What are Biotech medications?
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If you are not familiar with the terms Biotech or specialty pharmacy
medications, these medications are typically used to treat chronic,
high-cost diseases. Sometimes these products have a biological
(blood products, insulin) basis rather than chemical. Many times, due to
the large size of the drug molecule, these medications are only administered
via injection or infusion.
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Biotech Trends
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Nearly 50% of all drugs in development are classified as biotech/specialty drugs.
Source: Lednar, W., AON, “Benefit Designs: Biotech vs. Conventional
Treatments,” presented at PCMA Specialty Pharmacy Annual Meeting,
October, 2005.
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Rarely do these medications have a generic alternative and frequently they
can cost thousands or dollars per month compared to less than a $100 per
month for traditional medications. Recent national reports suggest 2005
spending for biotech/specialty pharmacy medications represented 24 percent
of total drug expenditures with projections showing the figure increasing
to 37 percent by 2020. These same reports suggest the growth in
biotech/specialty pharmacy spending in the near term will be twice that of
conventional drugs with the primary reason being the much larger number of
biotech medications being approved by the FDA.
Historically, these medications have been covered under the medical benefit
and administered in the physician’s office due to special mixing or
physician monitoring of these primarily injectible medications. Recent
reports suggest 45% of biotech medication expenditures occur in the
physician office while 25% occur at retail pharmacies, 15% at specialty
pharmacies with the balance coming from mail order pharmacies, outpatient
hospital and home infusion service.
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