdf | title=Orphan Drug Act of 1983 | work=US Food and Drug Administration | date=4 January 1983 | access-date=27 October 2015}}</ref>
Not all specialty drugs are orphan drugs. According to Thomson Reuters in their 2012 publication "The Economic Power of Orphan Drugs", there has been increased investing in orphan drug research and development partly since the U.S. Congress enacted the Orphan Drug Act, giving an extra monopoly for drugs for "orphan diseases" that affected fewer than 200,000 people in the country.<ref name="Forbes_2010" /> Similar acts came into existence in other regions of the world, many driven by "high-profile philanthropic funding".<ref name="ThomsonReuters_2012">{{citation |url=http://thomsonreuters.com/content/dam/openweb/documents/pdf/pharma-life-sciences/white-paper/1001450.pdf |title=The Economic Power of Orphan Drugs |work=Thomson Reuters |year=2012 |access-date=29 June 2015 |author1=Laura Gaze |author2=Jennifer Breen |archive-date=13 May 2015 |archive-url=https://web.archive.org/web/20150513083426/http://thomsonreuters.com/content/dam/openweb/documents/pdf/pharma-life-sciences/white-paper/1001450.pdf }}</ref><ref name="Economically_viable_2012">{{citation |url=http://www.drugdiscoverytoday.com/download/900 |title=Orphan drug development: an economically viable strategy for biopharma R&D |date=15 August 2012 |access-date=29 June 2015 |author1=Kiran N. Meeking| author2= Cory S.M. Williams | author3= John E. Arrowsmith |doi=10.1016/j.drudis.2012.02.005 |volume=17 |issue=13–14 |journal=Drug Discovery Today |pages=660–664 |pmid=22366309|url-access=subscription }}</ref> According to a 2010 article in ''Forbes'', prior to 1983 drug companies largely ignored rare diseases and focused on drugs that affected millions of patients.<ref name="Forbes_2010" />
The term ''specialty drugs'' was used as early as 1988 in a ''New York Times'' article about Eastman Kodak Company's acquisition of the New York-based Sterling Drug Inc., maker of specialty drugs along with many and diverse other products.<ref name="nytimes_1988" /> When Shire Pharmaceuticals acquired BioChem Pharma in 2000 they created a specialty pharmaceuticals company.<ref name="CBC_2000">{{cite web | url=http://www.cbc.ca/news/business/biochem-pharma-agrees-to-13-billion-merger-1.241450 | title=BioChem Pharma agrees to $13-billion merger | publisher=CBC News | date=11 December 2000 | access-date=17 October 2015}}</ref> By 2001 Shire was one of the fastest growing specialty pharmaceutical companies in the world.<ref name="shire_2001">{{cite web | url=http://investors.shire.com/~/media/Files/S/Shire-IR/annual-interim-reports/archive/2001ukgaapaccountsweb.pdf | title=Annual report and accounts for the year ended 31 December 2001 | work=Shire Pharmaceuticals Group plc | date=2001 | access-date=17 October 2015 | page=91}}</ref>
By 2001 CVS's specialty pharmacy ProCare was the "largest integrated retail/mail provider of specialty pharmacy services" in the United States.<ref name="cvshealth_2001">{{cite web | url=http://investors.cvshealth.com/~/media/Files/C/CVS-IR/reports/cvs-ar-2001.pdf | title=CVS Annual Report | work=CVS | date=2001 | access-date=17 October 2015 | archive-date=4 March 2016 | archive-url=https://web.archive.org/web/20160304131937/http://investors.cvshealth.com/~/media/Files/C/CVS-IR/reports/cvs-ar-2001.pdf }}</ref>{{rp|10}} It was consolidated with their pharmacy benefit management company PharmaCare in 2002. In their 2001 annual report, CVS anticipated that the "$16 billion specialty pharmacy market" would grow at "an even faster rate than traditional pharmacy due in large part to the robust pipeline of biotechnology drugs".<ref name="cvshealth_2001"/> By 2014 CVS Caremark, Express Scripts and Walgreens represented more than 50% of the specialty drug market in the United States.<ref name="imshealth">{{cite web | url=https://www.imshealth.com/deployedfiles/imshealth/Global/North%20America/United%20States/Managed%20Markets/5-29-14%20Specialty_Drug_Trend_Whitepaper_Hi-Res.pdf | title=Overview of the Specialty Drug Trend | work=IMS Health | date=2014 | access-date=5 October 2015 | page=11}}</ref>{{rp|4}}
When an increasing number of oral oncology agents first entered the market between 2000 and 2010, most cancer care was provided in a community oncology practices. By 2008 many other drugs had been developed to treat cancer, and drug development had grown into a multibillion-dollar industry.<ref name="The Lancet_2008">{{cite journal | author = Joensuu H | title = Systemic chemotherapy for cancer: from weapon to treatment | journal = The Lancet. Oncology | volume = 9 | issue = 3 | page = 304 | date = March 2008 | doi = 10.1016/S1470-2045(08)70075-5 | pmid = 18308256}}</ref>
In 2003 the Medicare Prescription Drug, Improvement, and Modernization Act<ref>{{USPL|108|173}}, {{USStat|117|2066}}</ref> was enacted<ref>{{cite web |url=https://www.cms.gov/medicare/coverage/prescription-drug-coverage?redirect=/PrescriptionDrugCovGenIn/01_Overview.asp |title=Medicare Modernization Act Update - Overview |publisher=Centers for Medicare and Medicaid Services |access-date=2007-03-30}}</ref>—the largest overhaul of Medicare in the public health program's 38-year history—included Medicare Part D an entitlement benefit for prescription drugs, through tax breaks and subsidies. In 2004 the U. S. Centers for Medicare and Medicaid Services (CMS) prepared a report on final guidance regarding access to drug coverage enacted under in which they included the specialty drugs tier in the prescription drug formulary.<ref name="CMS_strategy_2004">{{citation |title=Formulary Guidance |series=Medicare Modernization Act Final Guidelines - Formularies CMS Strategy for Affordable Access to Comprehensive Drug Coverage- Guidelines for Reviewing Prescription Drug Plan Formularies and Procedures|url=https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/downloads/FormularyGuidance.pdf |date=2004 |access-date=22 January 2016 |location=Baltimore, MD}}</ref> At that time CMS guidelines included four tiers: tier 1 includes preferred generics, tier 2 includes preferred brands, tier 3 includes non-preferred brands and generics and tier 4 included specialty drugs.<ref name="CMS_strategy_2004" /> By January 1, 2006, the controversial{{According to whom|date=January 2017}} Medicare Part D was put in effect. It was a massive{{Clarify|reason=vague|date=January 2017}} expansion of the federal government's provision of prescription drug coverage to previously uninsured Americans, particularly seniors.<ref name="Shrank_history">{{cite journal|author=Shrank, William H. |s2cid=70473929 |title=Physician Prescribing and Medicare Part D: Closing the Gaps |journal=Disease Management and Health Outcomes |date=April 2007 |volume=15 |number=2 |doi=10.2165/00115677-200715020-00001 }}</ref>{{rp|69}} In 2006 in the United States there was no standard nomenclature, so sellers could call the plan anything they wanted and cover whatever drugs they wanted.<ref name="The_Nation_2006">{{citation |url=http://www.thenation.com/article/part-d-outer-space/ |title=Part D From Outer Space |author=Lieberman, Trudy |work=The Nation |date=30 January 2006 |access-date=17 October 2015 |archive-date=4 March 2016 |archive-url=https://web.archive.org/web/20160304003225/http://www.thenation.com/article/part-d-outer-space/ }}</ref>
By 2008 most prescription medication plans in the United States used specialty drug tiers, and some had a separate benefit tier for injectable drugs. Beneficiary cost sharing was higher for drugs in these tiers.<ref name="kff_2008">{{citation |author1=Elizabeth Hargrave |author2=Jack Hoadley |author3=Katie Merrelli |author4= Juliette Cubansk |url=http://www.kff.org/medicare/upload/7711.pdf |title=Medicare Part D 2008 Data Spotlight: Specialty tiers |work=The Kaiser Family Foundation |date=December 2007 |access-date=17 October 2015}}</ref>
By 2011 in the United States a growing number of Medicare Part D health insurance plans—which normally include generic, preferred, and non-preferred tiers with an accompanying rate of cost-sharing or co-payment—had added an "additional tier for high-cost drugs which is referred to as a specialty tier".<ref name="uthsc_2011">{{cite thesis | url=http://etd.uthsc.edu/WORLD-ACCESS/Elias/2011-030-Elias.pdf | title=Analysis of out-of-pocket expenditures of oral oncologics for Tennessee recipients of Medicare Part D | date=May 2011 | access-date=17 October 2015 | author=Elias, Eve Carolyn | page=54 | work=The University of Tennessee | series=Master of Science | archive-url=https://web.archive.org/web/20160131002221/http://etd.uthsc.edu/WORLD-ACCESS/Elias/2011-030-Elias.pdf | archive-date=31 January 2016 }}</ref>{{rp|1}}
By 2014 in the United States, in the new Health Insurance Marketplace—following the implementation of the U.S. Affordable Care Act, also known as Obamacare<ref name="forbes_2013">{{citation |url=https://www.forbes.com/sites/investopedia/2013/09/26/5-things-you-should-know-about-the-new-health-insurance-marketplace/#6a5d176f24c6 |title=5 Things You Should Know About The New Health Insurance Marketplace |first=Jean |last=Folger |date=26 September 2013 |access-date=22 January 2016 |work=Forbes}}</ref>—most health plans had a four- or five-tier prescription drug formulary with specialty drugs in the highest of the tiers.<ref name="acscan_2014">{{citation |url=http://www.acscan.org/content/wp-content/uploads/2014/03/Prescription-Drug-Formulary-Basics-factsheet.pdf |title=Just the Facts: Prescription Drug Formularies |access-date=22 January 2016 |date=March 2014 |work=Cancer Action Network American Cancer Society (ACSCAN) |archive-date=19 April 2015 |archive-url=https://web.archive.org/web/20150419192324/http://www.acscan.org/content/wp-content/uploads/2014/03/Prescription-Drug-Formulary-Basics-factsheet.pdf }}</ref>
==AARP==
According to an AARP 2015 report, "All but 4 of the 46 therapeutic categories of specialty drug products had average annual retail price increases that exceeded the rate of general inflation in 2013. Price increases by therapeutic category ranged from 1.7 percent to 77.2 percent."<ref name="AARP_2015_nov">{{cite web | url=http://www.aarp.org/content/dam/aarp/ppi/2015/rx-price-watch-specialty-prescription-drug-prices-continue-to-climb-final.pdf | title=Trends in Retail Prices of Specialty Prescription Drugs Widely Used by Older Americans, 2006 to 2013 | publisher=AARP | date=November 2015 | access-date=23 January 2016 | author1=Schondelmeyer, Stephen W. | author2=Purvis, Leigh}}</ref>
===Risk evaluation and mitigation strategies (REMS)=== {{Main|Risk Evaluation and Mitigation Strategies}} On September 27, 2007 President George W. Bush amended the Food and Drug Administration Amendments Act of 2007 (FDAAA) to authorize the FDA to require Risk Evaluation and Mitigation Strategies (REMS) on medications if necessary to minimize the risks associated with some drugs". These medications were designated as specialty drugs and required specialty pharmacies. When the FDA approves a new drug they may require a REMS program which "may contain any combination of 5 criteria: Medication Guide, Communication Plan, Elements to Assure Safe Use, Implementation System, and Timetable for Submission of Assessments".<ref name="RX_Wiki">{{cite web | url=http://rx-wiki.org/index.php?title=Risk_evaluation_and_mitigation_strategies | title=Risk evaluation and mitigation strategies | publisher=RX Wiki | date=10 February 2015 | access-date=5 November 2015}}</ref> "In 2010, 48% of all new molecular entities, and 60% of all new specialty drug approvals, required a REMS program." Risk-reduction mechanisms can include the "use of specialized distribution partners".<ref name="pharmaceuticalcommerce">{{cite web | url=http://www.pharmaceuticalcommerce.com/brand_communications?articleid=2389%22%20%5Ct%20%22_blank | title=With a Few Stumbles, REMS Begins to Hit Its Stride | work=Pharmaceutical Commerce | date=22 April 2011 | access-date=5 November 2015 | author=Shelley, Suzanne | archive-url=https://web.archive.org/web/20160129174603/http://www.pharmaceuticalcommerce.com/brand_communications?articleid=2389%22%20%5Ct%20%22_blank | archive-date=29 January 2016 }}</ref>
===Breakthrough therapy===
In 2013 the FDA introduced the breakthrough therapy designation program which cut the development process of new therapies by several years. This meant that the FDA could "introduce important medicines to the market based on very promising phase 2 rather than phase 3 clinical trial results". Shortly after the law was enacted, Ivacaftor, in January 2013, became the first drug to receive the breakthrough therapy designation.<ref name="ahdbonline">{{cite journal | url=http://www.ahdbonline.com/issues/2014/march-2014-volume-7-special-feature-fifth-annual-payers-guide-to-new-fda-approvals/1704-specialty-drugs-top-the-trends-in-the-2014-pipeline | title=Specialty Drugs Top the Trends in the 2014 Pipeline Special Feature Fifth Annual Payers' Guide to New FDA Approvals | journal=American Health & Drug Benefits Via Engage Healthcare Communications, LLC. Affiliate of the Lynx Group | date=March 2014 | access-date=26 October 2015 |first=Dalia |last=Buffery |volume=7}}</ref>
On February 3, 2015 New York-based Pfizer's drug Ibrance was approved through the FDA's Breakthrough Therapy designation program as a treatment for advanced breast cancer.<ref>{{cite web | url = http://www.onclive.com/web-exclusives/FDA-Approves-Palbociclib-for-Metastatic-Breast-Cancer | title = FDA Approves Palbociclib for Metastatic Breast Cancer | publisher = OncLive | date = 3 Feb 2015}}</ref> It can only be ordered through specialty pharmacies and sells for "$9,850 for a month or $118,200 per year".<ref name="ctv">{{cite web | url=https://www.ctvnews.ca/health/article/fda-approves-pfizer-drug-to-treat-breast-cancer-in-postmenopausal-women/ | title=FDA approves Pfizer drug to treat breast cancer in postmenopausal women| work=CTV News|agency=Associated Press | date=3 February 2015 | access-date=16 November 2017}}</ref> According to a statement by the New York-based Pfizer the price "is not the cost that most patients or payors pay" since most prescriptions are dispensed through health plans, which negotiate discounts for medicines or get government-mandated price concessions.<ref name="ctv" />
===Trends in spending in the United States=== According to Express Scripts,<ref name="Express_Scripts_2014" /> {{quote|"[T]he pharmacy landscape [in the United States] underwent a seismic change, and the budgetary impact to healthcare payers was significant. U.S. prescription drug spend increased 13.1% in 2014 – the largest annual increase since 2003 – and this was largely driven by an unprecedented 30.9% increase in spending on specialty medications. Utilization of traditional medications stayed flat (-0.1%), while the use of specialty drugs increased 5.8%. The largest factors contributing to the increased spending, however, were the price increases for these medication categories – 6.5% for traditional and 25.2% for specialty. While specialty medications represent only 1% of all U.S. prescriptions, these medications represented 31.8% of all 2014 drug spend – an increase from 27.7% in 2013."|Express Scripts Drug Trend Report}}
By 2015 "specialty medications account for one-third of all spending on drugs in the United States, up from 19 percent in 2004 and heading toward 50 percent in the next 10 years, according to IMS Health, which tracks prescriptions".<ref name="nytimes.com_2015_07_16" /> The specialty pharmacy business had $20 billion in sales in 2005. By 2014 it had grown to "$78 billion in sales".<ref name="nytimes.com_2015_07_16" /> In Canada by 2013 "specialty drugs made up less than 1.3 percent of all Canadian prescriptions, but accounted for 24 percent of Canada's total spending on prescription drugs".<ref name="express-scripts">{{cite web | url=http://www.express-scripts.ca/news-room/specialty-drug-spend-unsustainable-according-express-scripts-canadas-drug-trend | title=Specialty Drug Spend Unsustainable According to Express Scripts Canada's Drug Trend Report Employers May Become Unable to Afford Comprehensive Employee Drug Benefits | date=28 May 2014 | access-date=5 October 2015 | location=Mississauga, Ontario | archive-date=30 January 2017 | archive-url=https://web.archive.org/web/20170130205927/http://express-scripts.ca/news-room/specialty-drug-spend-unsustainable-according-express-scripts-canadas-drug-trend }}</ref>
When Randy Vogenberg of the Institute for Integrated Healthcare in Massachusetts and a co-leader of the Midwest Business Group initiative, began investigating specialty drugs in 2003, it "wasn't showing up on the radar". By 2009 specialty drugs had started doubling in cost and payers such as employers began to question.<ref name="workforce.com">{{cite web | url=http://www.workforce.com/articles/specialty-drugs-appearing-as-the-next-wave-of-health-care-costs | title=Specialty Drugs Appearing as the Next Wave of Health Care Costs | publisher=Workforce | date=28 September 2012 | access-date=5 October 2015}}</ref> Vogenberg observed that by 2014 health care reform had changed the landscape for specialty drugs. There is a shift away from a marketplace based on a predominately clinical perspective, to one that puts economics first and clinical second.<ref name="IMS_Health_commercial_2014" />{{rp|15}}
Many factors contribute to the continuing increase in price of specialty drugs. Development of specialty drugs not only costs more, but they also take longer to develop than other large market pharmaceuticals<ref>{{Cite journal|last1=Mailankody|first1=Sham|last2=Prasad|first2=Vinay|date=2016-07-19|title=Implications of Proposed Medicare Reforms to Counteract High Cancer Drug Prices|journal=JAMA|language=en|volume=316|issue=3|pages=271–272|doi=10.1001/jama.2016.5998|pmid=27149663|issn=0098-7484}}</ref> (See Drug development). In addition, there are often fewer drug choices for rare or hard-to-treat diseases.<ref>{{Cite journal|last=Simoens|first=Steven|date=2011-06-17|title=Pricing and reimbursement of orphan drugs: the need for more transparency|journal=Orphanet Journal of Rare Diseases|volume=6|page=42|doi=10.1186/1750-1172-6-42|issn=1750-1172|pmc=3132155|pmid=21682893 |doi-access=free }}</ref> This results in less competition in the marketplace for these drugs due to patent protection, which allows these firms to act as monopolists (See Drug Price Competition and Patent Term Restoration Act). Due to this lack of competition, policies that serve to limit prices in other markets can be ineffective or even counter-productive when applied to specialty drugs.<ref>{{Cite journal|last1=Huntington|first1=Scott F.|last2=Davidoff|first2=Amy J.|date=2016-11-14|title=High-Cost, High-Value Oral Specialty Drugs: More Evidence on the Impact of Cost Sharing in Medicare Part D|journal=Journal of Clinical Oncology|volume=34|issue=36|pages=4307–4309|doi=10.1200/jco.2016.70.2738|pmid=27998230|issn=0732-183X}}</ref>
High prices for specialty drugs are a problem for both patients and payers. Patients frequently have difficulty paying for these medications, which can lead to lack of access to treatment.<ref>{{Cite journal|last1=Drummond|first1=Michael F.|author-link=Michael Frank Drummond|last2=Wilson|first2=David A.|last3=Kanavos|first3=Panos|last4=Ubel|first4=Peter|last5=Rovira|first5=Joan|date=January 2007|title=Assessing the economic challenges posed by orphan drugs|journal=International Journal of Technology Assessment in Health Care|language=en|volume=23|issue=1|pages=36–42|doi=10.1017/S0266462307051550|pmid=17234015|s2cid=8859350|issn=1471-6348}}</ref> Specialty drugs are now so expensive that they are leading to increases in insurance premiums.<ref>{{Cite journal|last=Barlas|first=Stephen|date=August 2014|title=Are Specialty Drug Prices Destroying Insurers and Hurting Consumers?|journal=Pharmacy and Therapeutics|volume=39|issue=8|pages=563–566|issn=1052-1372|pmc=4123806|pmid=25136254}}</ref> Control of specialty drug prices will require research to identify effective policy options, which may include: decreasing regulation, limiting patent protection, allowing negotiation of drug prices by Medicare, or pricing drugs based on their effectiveness.<ref>{{Cite journal|last1=Gronde|first1=Toon van der|last2=Groot|first2=Carin A. Uyl-de|last3=Pieters|first3=Toine|title=Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks|journal=PLOS ONE|volume=12|issue=8|article-number=e0182613|doi=10.1371/journal.pone.0182613|pmid=28813502|pmc=5559086|year=2017|bibcode=2017PLoSO..1282613G|doi-access=free}}</ref>
===Insurance payer definition===
In the United States, private insurance payers will favour a lower-cost agent preferring generics and biosimilars to the more expensive specialty drugs if there is no peer-reviewed or evidence-based justification for them.<ref name="IMS_Health_commercial_2014">{{cite web | url=https://www.imshealth.com/imshealth/Global/Content/Corporate/Press%20Room/IMS_Health_in_the_News/PharmaVOICE_2_2014_SpecialtyDrugs.PDF | title=Specialty Drugs: an evolving commercial model | publisher=IMS Health | date=February 2014 | access-date=5 October 2015}}</ref>
According to a 2012 report by Sun Life Financial the average cost of specialty drug claims was $10,753 versus $185 for non-specialty drugs and the cost of specialty drugs continues to rise. With such steep prices by 2012 specialty drugs represented 15-20% of prescription drug reimbursement claims.<ref name="Sun_Life_2012">{{cite web | url=http://www.cecorner.ca/lessons/A%20Discusson%20about%20Specialty%20Drugs%20(GB00210-E-03-14)%20-%20Final.pdf | title=A Discussion about Specialty Drugs | publisher=Sun Life Financial | date=2012 | access-date=5 October 2015 | archive-date=4 March 2016 | archive-url=https://web.archive.org/web/20160304041833/http://www.cecorner.ca/lessons/A%20Discusson%20about%20Specialty%20Drugs%20(GB00210-E-03-14)%20-%20Final.pdf }}</ref>
Patient advocacy groups that lobby for payment for specialty drugs include the Alliance for Patient Access (AfPA), formed in 2006 and which according to a 2014 article in the ''Wall Street Journal'' "represents physicians and is largely funded by the pharmaceutical industry. The contributors mostly include brand-name drug makers and biotechs, but some—such as Pfizer and Amgen—are also developing biosimilars."<ref name="wsj_2014">{{cite web | url=https://blogs.wsj.com/pharmalot/2014/08/15/physician-groups-side-with-big-drug-makers-over-biosimilar-names/ | title=Physician Groups Side With Big Drug Makers Over Biosimilar Names | work=Wall Street Journal | date=15 August 2014 | access-date=17 October 2015 | author=Silverman, Ed}}</ref>
In 2013 AfPA director David Charles published an article on specialty drugs in which he agreed with the findings of the Congressional Budget Office that spending on prescription medications "saves costs in other areas of healthcare spending".<ref name="thehill_2013">{{cite web | url=https://thehill.com/blogs/congress-blog/healthcare/189989-making-high-value-specialty-drugs-affordable-will-save-lives/ | title=Making high-value specialty drugs affordable will save lives and reduce healthcare costs | work=The Hill | date=13 November 2013 | access-date=17 October 2015 | author=Charles, David}}</ref> He observed that specialty drugs are so high priced that many patients do not fill prescriptions resulting in more serious health problems increasing. His article referred to specialty drugs such as "new cancer drugs specially formulated for patients with specific genetic markers".<ref name="thehill_2013" /> He explained the high cost of these "individualized medications based on diagnostic testing; and "biologics", or medicines created through biologic processes, rather than chemically synthesized like most pharmaceuticals".<ref name="thehill_2013" /> He argued that there should be a slight increase in co-pays for the more commonly using lower-tier medications to allow a lower co-pay for those who "require high-cost specialty tier medications".<ref name="thehill_2013" />
===Top specialty therapy classes and average prescription costs===
According to the 2014 Express Scripts Drug Trend Report,<ref name="Express_Scripts_2014">{{cite web | url=http://lab.express-scripts.com/drug-trend-report/ | title=Highest increase in U.S. drug spend over past decade | publisher=Express Scripts | date=2014 | access-date=5 October 2015}}</ref> the most significant increase in prescription drugs in the United States in 2014 was due to "increased inflation and utilization of hepatitis C and compounded medications".<ref name="Express_Scripts_2014" /> "Excluding those two therapy classes, overall drug spend would have increased only 6.4%.<ref name="Express_Scripts_2014" />
The cost of "the top three specialty therapy classes—inflammatory conditions, multiple sclerosis and oncology—contributed 55.9% of the spend for all specialty medications billed through the pharmacy benefit in 2014. The U.S. spent 742.6% more on hepatitis C medications in 2014 than it did in 2013; this therapy class was not among the top 10 specialty classes in 2013.<ref name="Express_Scripts_2014" />
==Specialty pharmacies==
As the market demanded specialization in drug distribution and clinical management of complex therapies, specialized pharma (SP) evolved.<ref name="UofW">{{cite web | url=https://courses.washington.edu/pharm542/Week4/slidesSpecialty%20Pharmacy%20%20Managed%20Care%20Strategies%200410.pdf | title=Specialty Pharmacy Managed Care Strategies | access-date=24 September 2015 | author=Murphy, Chad O.}}</ref> By 2001 CVS' specialty pharmacy ProCare was the "largest integrated retail/mail provider of specialty pharmacy services" in the United States.<ref name="cvshealth_2001"/>{{rp|10}} It was consolidated with their pharmacy benefit management company, PharmaCare in 2002 to In their 2001 annual report CVS anticipated that the "$16 billion specialty pharmacy market" would grow at "an even faster rate than traditional pharmacy due in large part to the robust pipeline of biotechnology drugs".<ref name="cvshealth_2001"/> By 2014 CVS Caremark, Express Scripts and Walgreens represented more than 50% of the specialty drug market in the United States.<ref name="imshealth"/>{{rp|4}}
The specialty pharmacy business had $20 billion in sales in 2005. By 2014 it had grown to "$78 billion in sales".<ref name="nytimes.com_2015_07_16" />
Specialty pharmacies came into existence to as a result of unmet needs. According to the National Comprehensive Cancer Network the "primary goals of specialty pharmacies are to ensure the appropriate use of medications, maximize drug adherence, enhance patient satisfaction through direct interaction with healthcare professionals, minimize cost impact, and optimize pharmaceutical care outcomes and delivery of information".<ref name="NCCN_2010">{{cite journal | title=NCCN Task Force Report: specialty pharmacy |volume=8 | journal= Journal of the National Comprehensive Cancer Network| date=2010 | author1=Schwartz, R. N. | author2=Eng, K.J. | author3=Frieze, D. A.|pages=S1-12 |doi=10.6004/jnccn.2010.0127 |pmid=20705807 | doi-access=free }}</ref>
McKesson Specialty Care Solutions, a division of McKesson Corporation, is "one of the largest distributors of specialty drugs, biologics and rheumatology drugs to community-based specialty practices". It is "a leader in the development, implementation and management of FDA-mandated Risk Evaluation and Mitigation Strategies (REMS) for manufacturers".<ref name="relayhealth_2011">{{cite web | url=http://www.relayhealth.com/news-and-events/press/ProStrakan-Chooses-RelayHealth-for-Approved-Abstral-REMS-Program-.html#sthash.GRwKE7Wc.dpuf | title=RelayHealth's pharmacy connectivity network and reach, aligned with McKesson Specialty Care Solutions' REMS expertise, expands cancer patients' access to pain therapy | date=20 January 2011 | access-date=5 November 2015 | location=Atlanta}}</ref> For example, in order ProStrakan Group plc, an international pharmaceutical company based in the UK works with McKesson Specialty Care Solutions to administer its FDA-approved Risk Evaluation and Mitigation Strategy (REMS) program for Abstral.<ref name="relayhealth_2011" />
URAC's Specialty Pharmacy Accreditation "provides an external validation of excellence in Specialty Pharmacy Management and provides Continuous Quality Improvement (CQI) oriented processes that improve operations and enhance compliance".<ref name="URAC">{{cite web | url=https://www.urac.org/accreditation-and-measurement/accreditation-programs/all-programs/specialty-pharmacy/ | title=Specialty Pharmacy | publisher=URAC | date=nd | access-date=5 October 2015}}</ref>
Specialty pharmaceuticals or biologics are a significant part of the treatment market, yet there is still additional work that should be done to manage costs. Defining biologics has been described as a matter of perspective, with variation between chemists, physicians, payers, microbiologists and regulators.<ref name="auto">Morrow, T., (2004). "Five Steps to Managing Biologics." ''Biotechnology Healthcare'', March: 6.</ref> A payer may define a biologic by cost, while a biochemist may look at composition and structure and a provider at means of delivery or action on the body.<ref name="auto"/> The FDA generally defines biologics as, "a wide range of products [that] ...can be composed of sugars, proteins, or nucleic acids or complex combinations of these substances, or may be living entities such as cells and tissues. Biologics are isolated from a variety of natural sources—human, animal, or microorganism—and may be produced by biotechnology methods and other cutting-edge technologies".<ref>Food and Drug Administration, (2015). "What Are "Biologics" Questions and Answers." ''www.fda.gov.'' August 05. [https://web.archive.org/web/20111124160726/http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CBER/ucm133077.htm]</ref>
Due to the complexity, risk of adverse events and allergic reactions associated with biologics, management is very important for the safety of patients.<ref name="auto1">Committee on Rheumatologic Care, (2015). ''The Complexity of Biologics and their Coverage and Payment.'' American College of Rheumatology</ref> Management includes areas from patient education and adherence to the delivery of the medication. These medications often require very specific storage conditions and monitoring of temperature, the level of agitation and proper reconstitution of the drug .<ref name="auto1"/> Because of the high risk of error and adverse events, provider management of delivery is required, especially for injection or infusion of some biologic medications. Such biologics are often coded in a way that ties reimbursement to delivery by a provider—either a specialty pharmacist or medical care provider with those skills.<ref name="auto2">Academy of Managed Care Pharmacy, (2006). ''Concept Series Paper on Specialty Pharmaceuticals.'' Academy of Managed Care Pharmacy, 4. http://amcp.org/WorkArea/DownloadAsset.aspx?id=9305.</ref> As more biologics are being designed to be self-administered pharmacists are supporting the management of these drugs. They make calls to remind patients of the need for refills, provide education to patients, monitor patients for adverse events and work with primary care provider offices to monitor the outcomes of the medication.<ref name="auto2"/>
The high cost of specialty pharmaceuticals is one of their defining characteristics; as such, cost-containment is high on the list of all the players in the arena. For physician-administered biologics, cost-containment is often handled by volume purchasing of biologic drugs for discounted pricing, formularies, step therapy to attempt other treatment before beginning biologics and administrative fees by insurers to keep physicians from artificially inflating requested reimbursement from insurance companies.<ref name="auto3">Petigara, T., Anderson, G., (2008). ''Strategies to reduce the high cost of biologics.'' Health Policy Monitor. http://www.hpm.org/survey/us/b12/3</ref><ref name="auto2"/><ref name="auto1"/> Cost-containment for self-administered biologics tends to occur via requiring authorization to be prescribed those drugs and benefit design, such as coinsurance for cost-sharing.<ref name="auto3"/><ref name="auto2"/>
The 21st Century Cures Act which addressed fast-tracking approval of specialty pharmaceuticals was particularly beneficial for dealing with the development of 2nd run biologics (which might be more easily understood as "generic biologics", though they do not exist).<ref name="auto4">O'Connor, M., (2016). "Real-world results determine value-based price for specialty drugs." ''Managed Healthcare Executive.'' July 01. </ref> Debate around the act raised some important questions about the efficacy of biologics and their continued high costs. Some call for insurers to pay only the cost of production to manufacturers until the benefit of these biologics can be proven long-term, stating that insurers should not bear the full cost of products that may be unreliable or have only limited efficacy.<ref name="auto4"/>
Achieving this would require conducting studies that assess value, such as comparative effectiveness studies and using those studies to determine pricing. Comparative effectiveness would examine all aspects of the use of biologics, from outcomes such as clinical benefits and potential harms, to efficiency of administration, public health benefits and patient productivity after treatment.<ref name="auto5">Ollendorf, D.A., Chapman, R., Khan, S., Russo, E.T., Synnott, P.G., Pearson, S.D., Carlson, J.J., Guzauskas, G.F., (2016). ''Treatment Options for Relapsed or Refractory Multiple Myeloma: Effectiveness, Value, and Value-Based Price Benchmarks.'' Boston: Institute for Clinical and Economic Review.</ref> This is a new direction in managing the high costs of specialty pharmaceuticals and not without challenges. One of the barriers is strict regulation by the Food and Drug Administration of what pharmaceutical manufacturers may communicate to the public, limiting that communication to formulary committees for managed care, for example.<ref name="auto6">{{cite journal | author = Perfetto E.M., Bailey Jr J.E., Gans-Brangs K.R., Romano S.J., Rosenthal N.R., Willke R.J. | year = 2012 | title = Communication about results of comparative effectiveness studies: a pharmaceutical industry view | journal = Health Affairs | volume = 31 | issue = 10| pages = 2213–2219 | doi = 10.1377/hlthaff.2012.0745 | pmid = 23048099 }}</ref> Additionally, studies tend to be constructed using observational design, instead of as randomized controlled trials, limiting their usefulness for real-world application.<ref name="auto6"/>
Difficulties experienced with patient adherence to specialty pharmaceuticals also limit the availability of real-world outcomes data for biologics.<ref name="auto4"/><ref name="auto2"/> In 2016, real world data evaluating the efficacy of biologics was only publicly available for multiple myeloma through ICER (where biologics were found to be overpriced for their outcomes)<ref name="auto5"/> and for hepatitis C treatment (which achieved high cure rates—90%—for patients co-infected with HIV and Hep C) through Curant Health.<ref name="auto4"/> These studies show how useful value-based pricing may become for cost-containment in the field. The good news is that there are effectiveness studies on biologics currently underway aiming to provide more of this data.<ref name="auto4"/>
==Regulation== Biologics or biological products for human use are regulated by the Center for Biologics Evaluation and Research (CBER), overseen by the Office of Medical Products and Tobacco, within the U.S. Food and Drug Administration which includes the Public Health Service Act and the Federal Food, Drug and Cosmetic Act.<ref name="FDA_CBER">{{cite web | url=https://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CBER/default.htm | archive-url=https://web.archive.org/web/20111124160147/http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CBER/default.htm | archive-date=November 24, 2011 | title=About the Center for Biologics Evaluation and Research (CBER) | publisher=U.S. Food and Drug Administration | date=26 March 2015 | access-date=11 October 2015 | location=Silver Spring, MD}}</ref> "CBER protects and advances the public health by ensuring that biological products are safe and effective and available to those who need them. CBER also provides the public with information to promote the safe and appropriate use of biological products."
==Specialty market participants== There are multiple players in specialty drugs including the employer, the health plan, the pharmacy benefits manager and it is unclear who should be in charge of controlling costs and monitoring care.<ref name="workforce.com" /> Pharmacies generally buy a product from a wholesaler and sell (Buy & Bill) it to the patient and provide basic drug use information and counseling. According to Maria Hardin, vice president of patient services for the National Organization for Rare Disorders, an alliance of voluntary health and patient advocacy groups working with rare diseases, "As the cost of drugs increases, management of the financial side has gotten more complex... The issues range from Medicare Part D to tiered benefits, prior authorizations, and no benefits. These patients need a pharmacy with the expertise and the clout to go to bat for them. If the patient doesn't get treated, the specialty pharmacy doesn't get paid."<ref name="drugtopics" />
Alexion Pharmaceuticals was one of the pioneers in the use of a business model of developing drugs to combat rare diseases. "Knowing the value of specialty drugs as well as its own stock is Alexion's business."<ref name=NYT /> Since other big pharmaceutical companies had tended to ignore these markets, Alexion had minimal competition at first. Insurance companies have generally been willing to pay high prices for such drugs; since few of their customers need the drugs, a high price does not significantly impact the insurance companies outlays.<ref name=NYT>{{cite news|title=Alexion Puts Its Soaring Stock Price to Good Use|date=May 6, 2015|url=https://www.nytimes.com/2015/05/07/business/dealbook/alexion-puts-its-soaring-stock-price-to-good-use.html|access-date=May 7, 2015|work=The New York Times|author=Robert Cyran}}</ref> Alexion is thus seeking a stronger position in the lucrative rare disease market, and is willing to pay a premium to obtain that position.<ref name=WSJ /><ref name=NYT /> The rare disease market is seen as desirable because insurers have minimal motive to deny claims (due to small population sizes of patients) and are unable to negotiate better drug prices due to lack of competition. of May 2015, Alexion is currently seeking approval of its second drug, Strensiq. It will be used to treat hypophosphatasia, a rare metabolic disorder. In 2015 Alexion estimated that Synageva, its specialty drug for lysosomal acid lipase deficiency, a fatal genetic disorder, could eventually have annual sales of more than $1 billion.<ref name=WSJ /><ref name=AP>{{cite news|title=Biotech blastoff: Synageva up 112% on $8B Alexion deal|agency=AP|author=Tom Murphy|work=USA Today|url=https://www.usatoday.com/story/money/business/2015/05/06/alexion-synageva/70909976/|date=May 7, 2015|access-date=May 7, 2015}}</ref>
Companies like Magellan RX Management provide a "single source for high-touch patient care management to control side effects, patient support and education to ensure compliance or continued treatment, and specialized handling and distribution of medications directly to the patient or care provider. Specialty medications may be covered under either the medical or pharmacy benefit."<ref name="magellanrx_2015" />
According to an article published in 2014 in the journal ''Pharmacoeconomics'',<ref name="Pharmacoeconomics_2014" /> "[s]pecialty pharmacies combine medication dispensing with clinical disease management. Their services have been used to improve patient outcomes and contain costs of specialty pharmaceuticals. These may be part of independent pharmacy businesses, retail pharmacy chains, wholesalers, pharmacy benefit managers, or health insurance companies. Over the last several years, payers have been transitioning to obligate beneficiaries to receive self-administered agents from contracted specialty pharmacies, limiting the choice of acceptable specialty pharmacy providers (SPPs) for patient services."<ref name="Pharmacoeconomics_2014" />
===Health plans and pharmacy benefit managers=== Managed care organizations contract with Specialty Pharmacy vendors. "Managed care organizations (MCOs) are using varied strategies to manage utilization and costs. For example, 58% of 109 MCOs surveyed implement prior authorizations for MS specialty therapies."<ref name="Pharmacoeconomics_2014">{{cite journal |journal=PharmacoEconomics |date= 14 August 2014 |volume= 32 |number=11 |pages=1105–1114 |doi=10.1007/s40273-014-0196-0 |title=A Review of Approaches for the Management of Specialty Pharmaceuticals in the United States |author1=Patel, Bijal Nitin |author2=Audet, Patricia R. Audet |pmc=4209107 |pmid=25118989}}</ref> The Academy of Managed Care Pharmacy (AMCP) designates a product as a specialty drug if "[i]t requires a difficult or unusual process of delivery to the patient (preparation, handling, storage, inventory, distribution, Risk Evaluation and Mitigation Strategy (REMS) programs, data collection, or administration) or, Patient management prior to or following administration (monitoring, disease or therapeutic support systems)".<ref name="definition AMCP">{{cite web | url=http://www.drugchannels.net/2013/02/defining-specialty-pharmacy.html | title=Defining Specialty Pharmacy | work=Pembroke Consulting | date=5 February 2013 | access-date=24 September 2015 | author=Fein, Adam J.}}</ref> Health plans consider "high cost" (on average a minimum monthly costs of $US1,200) to be is a determining factor in identifying a specialty drug.<ref name="definition AMCP" />
===Independent specialty pharmacies===
Tom Westrich, of St. Louis, Missouri-based Centric Health Resources, a specialty pharmacy, described how their specialty drugs treat ultra-orphan diseases with a total patient population of 20,000 nationwide.<ref name="drugtopics">{{cite web | url=http://drugtopics.modernmedicine.com/drug-topics/news/modernmedicine/modern-medicine-feature-articles/rarest-orphan-drugs-find-specialty-?page=full | title=The rarest of orphan drugs find a specialty-pharmacy distributor | date=1 May 2009 | access-date=24 September 2015 | author=Gebhart, Fred}}</ref>
===Retail pharmacies=== The top ten specialty pharmacies in 2014 were CVS Specialty parent company CVS Health with $20.5B in sales, Express Scripts's Accredo at $15B, Walgreens Boots Alliance's Walgreens Specialty at $8.5B, UnitedHealth Group's OptumRx at $2.4B, Diplomat Pharmacy at $2.1B, Catamaran's BriovaRx at $2.0B, Specialty Prime Therapeutics's Prime Therapeutics at $1.8B, Omnicare's Advanced Care Scripts at $1.3B, Humana's RightsourceRx at $1.2B, Avella at $0.8B. All the other specialty pharmacies accounted for $22.4B of sales in 2014 with a total of $78B.<ref name="nytimes2015_07_15_biggest">{{cite web | url=https://www.nytimes.com/interactive/2015/07/16/business/specialty-pharmacy-top10list.html | title=The Biggest in a Booming Pharmacy Field | work=New York Times | date=15 July 2015 | access-date=5 October 2015}}</ref>
===Hospitals and physicians=== In 2010 the United States enacted a new health law which had unintended consequences. Because of the 2010 law, drug companies like Genentech informed children's hospitals that they would no longer get discounts for certain cancer medicines such as the orphan drugs Avastin, Herceptin, Rituxan, Tarceva, or Activase. This cost hospitals millions of dollars.<ref name="NYT_2010_Dec_8">{{cite web | url=https://www.nytimes.com/2010/12/08/health/policy/08health.html | title=Children's Hospitals Lose Some Drug Discounts | work=New York Times | date=7 December 2010 | access-date=26 October 2015 | author=Pear, Robert}}</ref>
There is a debate about whether specialty drugs should be managed as a medical benefit or a pharmaceutical benefit. Infused or injected medications are usually covered under the medical benefit and oral medications are covered under the pharmacy benefit. Self-injected medications may be either.<ref name="managedcaremag_2015">{{cite web | url=http://www.managedcaremag.com/archives/2015/1/should-specialty-drugs-be-shifted-medical-pharmacy-benefit | title=Should Specialty Drugs Be Shifted From Medical to Pharmacy Benefit? | publisher=Managed Care Magazine | date=2015 | access-date=5 October 2015 | author=Wehrwein, Peter}}</ref> "Many biologics, such as chemotherapy drugs, are administered in a doctor's office and require extensive monitoring, further driving up costs."<ref name="workforce.com" /> Chemotherapy is usually delivered intravenously, although a number of agents can be administered orally (e.g. specialty drugs, melphalan (trade name Alkeran), busulfan, capecitabine). Delcath Systems, Inc. (NASDAQ: DCTH) a specialty pharmaceutical and medical device company manufactures melphalan.<ref name="news-medical.net_2015">{{citation | url=http://www.news-medical.net/news/20150720/Melphalan-granted-FDA-Orphan-Drug-Designation-for-treatment-of-cholangiocarcinoma.aspx | title=Melphalan granted FDA Orphan Drug Designation for treatment of cholangiocarcinoma | work=News-Medical.Net | access-date=6 October 2015 | date=20 July 2015}}</ref>
By 2011 the oral medications for cancer patients represented approximately 35% of cancer medications. Prior to the increase in cancer oral drugs community cancer centers were used to managing office-administered chemotherapy treatments. At that time "the majority of community oncology practices were unfamiliar with the process of prescribing and obtaining drugs that are covered under the pharmacy benefit" and "conventional retail pharmacy chains were ill-prepared to stock oral oncology agents, and were not set up to deliver the counseling that often accompanies these medications".<ref name="Hematology_Oncology">{{cite journal | url=http://jhoponline.com/innovations-in-oncology-management/part-6/16444-specialty-pharmacy-services-an-overview-for-oncology-practices | title=Specialty Pharmacy Services: An Overview for Oncology Practices | journal=The Journal of Hematology Oncology Pharmacy | date=29 July 2015 | access-date=6 October 2015 | volume=2 | number=2 | issn=2164-1161 | archive-url=https://web.archive.org/web/20151007174643/http://jhoponline.com/innovations-in-oncology-management/part-6/16444-specialty-pharmacy-services-an-overview-for-oncology-practices | archive-date=7 October 2015 }}</ref>
== U.S. national market share == According to IMS Health "Specialty pharmaceutical spending is on the rise and is expected to increase from approximately $55 billion in 2005 to $1.7 trillion in 2030, according to the Pharmaceutical Care Management Association. That reflects an increase from 24% of total drug spend in 2005 to an estimated 44% of a health plan's total drug expenditure in 2030."<ref name="imshealth"/>
===Mergers and acquisitions among specialty pharmacies=== While CVS, Accredo, and Walgreens led the Specialty Pharmacies (SP) market in revenue in 2014, there are constant changes through mergers and acquisitions in terms of SPs and specialty distributors (SDs).<ref name="healthstrategies_May_2015">{{cite web | url=http://www.healthstrategies.com/blog/specialty-pharmacies-and-specialty-distributors-strengths-and-weaknesses | title=Specialty pharmacies and specialty distributors: strengths and weaknesses | work=Health Strategies | date=8 May 2015 | access-date=5 October 2015}}</ref> The SP/SD network faces common strengths such as "in-depth clinical management, coordinated/comprehensive care, and early limited distribution network success" and common weaknesses, "lack of ability to customize services, poor integration experience and outcomes, and strained pharma relations".<ref name="healthstrategies_May_2015" /> BioScrip was acquired by Walgreens in 2012.<ref name="pjsolomon_2012">{{cite web | url=http://www.pjsolomon.com/announcements/walgreen-co-to-acquire-bioscrip-s-specialty-pharmacies-and-mail-service-businesses | title=Walgreen Co to acquire BioScrip's Specialty Pharmacies | publisher=Peter J. Solomon Company | date=2 February 2012 | access-date=5 October 2015}}</ref> Specialty companies like Genzyme and MedImmune were acquired and are transitioning to a new business model.<ref name="IMS_Health_commercial_2014" />{{rp|12}}
===Specialty hubs=== According to Nicolas Basta, by 2013 there was "a spate of new entities" called hub services, "mechanisms by which manufacturers can keep a grip on the marketplace" in specialty pharma. The "biggest and oldest of these organizations" are "offshoots of insurance companies or [Pharmacy benefit managers] PBMs, such as Express Scripts' combination of Accredo and CuraScript (both specialty pharmacies) and HealthBridge (physician and patient support). UnitedHealth, an insurance company, operates OptumRx, a PBM, which has a specialty unit within it. Cigna has Tel-Drug, a mail-order pharmacy and support system."<ref name="Pharmaceutical_Commerce_2013">{{cite web | url=http://pharmaceuticalcommerce.com/special_report?articleid=26972 | title=Finding the 'HUB' in Specialty Pharma Services | work=Pharmaceutical Commerce | date=18 September 2013 | access-date=5 October 2015 | author=Basta, Nicholas}}</ref> Basta described how Hubs have been around since about 2002 "starting out as "reimbursement hubs"", usually provided as a service by manufacturers to help patients and providers navigate the process of obtaining permission to use, and reimbursement for, expensive specialty therapies". Industry observers look to pioneering efforts by Genentech and Genzyme under the tenure of Henri Termeer, "when some of their earliest biotech products entered the marketplace".<ref name="Pharmaceutical_Commerce_2013" /> Specialty hubs provide reimbursement support to physicians and patients as well as patient education including medical hotlines. There is a voluntary program enrollment and registry intake with Patient Assistance Program management.
===Affordability of specialty drugs and patient compliance with care plan===
According to a 2007 study by employees of Express Scripts or its wholly owned subsidiary CuraScript on specialty pharmacy costs, if payers manage cost control through copayments with patients, there is an increased risk that patients will forego essential but expensive specialty drugs.<ref name="compliance_2007">{{cite journal |author1=Miller, Steve B.|author2=Tracy A. Hoffman |author3=Jonah C. Houts |author4=Jane L. Miller |author5=Britton L. Pim |author6=Andrew Behm. |s2cid=74184770 |title=The Rise of Specialty Pharmacy Costs: Issues for Providers, Payers, and Patients |journal=Disease Management and Health Outcomes |volume=15 |number= 2 |date=April 2007 |pages=83–89|doi=10.2165/00115677-200715020-00003}}</ref>{{rp|6}} and health outcomes were compromised.<ref name="Shrank_history" />{{rp|69}} In 2007 these researchers suggested in the adoption of formularies and other traditional drug-management tools. They also recommended specialty drug utilization management programs that guide treatment plans and improve outpatient compliance.<ref name="compliance_2007" />{{rp|88}}
==== Price inflation controversies ====
By 2010 Alexion Pharmaceuticals's Soliris, was considered to be the most expensive drug in the world.<ref name="Forbes_2010" />
In a 2012 article in the ''New York Times,'' journalist Andrew Pollack described how Don M. Bailey, a mechanical engineer by training who became interim president of Questcor Pharmaceuticals, Inc. (Questcor) in May 2007, initiated a new pricing model for Acthar in August 2007<ref name="businesswire_2007">{{cite web | url=http://www.businesswire.com/news/home/20070827005278/en/Questcor-Board-Approves-Strategy-Business-Model-H.P.#.Vhq4A_lViko | title=Questcor Board Approves New Strategy and Business Model for H.P. Acthar Gel | work=Business Wire | date=27 August 2007 | access-date=11 October 2015}}</ref> when it was classified by FDA as an orphan drug and a specialty drug to treat infantile spasms.<ref name="NYT_30_December_2012">{{cite web | url=https://www.nytimes.com/2012/12/30/business/questcor-finds-profit-for-acthar-drug-at-28000-a-vial.html | title=Questcor Finds Profits, at $28,000 a Vial | work=New York Times | date=29 December 2012 | access-date=11 October 2015 | author=Pollack, Andrew}}</ref> Questcor, a biopharmaceutical company, focuses on the treatment of patients with "serious, difficult-to-treat autoimmune and inflammatory disorders". Its primary product is FDA-approved Acthar, an injectable drug that is used for the treatment of 19 indications.<ref name="forbes_2013a">{{cite web | url=https://www.forbes.com/companies/questcor-pharmaceuticals/ | title=Questcor Pharmaceuticals on Forbes Lists #1 America's Best Small Companies (2013) | work=Forbes | date=October 2013 | access-date=11 October 2015}}</ref> At the same time Questcor created "an expanded safety net for patients using Acthar", provided a "group of Medical Science Liaisons to work with health care providers who are administering Acthar" and limited distribution to its sole specialty distributor, Curascript. The 2007 pricing model brought "Acthar in line with the cost of treatments for other very rare diseases".<ref name="businesswire_2007" /> The cost for a course of treatment in 2007 was estimated at about "$80,000–$100,000".<ref name="businesswire_2007" /> Acthar is now manufactured through a contractor on Prince Edward Island, Canada.<ref name="forbes_2013a" /> The price increased from $40 a vial to $700 and continued to increase.<ref name="NYT_30_December_2012" /> By 2012 the price of a vial of Acthar was $28,400.<ref name="NYT_30_December_2012" /> and was considered to be one of the world's most expensive drugs in 2013.
By 2014 the price of Gilead's specialty drug for hepatitis C, Sovaldi or ''sofosbuvir'', was $84,000 to $168,000 for a course of treatment in the U.S., £35,000 in the UK for 12 weeks.<ref name="NYT_sovaldi">{{cite news |url=https://www.nytimes.com/2014/09/16/business/international/maker-of-hepatitis-c-drug-strikes-deal-on-generics-for-poor-countries.html?_r=0 |title=Maker of Costly Hepatitis C Drug Sovaldi Strikes Deal on Generics for Poor Countries |work=New York Times |date=15 September 2014 |last1=Harris |first1=Gardiner }}</ref> Sovaldi is on the World Health Organization's most important medications needed in a basic health system and the steep price is highly controversial.<ref name="WHO_sovaldi">{{cite web |url=https://www.who.int/medicines/publications/essentialmedicines/EML2015_8-May-15.pdf |title=Essential Medicines WHO Model List, 19th edition, April 2015 |publisher=World Health Organization|date=2015 }}</ref><ref name="Stanton_2013">{{cite web|last=Stanton|first=Tracy|title=Activists pounce on $1,000-a-day price for Gilead's hep C wonder drug, Sovaldi |url=http://www.fiercepharma.com/story/activists-pounce-1000-day-price-gileads-hep-c-wonder-drug-sovaldi/2013-12-09|work=FiercePharma|date=9 December 2013 |publisher=Fierce|access-date=22 February 2014}}</ref><ref name="Waldman">{{cite web|last=Waldman|first=Ron|title=Gilead's HCV drug sofosbuvir approved by the FDA but accessible for how many?|url=http://doctorsoftheworld.org/wp-content/uploads/2013/07/Gileads-HCV-drug-sofosbuvir-approved-but-accessible-for-how-many-09DEC2013.pdf|publisher=Doctors of the World|access-date=22 February 2014|archive-url=https://web.archive.org/web/20140226224657/http://doctorsoftheworld.org/wp-content/uploads/2013/07/Gileads-HCV-drug-sofosbuvir-approved-but-accessible-for-how-many-09DEC2013.pdf|archive-date=26 February 2014}}</ref> In 2014 the U.S. spent 742.6% more on hepatitis C medications than it did in 2013.<ref name="Express_Scripts_2014" />
In September 2015, Martin Shkreli was criticized by several health organizations<ref name="m.snopes">{{cite web|url=http://m.snopes.com/2015/09/21/daraprim/|title=Daraprim Price Hike Controversy|work=snopes.com|date=21 September 2015 }}</ref> for obtaining manufacturing licenses on old, out-of-patent,<ref name="sciencemag">{{cite web|url=https://www.science.org/content/blog-post/martin-shkreli-has-one-idea-and-it-s-bad-one|title=Martin Shkreli Has One Idea, And It's a Bad One|work=sciencemag.org}}</ref> life-saving medicines including pyrimethamine (brand name ''Daraprim''), which is used to treat patients with toxoplasmosis, malaria, some cancers, and AIDS,<ref name=CNNMeet>{{cite web|last1=Long|first1=Heather|last2=Egan|first2=Matt|last3=Dodley|first3=Dominique|title=Meet the guy behind the $750 AIDS drug|url=https://money.cnn.com/2015/09/22/investing/aids-drug-martin-shkreli-750-cancer-drug/|archive-url=https://web.archive.org/web/20150924223252/http://money.cnn.com/2015/09/22/investing/aids-drug-martin-shkreli-750-cancer-drug|url-status=dead|archive-date=September 24, 2015|website=Money.CNN.com|access-date=September 23, 2015|date=September 22, 2015}}</ref> and then increasing the price of the drug in the US from $13.50 to $750 per pill, a 5,455% increase.<ref name=NYTOvernight>{{cite news | agency = The New York Times | url = https://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html| title = Drug Goes From $13.50 a Tablet to $750, Overnight| work = The New York Times| date = Sep 20, 2015| last1 = Pollack| first1 = Andrew}}</ref><ref>{{cite web|url=http://digg.com/2015/martin-shkreli-daraprim-turing-pharmaceuticals|title=Martin Shkreli Will No Longer Price-Gouge AIDS Patients—What To Read|work=digg.com|date=22 September 2015 }}</ref> In an interview with ''Bloomberg News'', Shkreli claimed that despite the price increase, patient co-pays would be lower, that many patients would get the drug at no cost, that the company has expanded its free drug program, and that it sells half of the drugs for one dollar.<ref name="bloomberg">[https://www.bloomberg.com/news/videos/2015-09-21/why-turing-increased-price-of-daraprim-over-500- "Drug Goes From $13.50 to $750 Overnight"] ''Bloomberg News'', 2:30, retrieved September 23, 2015</ref><ref name="Twitter_Clinton">{{cite web | title=Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. | publisher=Twitter | date=21 September 2015 | author=Hillary Clinton}}</ref>
===Captive pharmacies=== In 2015 Bloomberg News used the term 'captive pharmacies' to describe the alleged exclusive agreements such as that between the specialty mail-order pharmacy Philodor and Valeant, mail-order pharmacy Linden Care and Horizon Pharma Plc. In November 2015 Express Scripts Holding Co.—the largest U.S. manager of prescription drug benefits—"removed the mail-order pharmacy Linden Care LLC from its network after concluding it dispensed a large portion of its medications from Horizon Pharma Plc and didn't fulfill its contractual agreements". Express Scripts was "evaluating other 'captive pharmacies' that it said are mostly distributing Horizon drugs". In 2015 specialty pharmacies like "Philidor drew attention for the lengths they went to fill prescriptions with brand-name drugs and then secure insurance reimbursement.<ref name="bloomberg_2015_Valeant" />
==Trans-Pacific Partnership== {{main|Trans-Pacific Partnership}} According to Pfenex, a clinical-stage biotechnology company, the proposed terms in the Trans-Pacific Partnership, a trade agreement between twelve Pacific Rim countries, meant that all participating countries had to adopt the United States' lengthy drug patent exclusivity protection period of 12 years for biologics and specialty drugs.<ref name="pfenex">{{cite web | url=http://www.pfenex.com/how-proposed-tpp-regulations-stand-in-the-way-of-patient-access/ | title=How Proposed TPP Regulations Stand in the Way of Patient Access | publisher=Pfenex | date=23 September 2015 | access-date=11 October 2015}}</ref>
==Popular culture==
In 1981 an episode of the television series ''Quincy, M.E.'' starring star, Jack Klugman as Quincy, entitled "Seldom Silent, Never Heard" brought the plight of children with orphan diseases to public attention. In the episode, Jeffrey, a young boy with Tourette syndrome, died after falling from a building. Dr. Arthur Ciotti (Michael Constantine), a medical doctor who had been researching Tourette syndrome for years wanted to study Jeffrey's brain to discover the cause and cure for the rare disease. He explained to Quincy that drug companies, like the one where he worked, were not interested in doing the research because so few people were afflicted with them that it was not financially viable.<ref name="tv_com">{{cite web | url=http://www.tv.com/shows/quincy-me/seldom-silent-never-heard-42316/ | title=Seldom Silent, Never Heard | work=TV | date=27 October 1982 | access-date=26 October 2015}}</ref> In 1982 another episode "Give Me Your Weak" Klugman as Quincy testified before Congress in an effort to get the Orphan Drug Act passed. He was moved by the dilemma of a young mother with myoclonus.<ref name="Forbes_2010" /><ref name="erickson_seldom">{{cite web |last=Erickson |first=Hal |author-link=Hal Erickson (author) |url=http://www.allmovie.com/work/quincy-me-seldom-silent-never-heard-447589 |title=Quincy, M.E.: Seldom Silent, Never Heard (1981) - Jeffrey Hayden; Synopsis, Characteristics, Moods, Themes and Related |at=Overview |website=AllMovie |publisher=All Media Network |access-date=2010-06-07 }}</ref><ref name="erickson_give">{{cite web |last=Erickson |first=Hal |author-link=Hal Erickson (author) |url=http://www.allmovie.com/work/quincy-me-give-me-your-weak-447621 |title=Quincy, M.E.: Give Me Your Weak (1982) - Georg Fenady; Synopsis, Characteristics, Moods, Themes and Related |at=Overview |website=AllMovie |publisher=All Media Network |access-date=7 June 2010 }}</ref><ref name="Klugman_1983">{{citation |url=https://news.google.com/newspapers?id=4B8MAAAAIBAJ&dq=klugman%20orphan-drug&pg=4782%2C2290336 |title=Jack Klugman calls it quits after seven seasons as 'Quincy' |work=St. Petersburg Times |date=3 July 1983}}</ref><ref name="Klugman_retires">{{citation |url=https://news.google.com/newspapers?id=M94qAAAAIBAJ&dq=klugman%20orphan-drug&pg=4422%2C3068432 |title=Klugman winds up his 'Quincy' career |work=The Deseret News |date=23 March 1983}}</ref>
== Further reading ==
* [https://www.cbo.gov/system/files/2019-03/54964-Specialty_Drugs.pdf "Prices for and Spending on Specialty Drugs in Medicare Part D and Medicaid"]. ''Report from the Congressional Budget Office''. March 18, 2019.
==References== {{reflist|25em}}
Category:Biotechnology Category:Biotechnology products Category:Biopharmaceuticals Category:Life sciences industry Category:Specialty drugs