Pharmacy Benefits Glossary
A guide to general pharmacy benefits terminology.
- What Are Specialty Drugs?
- Buy-And-Bill vs. Bagging
- White Bagging
- Brown Bagging
- Clear Bagging
- Gold Bagging
- What Are Specialty Drug Research and Development Processes?
- Orphan Drug Status
- Fast Track Designation
- Breakthrough Therapy Designation
- Priority Review
- Patient Support and Specialty Pharmacies
- Future Trends in the Specialty Drug Market
What Are Specialty Drugs?
Specialty drugs are high-cost, complex medications intended to treat challenging, rare, or chronic health conditions with otherwise limited therapeutic options. Examples of conditions or diseases that call for specialty drug options include:
- Cancer
- Multiple sclerosis
- Rheumatoid arthritis
- Crohn’s disease
- Ulcerative colitis
- Psoriasis
- Hemophilia
- Hepatitis C
- Infertility
Specialty drugs include biologics, which are treatments derived from living cells. These cells may come from humans, animals, or microorganisms like bacteria. Examples of biologics include monoclonal antibodies for cancer treatment and autoimmune diseases.
- The need for refrigeration: These medications often require controlled temperatures to maintain stability and effectiveness, complicating proper storage at the pharmacy and home and increasing the risk of patient harm.
- Complex administration procedures: Specialty drugs often necessitate more complex administrations, such as injections or infusions, like an intravenous drip. This can require professionals in a clinical setting to accurately ensure the right dose and safety observed.
- The need for careful patient monitoring and support: Treatment can involve side effects, adverse events, patient education, and coordinated care, all of which present unique challenges.
Buy-And-Bill vs. Bagging
The process of administration and coverage of specialty drug costs have often followed a “buy-and-bill” process, where clinics or hospitals purchase specialty drugs directly from manufacturers or distributors and store them until administered, at which point they submit a claim to a third-party payor for reimbursement.
Challenges in the proper transportation and care of specialty drugs have led to four proposed methods for managing how they are purchased, administered, and reimbursed.
White Bagging
A specialty pharmacy dispenses and ships a specialty drug to a healthcare provider, which stores the drug until a predetermined patient appointment. This requires added coordination efforts to streamline distribution.
Brown Bagging
The patient obtains the drug from an approved specialty pharmacy and takes it with them to their healthcare provider for administration, transferring risk and responsibility to the patient.
Clear Bagging
Clear bagging involves a carefully selected internal specialty pharmacy owned by the patient’s provider, which transports the drug to the administration location.
Gold Bagging
The healthcare system manages prescribing, dispensing, and administering the drug through a specialty pharmacy.
What Are Specialty Drug Research and Development Processes?
The research and development process for specialty drugs involves numerous efforts and initiatives to facilitate studies, standards, research, and data sharing. This includes specialty labs providing data on safety and effectiveness and FDA standards ensuring consistency in exchanged data.
Orphan Drug Status
The FDA’s orphan drug status grants tax credits for clinical trials, other fee exemptions, and the potential for seven years of market exclusivity after drug approval.
Fast Track Designation
The FDA’s fast track designation expedites specialty drug development with accelerated reviews and approvals.
Breakthrough Therapy Designation
The FDA grants this designation to speed up specialty drug development and review. Specialty drugs must show substantial improvement over existing therapies. The breakthrough therapy designation encourages innovation, hence the name.
Priority Review
The FDA’s priority review helps expedite specialty drug approvals by aiming for application decisions within 6 months instead of the more common 10-month approval process.
Patient Support and Specialty Pharmacies
Specialty pharmacies provide patient support services, including educating patients on the proper administration of high-alert medications, proper storage and in-home use, and providing assistance where needed.
These pharmacies provide reminder calls to help patients with details about administering drugs and refills, assist patients in managing adverse events from their treatment regimen, and help mitigate the negative effects of drug administration.
Future Trends in the Specialty Drug Market
As biologics continue to advance, we will see millions of lives saved and an increase in quality of life. Likewise, the future promises cost savings through the wider adoption of biosimilars, providing the market with affordable alternatives to therapeutics for conditions like diabetes and immunology.
PBMs will be increasingly instrumental in improving patient adherence through education initiatives, developing healthcare apps like medication timers and exercise regimens, and fostering better relationships between providers, pharmacies, and patients.
Patients who need better alternatives for chronic illnesses and rare diseases are afraid of potential specialty drug side effects, high costs, and other concerns that require better support across the healthcare industry.
