By Jeni Hayes, PharmD, BCPS
Vizient Senior Clinical Manager, Pharmacy Outcomes
Given the incredible amounts of time and money invested in this segment of the healthcare market, it is important for key stakeholders to understand what medications are classified as specialty. Interestingly, there has been no universally accepted definition for specialty medications published. So, while most of these medications have high price tags, other aspects are considered when determining if a drug should be classified as a specialty medication, including disease state, medication attributions, high touch and high cost.
Disease state: Specialty medications treat complex and/or chronic medical conditions, many of which are progressive and have long-term or severe symptoms, side effects or increased risk of fatality. These disease states are managed by specialists and have complex treatment regimens that require ongoing clinical monitoring and patient education. In addition to orphan drugs used to treat rare diseases, these disease states often include cancer; infectious conditions, such as HIV/AIDS and Hepatitis C; neurologic conditions, such as multiple sclerosis and epilepsy; autoimmune or inflammatory conditions, such as atopic dermatitis; Crohn’s disease; rheumatoid arthritis; and pulmonary conditions, such as cystic fibrosis and pulmonary arterial hypertension.
Medication attributions: Medications that have special handling, storage or delivery requirements necessitate much closer supply chain management than traditional oral solid dosage forms due to their biologic nature. Biologic medications, such as monoclonal antibodies, are large molecules derived from living organisms that are temperature sensitive and must be handled with care and shipped in a manner that ensures they are intact upon arrival to the patient. Many self-administered injectable medications must be handled and shipped with care in addition to educating the patient on how to handle, store and administer those medications.
High touch: Specialty medications require extensive patient management, education and monitoring. These medications require detailed drug interaction evaluation, in-depth patient education, adherence monitoring, side effect mitigation and management, and often injection technique education. Given the importance of compliance with these therapies, patients benefit from access to, and regular contact with, their specialty pharmacy team.
High cost: Payers often set a certain cost threshold for considering a medication to be specialty. For calendar year 2023, the Centers for Medicare and Medicaid set their cost threshold at $830 for a 30-day supply for medications in the specialty tier. Given the importance of prescription drug coverage for patients to access these medications, there is almost always the need for reimbursement assistance including prior authorization support, appeals and peer-to-peer conversations with the pharmacy benefits manager (PBM) on behalf of the patient. Once a medication is approved by the PBM, patients often require co-pay assistance in the form of manufacturer-sponsored patient assistance programs, disease-specific grant and foundation support, and internal foundation subsidy towards patient out-of-pocket expenses
Given the aspects above, here at Vizient we define specialty medications as those high-touch medications listed above and/or those products requiring a specialty or limited distribution channel. Limited distribution drugs are medications where manufacturers limit the distribution via certain distributor channels (such as the specialty arm of major wholesalers, specialty distributors or direct shipment from the manufacturer) and/or to certain specialty pharmacies. Specialty pharmacies are selected based on their ability to provide optimal patient outcomes, demonstrated by national accreditation, comprehensive payer coverage, efficient reporting of key data elements, and who have a dedicated care team and 24/7 phone support. Using limited distribution networks can help manufacturers ensure patient safety and appropriate access — however, limited distribution networks can hinder access to medications for health systems and potentially compromise patient care by delaying time to therapy initiation, causing missed doses due to fragmented communication and enabling higher medication costs for patients.
While there are many ways to define specialty drugs – whether disease state, medication attributions, high touch or high cost – it’s clear no one size fits all in specialty pharmacy. That’s why at Vizient we consider the high-touch aspect together with limited distribution as it provides the best gauge for classifying this growing segment of the market. By understanding how these various aspects are intertwined, stakeholders can better conceptualize specialty spend, future trends and eventual savings and revenue-generation opportunities.
For more information about specialty pharmacies and methods or support for pursuing your own specialty pharmacy program, check out these resources:
About the author:
Jeni Hayes is the Senior Clinical Manager for Pharmacy Outcomes within the Center for Pharmacy Practice Excellence at Vizient, a health care performance improvement company in Irving, Texas. In this role, she develops actionable clinical insights and forecasting resources for members and suppliers. Hayes earned her PharmD degree from MUSC Health in Charleston, SC and her Master of Science in Pharmacoeconomics from the University of Florida. In addition, she completed a PGY1/PGY2 Health System Pharmacy Administration residency at MUSC Health and is a Board-Certified Pharmacotherapy Specialist. Prior to joining the Vizient team, Hayes spent 13 years at MUSC Health in roles related to Outcomes Management, Residency Leadership, and most recently as the Clinical Manager for the Specialty Pharmacy Program.