How the Shift to Specialty Medications Changed Pharmacy Benefits

Top 3 Things You’ll Learn

  • Comparison of prescription drug utilization trends from 2008 to 2018
  • How specialty drug utilization and high prices has tilted the market for employer-sponsored benefits plans
  • Why traditional pharmacy benefits management strategies are no longer effective

By far, the most significant driver of prescription drug trend is the rapid growth in the innovation, availability, and use of high-cost specialty medications. The specialty market experienced amplified competition in recent years with groundbreaking advances in cancer and rare disease (orphan drug) categories. Ten years ago, did we think we were going to be able to cure Hepatitis C or treat individuals with a peanut allergy with medications? And yet we have. The innovation is life-changing, even life-saving, but it comes at a hefty cost.

The Historic Shift in Drug Mix

The mix of prescription drugs has changed drastically over the last 10+ years. Where pharmacy benefit spending centered around brand and generic drugs in 2008, those categories have taken a backseat as high-cost specialty drugs have taken center stage. The specialty drug category, which includes treatments for rare diseases and medicines requiring special handling, now accounts for 40%-50% of overall prescription drug spend.

The shift in drug mix from traditional to specialty drugs occurred across all distribution channels. An IQVIA analysis shows that specialty medications accounted for 46.5%, or $407, of the $876 spent per person per year on medicines by 2017. For retail and mail-order distribution channels, specialty accounted for 37.4% of spending while comprising only 1.9% of total prescription volume.

The rise of specialty drugs and high prices has tilted the market over the last 10 years. Pharmacy benefits strategies must shift too.

Impact on Pharmacy Benefits Strategies

Typically, as new therapies hit the market, employers worry about how the cost of those medications will affect their already strapped budgets. Historically employers mitigated year-over-year trends by shifting utilization patterns (i.e., brand to generic conversion). Although that is still an effective approach, it’s not enough.

Employers also tried transferring costs to members to relieve their budgetary pressures. That strategy, too, has reached its tipping point, as the high costs have become unbearable for members as well. Reports state that 1 in 5 U.S. adults (22.9%) say that they or someone in their household was unable to afford drugs prescribed to them in 2019. It’s just not feasible to raise deductibles or copays high enough to help the employer sustain that kind of expense.

Today, most employer pharmacy benefits plans are seeing that 1% of prescription claims account for roughly 40%-50% of plan costs. Floating by with traditional PBM plan design strategies won’t work anymore; we must proactively manage prescription drug trend instead. Now more than ever, employers should be paying attention to specialty drugs and taking action to ensure prescription drug utilization isn’t having a detrimental impact on their pharmacy plan spend.

Check out our free e-book to learn more about the market drivers impacting employer-sponsored pharmacy benefits plan costs and why it’s time for a new approach.



  • Medicine Use and Spending in the U.S.: A Review of 2017 and Outlook to 2022. April 2018.
  • Witters, D. Millions in U.S. Lost Someone Who Couldn’t Afford Treatment. Gallup News, November 12, 2019.
  • RxBenefits Book of Business Analysis, 2019.

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