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How are specialty drugs shifting the healthcare industry?

In our recent video, Alex Bastian (VP, GfK) outlines upcoming challenges facing the healthcare industry and how shifting attitudes towards expensive specialty drugs are causing them.




If you know healthcare, you know that the era of the blockbuster is over. Drugs take many years and millions of dollars to make. In an era where regulations and generics can destroy a brand, it’s extremely important to understand why this is occurring.

Today, pharmacos are focusing on specialty drugs. In fact, spending on specialty drugs by the year 2020 is expected to explode 360% or more. What this means is we’re actually shifting a paradigm, treating much more targeted groups of patients with much more expensive medications.

But what will this focus on specialty scripts mean for the years ahead?

Manufacturing of large specialty pharmaceuticals is often more complex and time-consuming. Thus, the costs of these drugs are often much more expensive to produce and distribute. Maybe that’s why specialty drugs are 20x the cost, in some instances, than small molecule drugs that treat the same disease.

Unique characteristics of the distribution model and also the marketing model require unique approaches to how these drugs are distributed in the United States as well as the concerns manufactures, patients and physicians have in terms of using these medications in practice

As a result, payers are shifting more costs to patients. They’re also erecting barriers to physicians in the normal utilization of these therapies in the clinic. It’s estimated that in the next 10 years, more than 50% of healthcare spending could come from a government customer. It brings up real questions as a political base, as a system and as government, how we’re going to pay for innovations and fund them into the future.

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