Specialty drug costs and employer management

2021 Q2 Rx Newsletter

May 3, 2021

Specialty drug spend wasn’t always the behemoth it is today. In 1990, there were a mere 10 specialty drugs on the market. By 2015, that number skyrocketed to 300.

Specialty drugs continue to be the most expensive in the market, with gene therapies like Zolgensma costing upwards of $2 million. The continuous rising costs of specialty drugs are a top concern for many employers. Specialty drug spend accounts for more than half of pharmacy spend, according to CVS Caremark’s 2020 Drug Trend Report. Five therapeutic drug categories drive 90% of the specialty drug spend.

Employer Cost Management

Forty-four percent of employers feel focused action to manage specialty-drug cost is very important going forward into 2022.1 As specialty drug cost management becomes a growing concern, many employers are asking, “How do we approach specialty pharmacy?”

According to the National Business Group on Health, 88% of employers in 2021 will require prior authorization for specialty medications under the pharmacy benefit as a means of cost management. Fifty-three percent of employers in 2021 will require prior authorization for specialty medications under the medical benefit. Prior authorization—simply put—is the requirement of approval from a health plan before the service or prescription is covered. This helps keep high-cost specialty drugs from being inappropriately prescribed.

Another way employers are approaching specialty pharmacy cost management is by site-of-care solutions. Where drugs are administered can drive significant variations in the total cost, even upwards of 50% in some cases. Site-of-care solutions look to move the member to the most cost-effective site for drug administration. Fifty-one percent of employers in 2021 will implement site-of-care management (e.g., ensure drugs are administered in appropriate  ettings or provide incentives for using appropriate sites of care).

Forty-seven percent of employers will be utilizing high-touch case management as a means of cost control in 2021.2 High-touch case management includes medication management therapy and medication coaching programs. Medication management therapy is a way to ensure the best therapeutic outcome for patients. It includes medication therapy review, a personal medication record, a medication-related action plan, intervention or referral, and documentation and follow-up. Medication coaching programs are a proactive approach to helping patients adhere to their medication. Medication adherence—patients properly taking medicine prescribed to them—is associated with a decrease in overall health care use and costs.


In January 2021, the best-selling drug Humira increased in price by 7.4%. Humira is a high-cost, specialty, injectable, biologic drug used to treat a plethora of diseases, but most commonly Rheumatoid Arthritis. Experts hope the introduction of biosimilars in the U.S. market will introduce competitive pricing and bring down the cost of these high-cost specialty drugs Humira being one of them. Due to the complexity of biologic drugs, it is not possible to create an exact chemical replica. Therefore, biosimilars are created instead of generic exact replicas of the drug. FDA-approved biosimilar medications have no meaningful differences in terms of efficacy from the original product. Since 2016, the FDA approved six new adalimumab (Humira) biosimilar medications with two more biosimilars awaiting market authorization. Biosimilar competition may be sparse in the first few months of 2023 for Humira, but will reach a turning point by the end of 2023 with these eight potential agents entering the market.


1. Mercer: Survey on Post-Election Health Policy, November 10th – 23rd.
2. National Business Group on Health 2021 Large Employers’ Health Care Strategy and Plan
Design Survey.