Biotech Trends

These medications rarely have a generic alternative. They can cost thousands of dollars per month compared to less than a $100 per month for traditional medications. Recent national reports suggest that 2005 spending for biotech/specialty pharmacy medications represented 24 percent of total drug expenditures, and projections show 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 primarily because of the much larger number of biotech medications being approved by the FDA.

Historically, these medications have been covered under the consumer's medical benefit and have been administered in the physician’s office due to special mixing requirements or  necesity of physician monitoring of these primarily injectible medications. Recent reports suggest 45% of biotech medication expenditures occur in the physician office;  25% occur at retail pharmacies; 15% at specialty pharmacies; and the remaining 15%  from mail order pharmacies, outpatient hospitals, and home infusion service.

Nearly 50% of all drugs currently 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.