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The High Cost of Specialty Drugs

Introduction

Despite healthcare reforms and the introduction of methods to optimize the medical industry, individual aspects deserve particular attention due to the inability of stakeholders to address specific challenges. The high cost of specialty drugs is one of such barriers, which makes it impossible for many people to undergo a comprehensive course of treatment and take prescribed medications. Addressing this problem requires the participation of different stakeholders, and a special plan can be developed. This work aims to propose the stages of this plan to determine the degree of involved participants’ responsibility, specific principles of regulation, and strategies for its implementation.

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Healthcare Administration Barrier

The high cost of specialty drugs is an issue that affects many different stakeholders. Firstly, as Robinson, Howell, and Pearson (2018) state, “high prices and access barriers compound each other” (p. 2169). In other words, many patients cannot count on the purchase of the necessary medications, which limits their ability to undergo qualified treatment. Secondly, according to the researchers, pharmaceutical companies have difficulties in selling specialty drugs due to financial nuances and are forced to suffer losses caused by an incompetent sales policy (Robinson, Howell, & Pearson, 2018). With regard to the activities of medical staff and insurers, the existing problem also has a negative impact. Robinson, Howell, and Pearson (2018) pay attention to “the failure of the current model of drug pricing and access in the United States” (p. 2169). Provider reviews are based on poor patient outcomes, which is unacceptable for a well-developed healthcare system. As a result, the inability to organize a stable and affordable sales system affects different parties negatively, which is a prerequisite for intervening and addressing the problem by engaging stakeholders’ attention.

Key Stakeholders

To address the proposed issue competently, the participation of the relevant stakeholders is crucial. In addition to the objective allocation of resources, for instance, maintaining sustainable drug supply chains and promoting interaction between pharmaceutical companies and distributors, the roles of stakeholders should be defined reasonably. According to Abbott, Shao, and Shi (2019), one of the urgent tasks is to achieve the agreement of specialty drug manufacturers with an updated marketing policy for their products. The authors summarize the participants in the delivery process into one category and call “manufacturers, pharmacy benefit managers (PBMs), and specialty pharmacies” as the key interested parties (Abbott, Shao, & Shi, 2019, p. 80). However, in addition to these stakeholders, other participants need to be involved. Policymakers should advocate for the legislative promotion of drug cost reduction strategies. Distributors need to establish reliable relationships with suppliers to ensure the consistent access of specialty drugs to the pharmaceutical market. Finally, selling companies should adhere to a specific price threshold to minimize competition and maintain sustainable operations. Engaging these stakeholders can help address the proposed problem effectively.

Regulation Principles

With regard to real interventions and to ensure the sustainability of potentially positive change measures, both internal and external regulations are essential. Abbott, Shao, and Shi (2019) see pharmaceutical companies and their representatives as internal regulators who need to come to an agreement and ensure a reliable market strategy for the production and supply of specialty drugs. Risk evaluation strategies should be developed, and mitigation practices need to be promoted to eliminate the possibility of shortages and, consequently, limited access to medications. Alexander et al. (2017) support this regulation principle and note that to address the issue at the legislative level, manufacturers should organize a system of control over volume and prices to prevent price hikes. Policymakers, in turn, should be engaged as stakeholders who provide both legislative and institutional support for the necessary initiatives. According to Alexander et al. (2017), value-based purchasing is an aspect that may allow activities to reduce prices for specialty drugs, but without appropriate permission, this cannot be done. Therefore, officials can work with national agencies and government boards to promote specific initiatives through bills, thereby helping to resolve the issue in question.

Organizational and Strategic Development Structures and Processes

To address the issue of the high cost of specialty drugs, ensuring the necessary background is crucial from both organizational and strategic perspectives to minimize risks and maintain a sustainable change process. To begin with, a financing system should be established to deliver medications to the market at lower prices. According to Schoonveld (2020), there are two possible options: budgeting and supply via hospitals or pharmacy channels. In the plan in question, the pharmacy direction is more acceptable due to the possibility of influencing through both healthcare control and trade mechanisms.

Another aspect is insurance policy regarding payments for specialty drugs. Due to the high cost of medications, insurance companies suffer heavy losses. To minimize costs and retain the audience, these agencies should follow special partnership programs based on interaction with medical providers. Both parties will be interested in reducing costs: on the one hand, healthcare institutions strengthen credibility by increasing patient outcomes, and on the other hand, insurers reduce policy costs due to fewer requests for payments.

Finally, the role of policymakers is to promote a corresponding draft of changes in the legislative sphere. A collective petition signed at the local level is an effective tool to attract the attention of the authorities. Further, in accordance with the strategy of changes, the project will be considered at the national level. If approved, the roles of all parties involved will be significant since each side has an individual function in the transition to lower prices for specialty drugs.

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Strategies for Communicating the Plan

Once stakeholders and key intervention processes are identified, communication strategies for the plan to address the barrier in question need to be developed. As Kesselheim, Avorn, and Sarpatwari (2016) argue, specialty drug prices are largely dictated by market trends rather than research costs. Therefore, interaction with pharmaceutical companies should be a priority during the change activity. Manufacturers’ representatives can receive a collective letter from local healthcare providers and insurers. In addition, the approval of the officials may be presented as an argument. The communication of the plan to the authorities may follow a similar scenario, but additional aspects of the legislation need to be taken into account. The current Medicare policy limits the ability to sponsor the public health sector for access to medications (Kesselheim, Avorn, & Sarpatwari, 2016). In this regard, in addition to a collective appeal, real statistics on the indicators of the population’s access to specialty drugs can be presented. This approach may have an effective impact to induce the authorities to take appropriate measures to close the policy gaps in the control over the cost of such drugs and set limits on price hikes.

Conclusion

The plan addressing such a healthcare administration barrier as the high cost of specialty drugs includes several steps to identify stakeholders and realize key intervention processes. The analysis of the topic shows that the involvement of both pharmaceutical manufacturing companies and the authorities is a prerequisite for changes in the current pricing policy. Minimizing competition among manufacturers and controlling market trends are measures to promote the absence of a critical price increase. The plan can be communicated through collective appeals and drawing the attention of the authorities to the problem of public access to specialty drugs. The practical relevance of the research lies in an opportunity to change the current pricing practices and stimulate a more open and loyal pharmaceutical market.

References

Abbott, K., Shao, H., & Shi, L. (2019). Policy options for addressing the high cost of specialty pharmaceuticals. Global Health Journal, 3(4), 79-83.

Alexander, G. C., Ballreich, J., Socal, M. P., Karmarkar, T., Trujillo, A., Greene, J.,… Anderson, G. (2017). Reducing branded prescription drug prices: A review of policy options. Pharmacotherapy: The Journal of Human Pharmacology and Drug Therapy, 37(11), 1469-1478.

Kesselheim, A. S., Avorn, J., & Sarpatwari, A. (2016). The high cost of prescription drugs in the United States: Origins and prospects for reform. Jama, 316(8), 858-871.

Robinson, J. C., Howell, S., & Pearson, S. D. (2018). Value-based pricing and patient access for specialty drugs. Jama, 319(21), 2169-2170.

Schoonveld, E. (2020). The price of global health: Drug pricing strategies to balance patient access and the funding of innovation (3rd ed.). New York, NY: Routledge.

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