Spending on specialty drugs grew 26.5% last year to account for 33% of all US spending on prescription drugs, compared to 23% in 2010. Specialty drugs are often defined as “prescription products requiring extra handling or administration that are used to treat complex diseases including hepatitis C, multiple sclerosis and cancer.” The rise in expenditures in 2014 was driven by hepatitis C drugs, for which US spending totaled $12.3 billion. Specialty drugs are often more expensive than traditional drugs, often have no substitutes and serve only a small share of insurance plan enrollees, and thus account for a disproportionately larger share of drug spending. Strategies used by health care payers to reduce specialty drug costs include tiered formularies, drug coupons, integration of pharmacy and medical benefits, distribution through specialty pharmacies and negotiated pricing with manufacturers. Despite these efforts, access to such drugs is compromised for some consumers. Some states have limited out-of-pocket spending for expensive specialty drugs.

Source: Congressional Research Service