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Abstract
Specialty medications are medications that require special manufacturing and distribution processes and usually for the treatment of rare diseases and conditions. As a result of the low volume of use and high overhead associated with manufacturing and distribution, the cost of these drugs are typically in excess of $600 per month and account for 25% of all drug expenditures for patients and payers but less than 1% of privately insured claims. There are plenty of diseases treated with specialty medications, however this study will investigate cystic fibrosis, eosinophilic asthma, alpha-1 antitrypsin deficiency, primary humoral immunodeficiency, and human immunodeficiency virus in order to study a variety of markets. Additionally, we will study the price elasticity of demand for patients using specialty medications for these diseases and further study the payer impact on total healthcare cost after patients miss their specialty drug dose. The first study investigated the trends in average wholesale price, payer cost-share and patient cost-share for patients using specialty medications. These median costs were assessed directly from the database claims for each drug. Drug assistance in the form of $5000 was found for a drug representing a monopolistic market for cystic fibrosis, while a competitive market of HIV had a estimated drugs assistance of $150 to competitive markets.The second study investigated the price elasticity of demand for patients using these specialty medications. Proportional changes in subsequent months were used to express the change in demand for patients in the previous month. Segmented regression analysis was used to conduct a time series analysis that assessed price elasticity. Compared to general medicine which has a price elasticity of -20.9%, our study recorded a price elasticity between -3.1% to -0.7% for a monopolistic market (Cystic Fibrosis) to a competitive market (Primary Humoral Immunodeficiency) respectively, concluding that patients are more price inelastic with specialty drugs in our study.The third study explored the payer impact of missed specialty medication dose on total healthcare cost. Patients were followed monthly and split into two groups based on whether they had a January specialty drug claim. A random effects model was used to assess a significant difference in the total healthcare cost between these groups for each disease state. PIDD and HIV patients had a significant total healthcare cost increase possibly due to a worsening of their disease after missing a medication dose.The three studies contribute to an understudied area of patients using specialty medications. Our study showed that competitive markets tend to have lesser patient assistance, but poor drug adherence may lead to significant higher total healthcare cost. The implication of our study findings suggests with the expensive patient cost-share, better finance strategies are required to keep patients to adhering to their medication.