The dermatology market in the U.S. is at a pivotal moment of transformation, with spending poised to climb from $40.55 billion in 2023 to $70 billion by 2030. This unprecedented growth mirrors past instances where blockbuster therapies revolutionized treatment for common conditions – from high blood pressure and cholesterol to anxiety and depression – but also triggered unsustainable cost trends.
Can we avoid repeating history with dermatological drugs? We can, but it will take a strategic approach to leveraging biosimilars, optimizing pharmacy benefits plan designs, and fostering collaboration between key stakeholders to deliver long-term cost sustainability without compromising patient care. In short, plan sponsors need proactive, data-driven approaches that help balance affordability and access.
Here are five key insights to help you stay ahead of the curve.
1. Psoriasis is driving specialty drug growth
Psoriasis, which affects more than 7.5 million Americans, is becoming one of the fastestgrowing segments in dermatology. Treating this chronic autoimmune condition often requires high-cost specialty drugs like Stelara or Tremfya, with annual costs exceeding $160,000 per patient. Between 2019 and 2023, the use of immunology drugs for conditions like psoriasis surged by 60%, making it a major contributor to rising healthcare expenses.
2. Psoriasis treatments are following the GLP-1 trajectory
Specialty drugs for psoriasis are following a similar path as previous blockbusters, including GLP-1 medications, which, after initially launching as a treatment for one condition, went on to obtain expanded approvals for many more indications. For instance, Dupixent, after an initial market launch for eczema in 2017, has gone on to transform the pharmaceutical landscape with a growing number of indications, including Crohn’s disease and ulcerative colitis, significantly broadening its market and impact on plan costs.
3. Biosimilars could reshape the cost landscape
Biosimilars, when leveraged appropriately, could offer a promising solution to counter the high cost of specialty brand drugs. Case in point – Humira’s biosimilars are starting to disrupt the market as the leading pharmacy benefits managers finally begin prioritizing these alternatives over legacy brands. However, deep-rooted manufacturer rebate agreements and hesitancy from pharmacy benefits plans have delayed the widespread adoption of biosimilars. Healthcare leaders must push for plan design changes and increased education to make biosimilars a viable cost-saving option.
4. Impact of direct-to-consumer advertising
Direct-to-consumer advertising has been shown to significantly influence awareness and demand, and psoriasis drugs have seen some of the highest advertising investments across the pharmaceutical industry in recent years. For example, in 2023, the leading psoriasis drug, Skyrizi, accounted for nearly $580 million in ad spending. This aggressive marketing drives higher patient inquiries and prescriptions, putting further pressure on budgets to accommodate the demand.
5. Strategic solutions for hospital pharmacies to manage rising costs
Navigating the growth of the dermatological market requires proactive strategies to manage escalating costs. Hospital pharmacy leaders should consider how to:
- Ensure clinically justified dermatological treatments: Diagnosing psoriasis is inherently subjective because it lacks clear clinical indicators, which could lead to much broader utilization by patients with mild, largely cosmetic symptoms. Careful evaluation of new treatment requests based on their clinical efficacy and consideration of step therapies before more costly specialty medications are prescribed can help curb unnecessary expenditures while prioritizing patient care needs.
- Stay ahead of the treatment pipeline: Proactively monitoring the drug pipeline is critical. The psoriasis treatment landscape is set to expand with up to 10 additional drugs currently seeking FDA approval. In addition, emerging therapies like bimekizumab and JAK inhibitors are poised to impact budgets and reshape market dynamics. This influx promises new patient options but also challenges hospitals in balancing access and costs. Advanced planning around formularies and budget forecasting will be key to mitigating the financial impact of these expected new treatments.
The Bottom Line
The rapid evolution of the U.S. dermatology market presents an opportunity to address important medical needs while advancing cost-effective solutions. The pipeline of emerging therapies for Psoriasis is likely to drive dramatic growth. While biosimilars offer a viable path to rein in costs, advocacy, education, and plan design will play key roles in delivering cost savings.
Hospital pharmacy leaders and stakeholders in the healthcare ecosystem must take a proactive, collaborative approach to ensure a balance between access to innovative treatments and affordability. As a pharmacy benefits optimizer, RxBenefits can be an indispensable partner, empowering hospital pharmacies to meet these challenges headon with the right insights and strategies to help plans adapt to the evolving pharmaceutical market for dermatological drugs.
To learn more about how RxBenefits supports pharmacy leaders, visit our Hospital Solutions page.
