Dr Steve Miller: Innovative Payment Models Necessary to Handle Specialty Pharmacy

Specialty pharmacy may be one of the most rapidly rising costs in all of healthcare, but these costs are shouldered by a small percentage of patients. As such, it is essential that new innovative payment models be developed for these new products, said Steve Miller, MD, senior vice president and chief medical officer of Express Scripts.

Transcript (slightly modified)

What are the opportunities and challenges facing specialty pharmacy over the next few years?

Yeah, so specialty is actually one of the most rapidly rising costs in all of healthcare. Right now you have about 1% to 2% of patients spending about 30% of the pharmacy dollars; by 2018 that grows, that 1% to 2% of patients will be spending 50% of the pharmacy dollars. And so it’s an enormous strain for all, both patients but also plan sponsors. So specialty pharmacy is going to be central to pharmacy for the next several years, and it really is the hot topic.

How will specialty pharmacy be impacted by innovations in our healthcare system?

There are several ways to think about that. One is innovations in new technologies and so when you look at the drug pipeline, almost the entire pipeline is devoted to specialty drugs. And so you’re going to see more and more drugs coming into the marketplace, but almost all of them are going to be specialty drugs. The second way you got to think about innovation is how we’re going to pay for these drugs. Historically, you had cancer chemotherapy at $10,000; for chemotherapy it’s now over $100,000. You have gene therapy that’s going to be entering the market in the next several years and that’s going to be over a million dollars, and so not only are we going to have innovative new products but we’re going to have to come up with innovative new models to pay for those products.