Specialty Drugs FAQs

Specialty Drugs FAQs

These frequently asked questions have been developed to help you gain a better understanding of biologic and specialty drugs. Click on the questions below to view the answers.

Specialty and biologic products are used for the treatment of complex chronic, life-threatening or rare health conditions that previously had no therapeutic options available.

Biologics are made from living organisms and can come from sources including humans, animals and microorganisms such as bacteria or yeast. Most are large and complex in structure, and have large molecules or mixtures of molecules. They are much more difficult and costly to produce than conventional drugs. Non-biologic or conventional drugs are made of pure chemical substances, tend to be smaller, simpler molecules, and are fairly easy and inexpensive to produce.

Not long ago, specialty drugs were used to treat a small number of complex conditions, including multiple sclerosis, rheumatoid arthritis and some cancers. Today, the use of specialty drugs has expanded to include many other diseases and conditions including HIV/AIDS, hepatitis C, asthma, COPD, cystic fibrosis, immune deficiency and seizures/epilepsy. They are also increasingly being used to control chronic illness.
Specialty drugs require:
  • Special handling: Many require a controlled temperature environment (e.g. refrigeration) making storage and shipping difficult.
  • Special distribution: Retail pharmacies can dispense some specialty drugs. However, most are dispensed through “special pharmacies” that employ individuals who are trained to support the complex process needed to work with these drugs. Specialty pharmacies are also equipped to store and ship specialty drugs.
  • Special administration and monitoring: Specialty drugs come in many different forms. Some must be injected or given intravenously by a health professional. Others can be self-injected and approximately one-third are or will be delivered in oral tablet form. In most cases, significant patient education, monitoring and follow up are required. This is to make sure the correct dose is taken, the drug is working as expected and no serious side effects are present. Side effects can be more frequent and serious than with conventional drugs.

Specialty drugs tend to cost significantly more than conventional drugs, ranging from $6,000 – $750,000 per year. Many factors determine the cost. The research and development is often long, complex and expensive, with average costs for each new drug at approximately $1.2 million. Once developed, they may require special processes to handle, store and distrubute.

In many cases, specialty drugs are tailored to a smaller population of patients and involve more individualized use based on patient-specific genetic-level differences. For example, for less common diseases like Hemophilia, only a small number of people need the specialty drug used for treatment. This means that the cost of the drug must be spread out over fewer users, making the cost per individual much higher.

As biologic products begin to go off patent, they may be replaced by biosimilars. According to the Food & Drug Administration (FDA), a biosimilar is a type of biologic product that is approved by the FDA because it is highly similar to an already approved biologic product. The biosimilar must show no clinically meaningful differences in terms of safety, purity and effectiveness. The FDA will only approve a biosimilar product if it, “…has the same mechanism of action, route of administration, dosage form, and strength as the reference product.”

Specialty medicines are rapidly approaching half of total drug spend, and annual spending on these drugs is not expected to slow down anytime soon. The market continues to be dominated by medicines to treat cancer, multiple sclerosis, HIV and autoimmune diseases. Oncology and autoimmune biologics are expected to account for 68% of growth in the specialty category in the next five years.

Biologic products will begin to go off patent and biosimilars will replace some drugs depending on disease category. Future manufacturing will use high technology and delivery systems such as nanotechnology, with nanoparticles or implantable devices used to treat specific types of cancers.