Specialty Pharmaceuticals and States


Overview: Specialty Drugs: Saving Lives, Hitting Pocketbooks

graphic of complex experimental moleculeSpecialty pharmaceuticals are medications that consist of complex molecules, have qualities that result in costly delivery, and/or carry high costs—$600 or more per month is a typical threshold.

Specialty medications are frequently used in the treatment of a variety of serious health conditions. Spending for specialty therapy class medications has continued to rise. The top three specialty therapy classes—when ranked by per member per year—are inflammatory conditions, cancer and HIV. Those conditions account show a forecasted increase in utilization and cost from 20-32 percent for 2018 and 2019. As of 2015, about 36 percent of total pharmaceutical spending in the commercial market was devoted to specialty medications.

Database: 2015-2018 State Legislation on Prescription Drugs  

NCSL's state legislation online database tracks major policies affecting prescription drugs and biologic medicines. The new feature allows policymakers to view more than 3,600 filed bills across all 50 states and D.C.  For measures tagged as "specialty drugs" there have been more than 250 proposed bills in 45 states and D.C. (as of July, 2018).

Users can search or browse specific topics such as pharmaceutical patient access and affordability, specialty pharmaceuticals, compounding pharmacy regulation, Medicaid and health insurance coverage and reimbursement, and the right-to-try investigational drugs for the terminally ill. This first-in-the-nation state resource is available to all NCSL members, who can search by state, bill status, and any of 10 topics, using simple check boxes. The full text of every bill also is available to logged-in NCSL members.

Additional ResourcesPhoto of drug vials - re generic prices

  • NCSL Prescription Drug Reports and Archives  | View the NCSL resource page
  • 2015-16 State Legislation Related to Cost and Price Transparency for Prescription Drugs - November 2016 by NCSL
  • "Biotechnology and State Roles" - NCSL session at Legislative Summit in Boston, 8/8/2017- view session resources.  "Biotech research is growing fast. In Massachusetts, more than 63,000 biopharma employees are working on more than 1,600 potential new medicines. Learn how new models for pricing and research are hoping to bring down the cost."
    : Susan Dentzer, Network for Excellence in Health Innovation (NEHI), Massachusetts.
    Panelists: Robert Coughlin, Massachusetts Biotechnology Council (MassBio); Alice Moore, Executive Office of Health & Human Services, Massachusetts; Michael Sherman, MD, Harvard Pilgrim Health Care, Massachusetts; Martin Zagari, MD, Amgen, California

  • "Prescription Drugs and Costs" Aug. 9, 2016. "Break-through products such as biologics and specialty drugs promise extended lives or first-ever cures for individuals. Yet some price tags in this $310 billion U.S. market have shocked those who foot the bill – including state governments, Medicaid, employers, health insurers and patients themselves."  Download speaker resources:

  • NCSL Prescription Drug session - Nov 4, 2015
    With pharmaceutical access and costs back in the headlines, NCSL collaborated with Pew Family Trusts to present a session for legislators.  The materials compiled are available now; they include “Prescription Drugs: Overview and Update” by Dick Cauchi of NCSL and “Specialty Drugs: Managing Costs & Ensuring Access” by Prof. Chuck Shih of Pew.  

  • Prescription Drug News, Research and Opinions View the NCSL online outside expert and stakeholder resource page

  • Hepatitis C
    • (Update/Opinion article) Follow California’s Lead: Treat Inmates With Hepatitis C
      On July 1, California passed a budget allocating $105.8 million to treat the 22,000 inmates with hepatitis C currently held in its state prisons. Other states should follow California’s lead and increase funding for hepatitis C care.  Health Affairs blog, July 24, 2018. By Adam Beckman, Alyssa Bilinski, Lisa Puglisi, Talya Lockman-Fine, and Gregg Gonsalves

    • "Costly Cures:" Hepatitis C Sets the Bar -"Effective but very expensive drugs are forcing state Medicaid directors to make some tough decisions. NCSL State Legislatures Magazine, February 2017. by Michael Booth 

    • Overview | Read NCSL's full report | This report provides information about Hepatitis C and state policy resources associated with Hepatitis C.  Hepatitis C is a leading cause of liver disease, including liver cancers and failure. However, new treatments for hepatitis C are curing more people than before.
    • Treating Hepatitis C - by NCSL | Read full report
    • Evolving Hepatitis C Drug Coverage Policies: Seeing the Bigger Story | Read the full article.  With threats of lawsuits and pressure from government officials, some payers appear to be relaxing their coverage guidelines for expensive direct-acting antiviral drugs (DAAs), including drugs for Hepatitis C. The benefits that increased access to these drugs provide to patients with Hepatitis C— and to the drugs’ manufacturers and investors—will come at the expense of state budgets and, more importantly, broader discussions about matching demand for health care services to limited resources. In the face of list prices in the range of $80,000 per patient, a high number of infected enrollees, and a disease in which many patients remain asymptomatic, most Medicaid agencies and their contracted managed care organizations initially limited access to the first DAA—Sovaldi—to more severely afflicted patients. New market entrants have resulted in price discounts of 30% to 40%, strengthening the argument for the value of competitive markets and creating pressure on payers—even at the still hefty cost of $55,000 per treatment before rebates—to broaden access. Different state Medicaid agencies have different access guidelines, which are not all equally supported by evidence. Faced with smaller expense impacts, many commercial and Medicare insurers have less restrictive coverage rules. (Posted by Milbank Memorial Fund, 6/24/2016.

    • Hepatitis C: The Fundamentals - This NCSL page contains an audio recording of a conference call on the fundamental of Hepatitis C for legislators and legislative staff. Listen to the call | July 29, 2014
  • Epinephrine medication to counteract severe allergic reactions
    • Feds finalize $465M Mylan settlement for EpiPen overcharges. "Resolving an issue that fueled nationwide debate over soaring drug costs, the agreement ends an investigation that found Mylan avoided paying state Medicaid programs higher EpiPen rebates by improperly classifying the brand name drug as a generic medication. Prices increased 400% between 2010 and 2016. Full article, published in USA Today, 8/18,2017.
    • "While $465 million is nothing to balk at, it's surely a sigh of relief for Mylan. That's because, when the HHS revealed its $1.3 billion in EpiPen overcharges, it appeared as though Chuck Grassley, a Republican Senator from Iowa and the chairman of the Senate Judiciary Committee, wasn't about to let the company settle." Excerpt from trade journal BioPharmaDive, 8/17/2017.
    • Increasing Access to Epinephrine. NCSL LegisBrief by Ashley Noble - - published April 2016 [may require password]
      Children and Food Allergies. NCSL LegisBrief by Ashley Noble - - published August 2014
    • Beyond EpiPen: Prices of Lifesaving Epinephrine Products Soar. This September 2016 report discusses how "Competition has failed to drive down prices, leaving policymakers demanding answers." By The Pew Charitable Trusts, Sept. 22, 2016,

Disclaimer: NCSL is not responsible for the opinions expressed by third party publishers and presenters.  Links are provided as a convenience to state researchers.

Specialty Drugs Web Portal by PEW

Reports from diverse sources that relate to state actions

  • 2018 Specialty Drug Benefit Report - This PBM Institute 2018 edition highlights the increasing attention that specialty pharmacy is receiving from employers. It helps to identify the degree to which specialty pharmacy issues are understood in the employer marketplace. 7/18.
  • The Drug Trend Report: Specialty Drug statistics - Express Scripts, 4/17.
  • "Laws to Shed Light on Drug Pricing... May not Work".  NCSL cited.  Pharmalot.com, 8/16/2016
  • Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design - National Pharmaceutical Council, Center for V-BID, 2016.
  • Specialty Tier Pharmacy Benefit Designs - Report by Robert Wood Johnson &  Georgetown University, August 2014
  • "Angry Over Drug Prices, More States Push Bills for Pharma to Disclose Costs" - NCSL data used and quoted, “While it is too soon to know if this prescription transparency legislation will continue to expand this year,” says Richard Cauchi, the program director for health insurance, financing and pharmaceuticals at the National Conference of State Legislatures, “state legislators often do look at what their colleagues in other states are doing.”  Wall Street Journal, April 24, 2015.
  • The Cost and Impact of Adverse Events: Anti-Inflammatory Drugs. -  "Anti-inflammatory drugs held the top spot for specialty drug spend in 2014, at $80.03 per
    member per year (PMPY), representing 24.3% of all spend for specialty medications, according to Express Scripts’ 2014 Drug Trend Report. This therapy class saw an 8.5% increase in utilization and a 15.7% increase in cost, which the report speculated was likely attributable to brand inflation, as Humira and Enbrel accounted for more than 80% of the market share in 2014."  [Link to intro and background, published and posted by AIS, August 2015] 
  • Mass. bill seeks to rein in prices of some drugs. [Link to full article] "Drug companies are facing a new campaign to contain treatment costs, this time with proposed rules in Massachusetts that would include a first-in-the-nation cap on some prices. An alliance of lawmakers, consumers, and health insurers is pushing for a law that would force biotechnology and pharmaceutical companies to justify their prices by disclosing how much they spend on research, production, and marketing." Boston Globe, 8/10/2015. 

  • Specialty Drugs- Issues and Challenges - Issue brief published by AHIP (America's Health Insurance Plans), June 2014. Link to report
  • Medicaid Covered Outpatient Drugs: Methodology for Calculating the National Average Drug Acquisition Cost (NADAC)  - published by CMS/HHS, November 2013 | Link to report
  • Specialty-Tier Prescription Drugs: Report to the Delaware General Assembly, Prepared by the Delaware Health Care Commission, March 15, 2012 | Link to report
  • Prescription Drug Prices in New York State: Search Drug Prices ​- a consumer user database, 2014 | Link to price lists
  • Preparing for Cholesterol Super Statins: Strategies to Mitigate the Coming PCSK9 Cost Explosion.  "As two drug makers race to launch the first of several injectable drugs in an emerging class of powerful cholesterol-lowering medications, health plans and PBMs are growing increasingly anxious about how these agents will impact drug costs. Known as PCSK9 inhibitors, the injectable therapies appear to be superior to the standard statin therapy used to treat millions of Americans. But they come with a series of unknowns that are unnerving payers, starting with ... how many patients are likely to qualify for a treatment that could cost thousands of dollars a year. Leading PBMs have been vocal about their plans to engage manufacturers in price wars similar to those in 2014-2015 that resulted in negotiated discounts for expensive hepatitis C agents. But unlike hepatitis C, there is no cure for high cholesterol and patients could be treated with these "super statins" for life. Hear two industry experts discuss the potential upside and downside to the market entry of PCSK9 inhibitors and share strategies for reining in costs before they spiral out of control." August 2015. AIS Health products - for sale only: an On-Demand Recording.
  • The Analysis Group report released January 17, 2013: Innovation in the Biopharmaceutical Pipeline: A Multidimensional View.
  • A guide for understanding out-of-pocket spending- A consumer-friendly calculator that can display medication costs by coverage, state and product.  Posted by "Putting Patients First" a project of the National Health Council, 2014 [Link to cost guide]
  • January 2012 Report - Trends in Retail Prices of Specialty Prescription Drugs Widely Used by Medicare Beneficiaries 2005 to 2009
  • Baby Boomer Screening for Hepatitis C.  Aug 4, 2014.  This report provides information about Baby Boomer Screening for Hepatitis C. Seventy-five percent of those infected with hepatitis C are baby boomers.

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    This information is made possible through the generous support of the Pew Charitable Trusts.

    (2014-September 2017) For more information, members can contact the Health Program's Pharmaceutical Project.

    About the authors.

    Richard Cauchi, program director, NCSL Health Program-Denver
    Ashley Noble, former policy specialist, NCSL Health Program-Denver