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Health Aff (Millwood). 2014 Oct;33(10):1736-44. doi: 10.1377/hlthaff.2014.0511.

Specialty medications: traditional and novel tools can address rising spending on these costly drugs.

Author information

Alan M. Lotvin is executive vice president for specialty pharmacy at CVS Caremark, in Woonsocket, Rhode Island.
William H. Shrank ( is chief scientific officer and chief medical officer of provider innovation at CVS Caremark.
Surya C. Singh is corporate vice president for specialty client solutions and trend management at CVS Caremark.
Benjamin P. Falit is a resident physician in the Harvard Radiation Oncology Program at Brigham and Women's Hospital, in Boston, Massachusetts, and a consultant to CVS Caremark on matters related to oncology and specialty pharmacy strategy.
Troyen A. Brennan is chief medical officer at CVS Caremark.


Spending on specialty medications, which represented a small proportion of US pharmacy spending at the beginning of this decade, is growing by more than 15 percent annually. It is expected to account for approximately half ($235 billion) of total annual pharmacy spending by 2018. Among the numerous reasons for the high cost of this heterogeneous group of medications are the increasing size of target patient populations, the high cost of drug development, and a complex and uncoordinated delivery system. In this article we describe the evolution of the specialty market, characterize the current state of specialty medication use, and articulate key challenges and potential solutions. Fully realizing the potential value of the expanding universe of specialty medications will require collaborative efforts to reduce waste and promote value. Those who prescribe, dispense, deliver, and pay for specialty medications will need to employ a combination of traditional and novel management approaches, such as prior authorization, step therapy, tiered formularies, administration at lower-cost sites, and the unique tools being developed for cancer medications.


Cost of Health Care; Health Spending; Managed Care; Pharmaceuticals

[Indexed for MEDLINE]

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