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In the second part of her Pharma Commerce video interview Megan Wetzel, VP, product, access & affordability at CoverMyMeds, describes how high development costs, personalized treatment models, and an aging population are intensifying the imbalance.
According to Megan Wetzel, VP, product, access & affordability, CoverMyMeds, specialty drugs continue to account for a disproportionate share of US drug spending despite representing only a small percentage of prescriptions. Several key factors contribute to this imbalance, and chief among them are the complexity, cost, and specificity of specialty therapies.
Unlike traditional retail drugs, specialty medications are designed to treat serious, chronic, or rare conditions and often require specialized handling, monitoring, and administration. Many must be administered in clinical settings such as hospitals or physicians’ offices rather than through retail pharmacies. These requirements add layers of logistical and operational costs throughout the treatment process.
In 2024, specialty drugs represented 93% of all new US drug launches, reflecting the industry’s increasing focus on advanced, targeted therapies. This surge has been driven by massive R&D investment, with biopharma research spending exceeding $100 billion last year—a 44% increase over 2023. Much of this funding has been channeled into developing complex, high-value specialty treatments.
However, these therapies are inherently expensive to produce and often serve smaller patient populations, driving up per-patient costs. The personalized nature of these drugs, longer development timelines, and limited market competition further compound pricing challenges.
Adding to the pressure, demographic trends such as the rise in chronic disease and an aging population continue to increase demand for these medications. The U.S. population aged 65 and older is projected to reach 63 million this year, a 9% jump since 2022, and climb to 82 million by 2050.
Ultimately, Wetzel noted, the imbalance stems from the intricate science, individualized care, and high economic stakes behind specialty medicines, factors that will only grow more prominent as healthcare becomes increasingly specialized and patient-centric. She also dives into the role of field reimbursement managers in helping patients access specialty medications; considerations that should guide insourcing, outsourcing, or adopting a hybrid model for field reimbursement support; and much more.
A transcript of her conversation with PC can be found below.
PC: What underlying market or access factors are contributing to the disproportionate spending on specialty drugs?
Wetzel: It’s a great question. It's one we hear all the time as well, and honestly, there's a couple of different factors that play into it. Specialty medications are incredibly powerful, but they're also very, very complex. They're designed really to treat those serious chronic conditions, and that means they come with very high development costs. They have very rigorous—even more so than traditional retail drugs—approval processes, and they really have specialized care.
Sometimes they're administered in the doctor's office, sometimes they're administered in a hospital setting. It's not just something you typically can pick up at your retail store. We do have a couple of stats that I wanted to share around the complexities of specialty medications.
They actually made up 93% of the US drug launches in 2024, which to your point, despite having a much smaller share of total prescriptions, the number of drug launches around specialty has been quite high. To your point, there's a bit of an imbalance there, and that imbalance is from several factors, so like I said, very high R&D investment. Biopharma R&D reached over $100 billion in 2024, so a 44% increase over the previous year. Much of that R&D has been directed towards specialty therapies, which is exciting in our world.
You want to see those specialty complex chronic conditions get the attention that they need, but it takes much longer R&D times, much more spend, but they do typically treat a much smaller amount of patients, just given their complexity of the therapies that they're looking to treat. The complexity of treatment is really personalized too, when it comes to administration, so it's not really one size fits all.
When we're talking about multiple patients that can take that therapy, you typically have to monitor that patient. It's administered in a different setting, most of the time. It's probably not something you can administer yourself. This is just kind of increases that overall cost that it takes to think about specialty meds.
I'd also just like to point out that these therapies typically launch with premium pricing. Because they're so high when it comes to R&D investment, you also have to think about kind of the pricing that comes with these specialty medications. Not every patient not only has this condition, but not every patient can afford these therapies. It’s very limited competition. It's very specific to the therapy that comes to market, but overall, we know that there's going to be a growing need for these medications. We know that we've got a growing aging population, so we've got a rise in these chronic conditions. We've got a rise in the aging patient population.
We expect by the end of this year that Americans 65 and older is expected to rise to 63 million, which is a 9% increase over 2022, and we also expect by 2050, it'll search to 82 million. We know that these specialty medications and these chronic conditions are going to continue to rise, but typically, to kind of circle back to your question, typically, it's because these medications are very complex conditions for very specific therapies, and so you typically see a smaller patient population, but they're more complex in nature when it comes to R&D.
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