What Exactly Are Specialty Drugs? A Guide to Which Drugs Are Considered Specialty Drugs

October 9, 2025 •

4 min read

Accounting for a disproportionately large share of total drug spending—often over 50% despite representing a small fraction of prescriptions—specialty drugs are a critical and growing area of modern medicine. This guide helps answer the complex question: Which drugs are considered specialty drugs?

Quick Summary

Specialty drugs are high-cost, complex medications used for chronic or rare diseases. They often require specialized handling, are distributed via specific pharmacies, and need high-touch patient monitoring due to their administration methods and potential side effects.

Key Points

High Cost: Specialty drugs are exceptionally expensive, often costing thousands of dollars per month, due to complex manufacturing and development.
Complex Treatment: They are used for rare, chronic, or complex conditions like cancer, multiple sclerosis, and rheumatoid arthritis.
Special Handling: Many are biologics derived from living organisms that require special storage, shipping, and handling, such as refrigeration.
Limited Access: They are typically distributed only through specialty pharmacies, not traditional retail pharmacies.
High-Touch Care: Due to the nature of the drugs and diseases, patients require extensive clinical monitoring, education, and support from a specialized pharmacy team.
Administration Methods: Most specialty drugs are administered via injection or infusion, though some are oral.

The definition of a specialty drug has evolved, but it consistently refers to a class of medications used to treat complex, chronic, or rare medical conditions. Unlike traditional pharmaceuticals that are chemically synthesized, many specialty drugs are biologics—derived from living organisms—and are at the forefront of modern medical breakthroughs. These factors contribute to their high cost, intricate management requirements, and impact on the healthcare system. While representing only a small percentage of total prescriptions, they drive a significant portion of drug expenditures.

Defining Characteristics of Specialty Drugs

Several key attributes distinguish specialty drugs from their traditional counterparts. There is no single universal definition, but these characteristics provide a comprehensive understanding of what makes a drug a 'specialty' medication.

High Cost

This is one of the most prominent features. Specialty drugs typically carry a very high price tag, often costing thousands of dollars per month or per claim. This is often due to the extensive research and development involved, the complex manufacturing processes, and the smaller patient population for whom these drugs are intended. Medicare, for instance, has a cost-based definition, considering drugs over a certain monthly cost threshold as specialty.

High Complexity

Many specialty drugs are complex biologic medications, such as monoclonal antibodies, gene therapies, and enzyme replacement therapies. Because they are derived from living sources, they are more difficult and expensive to manufacture than standard chemically synthesized drugs. This complexity also dictates the need for special handling, storage, and shipping protocols, including strict temperature controls.

High-Touch Patient Management

Patients taking specialty drugs often have serious, life-threatening conditions and require comprehensive support. This includes:

Extensive Monitoring: To track the drug's effectiveness and manage potentially severe side effects.
Patient Education: Training on how to properly administer self-injected medications and manage their condition.
Adherence Support: Counseling and reminders to ensure consistent and appropriate use of the medication.
Care Coordination: Collaboration between pharmacists, physicians, and other healthcare professionals to ensure optimal treatment outcomes.

Limited Distribution

Due to their special handling, storage, and monitoring requirements, specialty drugs are often not available at traditional retail pharmacies. Instead, they are dispensed through a limited distribution network, typically via dedicated specialty pharmacies. Manufacturers may restrict access to ensure patient safety and proper management, sometimes as part of a Risk Evaluation and Mitigation Strategy (REMS) mandated by the FDA.

Therapeutic Areas and Examples

Specialty drugs are used to treat a wide array of complex and chronic illnesses. Some of the most common therapeutic areas include:

Autoimmune Disorders: Such as rheumatoid arthritis, Crohn's disease, psoriasis, and multiple sclerosis. Examples include adalimumab (Humira), etanercept (Enbrel), and natalizumab (Tysabri).
Oncology (Cancer): Including targeted therapies and advanced chemotherapy agents like pembrolizumab (Keytruda).
Rare Genetic Diseases: Often treated with enzyme replacement therapies or gene therapies, such as alglucosidase alfa for Pompe's disease.
Hepatitis C: Medications like sofosbuvir (Sovaldi) and ledipasvir/sofosbuvir (Harvoni) revolutionized treatment for this condition.
Infectious Diseases: Including certain treatments for HIV/AIDS.
Hemophilia: Requiring complex, often infused, treatments.

Specialty vs. Traditional Drugs: A Comparison


Characteristic	Specialty Drugs	Traditional Drugs
Cost	Very high, often thousands of dollars monthly	Much lower, typically hundreds of dollars or less
Complexity	High; often complex biologics	Low; typically small-molecule compounds
Conditions Treated	Complex, chronic, rare (e.g., cancer, MS, hemophilia)	Common, acute, and chronic (e.g., high blood pressure, infections)
Distribution	Limited to specialty pharmacies	Widely available at retail and mail-order pharmacies
Administration	Often injections or infusions; some oral	Most commonly oral tablets or capsules
Patient Management	Requires extensive clinical monitoring and patient support	Standard dispensing and follow-up

The Unique Role of the Specialty Pharmacy

Because of the complexities associated with specialty drugs, a dedicated healthcare ecosystem has developed around them: the specialty pharmacy. These pharmacies go far beyond simply dispensing medication. They provide critical services that include:

Handling and Storage: Adhering to the specific temperature and handling requirements of these sensitive medications.
Patient Training: Educating patients on proper administration techniques and answering complex questions.
Insurance Navigation: Assisting with the often-demanding prior authorization process and helping patients access financial assistance programs.
Clinical Support: Providing ongoing follow-up and monitoring to ensure patient adherence and manage side effects.

Conclusion

Understanding which drugs are considered specialty drugs is essential for navigating modern healthcare. Their defining features—high cost, clinical complexity, and the need for specialized management—make them distinct from traditional pharmaceuticals. While they represent a significant financial challenge for healthcare systems and patients, these innovative treatments offer life-changing therapies for those with complex and debilitating conditions. The emergence of biosimilars, which are often less expensive versions of biologics, offers a potential avenue for cost savings while maintaining therapeutic effectiveness. The continued evolution of specialty drugs underscores the importance of a coordinated care approach involving patients, prescribers, and specialty pharmacies to ensure access and optimal outcomes.

Learn more about navigating the complex landscape of specialty drug management.

Frequently Asked Questions

The main differences lie in their cost, complexity, and conditions treated. Specialty drugs are high-cost, often complex biologics for rare or chronic conditions, requiring specialized handling and distribution. Traditional drugs are typically lower-cost, chemically synthesized, and treat more common ailments, available at most retail pharmacies.

The high cost is due to several factors, including the expensive research and development for complex treatments, intricate manufacturing processes for biologics, and a smaller patient population over which to spread the costs.

Specialty drugs are used for a wide range of complex conditions, including autoimmune disorders (like rheumatoid arthritis and Crohn's disease), cancer, multiple sclerosis, hepatitis C, HIV/AIDS, and rare genetic diseases.

While some are oral, many specialty drugs require administration via injection or intravenous (IV) infusion. This may be done by the patient at home or require professional administration in a doctor's office or infusion center.

Specialty drugs are dispensed exclusively through specialty pharmacies, not traditional retail pharmacies. These specialized pharmacies have the necessary expertise for handling, storage, and managing patient care for these complex medications.

Specialty pharmacies provide extensive support, including patient education on medication use, monitoring for side effects, coordinating prior authorizations with insurance, and helping patients access financial assistance programs.

A biologic is a type of specialty drug derived from living organisms, such as proteins, cells, or tissues. They are structurally complex and often target specific disease pathways in the body.