The specialty drug pipeline is evolving and contributing to rising costs. Over the last 10 years, the total specialty-drug market spend has approximately doubled, and is expected to hit $310 billion this year.
The staggering specialty market increase is due in part to two major shifts. First, the market has historically been impacted by less than 2% of the population with relatively rare diseases using specialty prescriptions. However, rare diseases impact 30 million people in the U.S. Specialty drug utilization has also moved beyond rare diseases to now target more common, chronic conditions, opening the door for more people to use these prescriptions.
Second, nearly 80% of the drugs that the FDA is expected to approve in 2023 are specialty drugs. The cost of specialty drugs has also increased due to high demand, greater availability, and laborious manufacturing and handling. Manufacturers are increasingly focused on specialty because these drugs are more profitable to make due to the high markup potential and lack of competition. Therefore, they have become more frequently prescribed and yet less affordable.
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