Specialty medications and injectables are changing how we treat chronic diseases-but they’re also breaking the bank. These drugs, used for conditions like cancer, rheumatoid arthritis, and multiple sclerosis, make up just 2% of all prescriptions but account for half of all pharmacy spending. In 2023, the average cost per month for one of these drugs was over $1,000. For employers, that’s $34.50 per employee, per month-just for specialty drugs. And it’s only getting worse. Spending is projected to hit $350 billion by 2027. If you’re paying for these drugs-whether as an employer, insurer, or patient-you need to know how to cut the costs without cutting care.
Use Formulary Management to Stop Wasteful Prescribing
Formulary management isn’t just a buzzword. It’s a practical tool that can save hundreds of dollars per member each year. The idea is simple: only cover drugs that have proven value. This means requiring prior authorization before approving expensive injectables, limiting the quantity dispensed, or requiring patients to try cheaper, equally effective alternatives first (called step therapy). Excellus BlueCross BlueShield used this approach with GLP-1 weight loss drugs and saved $13.64 per member per month compared to national pharmacy benefit managers. That’s over $160 per person annually. And they didn’t deny care-they just made sure the right drug was used at the right time. Prior authorization isn’t about saying no. It’s about saying “let’s check if this is truly needed.” The key? Make sure the process is fast and transparent. If a doctor has to wait days for approval, patients delay treatment-and costs go up. Employers who use real-time digital systems for prior auth see 98% approval rates while still saving money. The goal isn’t to block access. It’s to prevent overuse.Narrow Your Pharmacy Network
Not all specialty pharmacies are created equal. Some charge twice as much for the same drug. By limiting your plan to a small group of high-performing specialty pharmacies, you can cut costs by 10-15%. CarelonRx found that employers using exclusive networks saved $1.37 per member per month-$35 million a year across 200 employers. Why? These networks negotiate lower prices because they handle more volume. They also offer better support: nurses who call patients to check on side effects, delivery teams who make sure injectables stay cold, and pharmacists who help with insurance paperwork. The catch? Patients may not like being forced to switch pharmacies. About 22% of employers reported a spike in customer service calls during the transition. The fix? Communicate early. Send clear letters. Offer help with transferring prescriptions. Most patients end up happier once they realize their drug arrives faster and their copay is lower.Switch to Biosimilars When You Can
Biosimilars are the generic version of biologic drugs. They’re not exact copies-biologics are too complex-but they work the same way and are proven safe. And they cost about half as much. The FDA has approved 42 biosimilars as of late 2023. Yet adoption is still below 30% in most therapeutic areas. Why? Doctors aren’t always familiar with them. Patients worry they’re “less effective.” But studies show no difference in outcomes. One hospital system saved 25% on rheumatoid arthritis drugs just by switching patients from the brand-name biologic to its biosimilar. The biggest barrier? Prescriber habits. If your doctors only know one drug for a condition, they’ll keep prescribing it. The solution? Give them data. Show them savings. Share patient outcomes. Offer continuing education. ASHP recommends monthly reports to Pharmacy and Therapeutics committees to track which biosimilars are working-and which aren’t.
Move Injections Out of Hospitals
Getting an infusion in a hospital outpatient department can cost three times more than getting the same shot in a doctor’s office-or even at home. Quantum Health reviewed 220 specialty drugs and found that 63% of patients didn’t need hospital-level care. When they moved those patients to lower-cost settings, costs dropped by 48%. For drugs like Humira or Enbrel, that means a $1,200 hospital visit becomes a $600 office visit. The trick? Not all drugs can be given at home. Some need monitoring. Others require special equipment. But many don’t. If your patient is stable, has support at home, and the drug is safe for self-administration-there’s no reason to pay hospital prices. Start by identifying high-volume injectables. Then work with your providers to create clear guidelines: “If the patient has been on this drug for 6 months without complications, they qualify for home or office administration.”Use Value-Based Contracts
Traditional contracts pay for every pill-no matter if it works. Value-based contracts pay only if the drug delivers results. For example, a drug that treats hepatitis C costs $80,000. But if the patient doesn’t get cured, the manufacturer refunds part of the cost. Prime Therapeutics saw a 45% increase in these types of deals in 2023. And it’s not just for big pharma anymore. Some insurers now require value-based agreements for all drugs over $5,000 per month. This shifts the incentive. Instead of pushing more prescriptions, manufacturers want their drugs to work. That’s good for patients and payers alike. The downside? These contracts take time to set up. You need data systems that track outcomes. You need clear definitions of “success.” But for high-cost drugs with measurable results-like cancer therapies or autoimmune treatments-the payoff is worth it.
Help Patients With Financial Assistance
Many patients can’t afford their meds-even with insurance. Manufacturer copay coupons can help, but they often don’t count toward deductibles. That means patients still hit their out-of-pocket max faster. Enter copay maximizer programs. These programs redirect manufacturer assistance to pay toward the deductible instead of just lowering the copay. The result? Patients pay $0 out of pocket, and the employer pays less over time because the patient reaches their out-of-pocket maximum sooner. CarelonRx reported that this approach reduced employer spending by 5-8% annually while keeping patients on therapy. It’s a win-win: patients stay on treatment. Employers save money. And no one gets dropped from care.What Doesn’t Work
Some strategies sound good but don’t deliver. Capping monthly out-of-pocket costs? It helps patients in the short term but doesn’t reduce overall drug spending. It just shifts the cost to the plan. Relying on patient education alone? Most patients don’t understand drug pricing. You can’t expect them to negotiate with pharmaceutical companies. Ignoring data? If you don’t track which drugs are driving costs, you’re flying blind. Real-time analytics are no longer optional. They’re essential.Putting It All Together
No single strategy cuts costs enough. But combining them? That’s where real savings happen. Start with formulary management to stop waste. Add a narrow pharmacy network to get better prices. Push for biosimilars where available. Move infusions out of hospitals. Use value-based contracts for high-cost drugs. And help patients with copay maximizers. Employers who use at least three of these strategies report savings of 20-30% on specialty drug spending. And patient outcomes stay the same-or improve. Why? Because better management means fewer gaps in care. The future? More consolidation. More biosimilars. More data-driven decisions. By 2026, experts predict that shifting specialty drugs from medical benefit to pharmacy benefit will cut costs for 60-70% of these drugs. That’s a game-changer. The bottom line? You can’t stop specialty drugs from being expensive. But you can stop paying too much for them.Are biosimilars as safe as brand-name biologics?
Yes. Biosimilars are approved by the FDA after rigorous testing to prove they work the same way as the original biologic drug. They have the same mechanism of action, dosage, and safety profile. Over 100 million patient-years of real-world use have shown no meaningful differences in effectiveness or side effects. Hospitals and clinics that switched to biosimilars saw no increase in adverse events-and saved up to 30%.
Why do some doctors refuse to prescribe biosimilars?
Many doctors were trained on the brand-name drug and aren’t familiar with biosimilars. Some worry patients will think they’re getting a “lesser” drug. Others are influenced by pharmaceutical reps who push the original product. The solution is education: share clinical trial data, patient outcomes, and cost savings. When doctors see that biosimilars work just as well-and help patients stay on therapy-they start prescribing them.
Can patients switch specialty pharmacies on their own?
Yes, but it’s easier with help. Specialty pharmacies handle insurance pre-approvals, delivery, and clinical support. If your plan switches networks, the new pharmacy will usually contact your doctor, transfer your prescription, and ship your medication. Patients should expect a call from a nurse or pharmacist within 24-48 hours to walk them through the process. Don’t wait-reach out to your plan’s customer service to start the transition early.
How do prior authorizations affect patient adherence?
When done right, prior authorizations improve adherence. They prevent patients from starting drugs that won’t work for them, reducing side effects and treatment failures. But if the process takes too long-more than 48 hours-patients give up. Digital systems that auto-approve based on clinical criteria reduce delays. Employers that use real-time prior auth see 12-15% higher adherence rates because patients get their meds faster and with fewer hurdles.
Is home infusion safe for all injectable drugs?
No. Only drugs approved for home use and stable patients qualify. Drugs that require IV monitoring, like some cancer treatments, still need clinical settings. But for drugs like interferons, immune modulators, or enzyme replacements, home infusion is not only safe-it’s preferred. Studies show patients are more comfortable at home, miss fewer doses, and report higher satisfaction. The key is having a qualified home infusion provider who trains patients, delivers supplies, and checks in regularly.
What’s the fastest way to start saving on specialty drugs?
Start with your top 5 most expensive drugs. Run a report to see how many are being prescribed, where they’re being administered, and whether biosimilars are available. Then, implement prior authorization for inappropriate use, switch to a preferred pharmacy network, and offer copay maximizers. These three steps alone can cut costs by 15-25% within 6 months. No new technology or contracts needed.