title: Despite high costs, specialty drugs may offer value for money comparable to that of traditional drugs.
abstract: Specialty drugs are often many times more expensive than traditional drugs, which raises questions of affordability and value. We compared the value of specialty and traditional drugs approved by the Food and Drug Administration (FDA) in the period 1999-2011. To do this, we identified published estimates of additional health gains (measured in quality-adjusted life-years, or QALYs) and increased costs of drug and health care resource use that were associated with fifty-eight specialty drugs and forty-four traditional drugs, compared to preexisting care. We found that specialty drugs offered greater QALY gains (0.183 versus 0.002 QALYs) but were associated with greater additional costs ($12,238 versus $784), compared to traditional drugs. The two types of drugs had comparable cost-effectiveness. However, the distributions across the two types differed, with 26 percent of specialty drugs--but only 9 percent of traditional drugs--associated with incremental cost-effectiveness ratios of greater than $150,000 per QALY. Our study suggests that although specialty drugs often have higher costs than traditional drugs, they also tend to confer greater benefits and hence may still offer reasonable value for money.
authors.affiliation: James D. Chambers (jchambers@tuftsmedicalcenter.org) is an investigator at the Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center, and an assistant professor of medicine in the School of Medicine, Tufts University, in Boston, Massachusetts.
authors.forename: James D
authors.initials: JD
authors.lastname: Chambers
authors.affiliation: Teja Thorat is a research associate at the Center for the Evaluation of Value and Risk in Health, Tufts Medical Center.
authors.forename: Teja
authors.initials: T
authors.lastname: Thorat
authors.affiliation: Junhee Pyo was a research associate at the Center for the Evaluation of Value and Risk in Health, Tufts Medical Center, when she worked on this article. She is currently preparing to enroll in a Ph.D. program to earn a doctorate in health economics.
authors.forename: Junhee
authors.initials: J
authors.lastname: Pyo
authors.affiliation: Matthew Chenoweth is a research associate at the Center for the Evaluation of Value and Risk in Health, Tufts Medical Center.
authors.forename: Matthew
authors.initials: M
authors.lastname: Chenoweth
authors.affiliation: Peter J. Neumann is director of the Center for the Evaluation of Value and Risk in Health, Tufts Medical Center, and a professor of medicine in the School of Medicine at Tufts University.
authors.forename: Peter J
authors.initials: PJ
authors.lastname: Neumann
mesh_terms: D016527:Drug Costs; D017048:Health Care Costs / Q000706:statistics & numerical data; D006801:Humans; D055553:Prescription Drugs / Q000191:economics* / Q000627:therapeutic use; D019057:Quality-Adjusted Life Years; D016896:Treatment Outcome
chemical_list: D055553:Prescription Drugs
keywords: Health Economics; Medical technology; Pharmaceuticals