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Health Insurance Glossary

Definitions for common health insurance terms

specialty drug

DEFINITION: Specialty drugs are high-cost prescription medications used to treat complex, chronic conditions like cancer, rheumatoid arthritis and multiple sclerosis.

Specialty drugs often require special handling (like refrigeration during shipping) and administration (such as injection or infusion). Patients using a specialty drug often must be monitored closely to determine if the therapy is working and to watch for side effects.

Specialty drugs might be covered through either medical or prescription drug insurance. How a specialty drug is covered usually depends on where the patient receives the drug.

If the patient takes a pill or self-injects the drug at home, it is more likely to be covered through his or her prescription drug benefit. If the patient receives the drug at a doctor’s office or an outpatient clinic, it’s more likely to be covered through the medical benefit.

Specialty drugs are very expensive – $1,000 or more per month – and spending on them is growing 15 to 20 percent a year. Many prescription drug plans that cover specialty drugs have a separate “tier” that specifies how much an individual has to pay for specialty drugs. Individuals may be required to pay a percentage of the drug cost or a flat-dollar copay.

Many drugs manufacturers offer patient assistance programs to help people with and without insurance get access to specialty drugs.