Close up of stethoscope lying on top of calculator and graph print-out; specialty drug market concept

To Maintain a Foothold in the Growing Specialty Drug Market, Focus on Data Resources

U.S. prescription drug spending continues to grow, driven by the costs and choices available in specialty drugs. Specialty drugs accounted for 50 percent of U.S. total drug spending in 2021, according to Sonal Parasrampuria and Stephen Murphy of the U.S. Department of Health and Human Services (HHS).

Spending is one way to track the overall growth of the specialty drug market. To fully understand the growth of this market and maintain a competitive position, pharmaceutical companies need access to deep pools of high-quality data. As growth in specialty medications increases, so does the call for more efficient, expanded access to data resources.

The Growing Specialty Drug Market

Total dollar amounts in the growing specialty drug market are driven by several factors. One is the increasing cost of existing medications. The other is steady growth in PMPM: prescriptions per member per month.

In 2020-2021, specialty drug prescription numbers increased 14.2 percent per member per month — approximately the same as pre-pandemic levels, says Michael Lonergan, president of drug management solutions at Pharmaceutical Strategies Group. Utilization increased in 2021 due in part to the introduction of various biosimilars. Further utilization and cost effects are expected to arise from the introduction of Humira-related biosimilars in coming years.

In an article published in the American Journal of Health-System Pharmacy, Eric M. Tichy and fellow researchers identified several factors driving the growth of pharmaceutical expenditures, particularly those surrounding specialty drugs. These factors included:

  • Drug utilization.
  • Price changes.
  • New drug approvals.
  • Patent expirations.
  • New and proposed policies and legislation.

Of these, Tichy et al. found that utilization, price changes and new drug approvals drove the majority of drug expenditure increases.

This rapid growth comes with complications. “We’re at a kind of inflection point in the specialty market,” says Adam J. Fein, CEO of Drug Channels Institute.

The inflection point, Fein says, is driven by a number of factors, including more competition in the specialty drug market, increased vertical integration for both payers and providers, and new hesitancy among payers to shell out for specialty treatments — especially when those treatments aren’t backed by solid evidence of value.

“The kind of innovation that’s going on right now is so profoundly different than what was going on 20 years ago,” says former FDA commissioner Scott Gottlieb. Innovation in specialty pharmaceutical research both generates and is driven by a wealth of new data points and sources. Organizations that focus on improving their access to data resources thus gain more clout and a stronger base of information from which to innovate further.

Scientist at work in lab; specialty drug market concept

How Expanding Markets Call for Greater Data Resources

Expanding markets generate more data points. As the market for any product grows, so do individual customers’ experiences and expectations, points of sale and use, and other pieces of information.

Analyzed effectively, these data points can offer extraordinary insights into the market. Yet they can easily overwhelm individual participants in that market.

For instance, the rapid growth of the specialty drug market has left some providers scrambling to familiarize themselves with all available treatment options. “As more medications are being covered on both the medical and pharmacy benefit, providers are overburdened and are not always able to easily identify the best quality treatment to choose, or which may be the most cost-effective,” says Peter Demogenes, vice president of health services and innovation company Optum.

Analysis of available data also provides insight into how participants in the specialty drug market respond to the market’s growth.

An RxBenefits survey, for instance, found that 49 percent of surveyed U.S. workers said they’d struggled to get access to specialty medications. Nearly one in four (24 percent) cited high costs as the primary hurdle. In response to cost pressures, approximately 20 percent of respondents said they would change jobs or involve their company’s human resources department in order to get insurance coverage for specialty medications.

“The results of this survey further showcase just how important medication is to today’s consumers,” says Mark Campbell, RxBenefits’ vice president of clinical solutions. Here, data demonstrates how patients change their behavior to respond to needs for specialty medications. In doing so, it reveals opportunities for pharma companies to reach patients through their insurance plans and work choices.

Research on specialty drug utilization and costs provides a clear example of the value of access to pharma-related data. “Our data supplies the needed precision to track trend drivers and keep pace with the rapidly changing market complexities, allowing for the construction of appropriate plan strategies,” says Renee Rayburg, vice president of specialty clinical consulting at PSG’s Artemetrx.

Pharmaceutical companies can likewise benefit from sufficiently precise, deep data sets with robust analytical tools. Investment in data resources can return benefits far larger than the original outlay.

Scientists and lab technicians working together in laboratory; specialty drug market concept

Tools and Strategies for Allocating Data Resources Effectively

The specialty drug market is expected to continue its growth in financial terms and in terms of patient utilization, payer and provider relationships, distribution channels and the number of therapies for rare diseases available.

As all these factors proliferate, keeping track of their impact on business becomes increasingly challenging for pharmaceutical teams — particularly for those relying on outdated tools and methods for collecting, tracking and analyzing data. New approaches to allocating data resources are required to optimize the use of incoming data.

“Top performers in [the specialty drug] sector are not purely distribution pharmacies. They’re creating critical, sticky relationships with the health system, manufacturer, or patient,” says Paul Hepper, managing director at investment bank Harris Williams. For example, health systems are building new relationships with specialty pharmacies and using new methods of communication to keep patients and providers on the same page regarding infusions and other drug-related treatments.

Tracking these relationships, then, provides a better understanding of the nature of them. It also provides the opportunity to build stronger relationships that impact a company’s or product’s position in the specialty drug market in meaningful ways.

Allocating appropriate resources to data collection, analysis and strategy also provide a more accurate understanding of growth in the prescription drug market.

In a Brookings Institute study, Richard G. Frank, Andrew L. Hicks, and Ernst R. Berndt note that “considerable caution should be taken in interpreting the prescription drug component of the [Consumer Price Index] as a comprehensive reflection of price growth in those markets.”

CPI measures focus on retail outlets, but patient and provider access to specialty medications has been shifting away from retail sources to direct distributors, specialty pharmacies, and clinics. Without information about the flow of these medications from manufacturer to patient, pharma teams risk a grave misunderstanding of the market and their opportunities within it.

U.S. payers spent $301 billion on specialty drugs in 2021, a number that increases annually and shows no signs of slowing, write Parasrampuria and Murphy at HHS. Any single representation of this growth, however, obscures the factors that drive it, such as the shifting behaviors of patients who require specialty drugs.

To fully understand the growth of the specialty drug market — and to respond effectively — pharmaceutical companies need access to data about patient and provider behavior, payer decision making and more. Access to this information demands closer attention to the allocation of data resources in pharmaceutical decision making.

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