Admittedly, the headline from a recent Express Scripts'
The 2006 Express Scripts Specialty Drug Trend Report indicates that spending on specialty drugs increased 17.5% in 2005; by contrast, spending on conventional prescription medicines rose 10%. The $40 billion spent on specialty medications last year still represents a relatively small proportion of total spending on all drugs, at about 19% of the bill. However, Express Scripts expects that to change rapidly. In just three years, outlays on such treatments are expected to more than double to $90 billion, which is projected to be 28% of the total drug expense at that time.
The burgeoning growth in specialty-drug sales bodes well, of course, for makers of biotech drugs, which make up a large portion of the specialty drug category. Express Scripts singled out growth in the anti-inflammatory category -- which includes products from companies like Amgen
At the same time, the expansion in the sales of biologics will undoubtedly provoke aggressive responses to contain costs. Express Scripts and other PBMs like Medco
Given the current cost dynamics, Food and Drug Administration approval of a pathway for clearance biogenerics appears inevitable, and more likely sooner rather than later. As a result, investors may want to investigate companies equipped to offer biogenerics, including Novartis
Biotech. Nanotech. High-tech. Any tech. David Gardner and his Foolish band of analysts cover it all for Motley Fool Rule Breakers , and they've unearthed four multibagger picks as of this writing. Find out the names of these market-beaters by asking us for a 30-day all-access pass to Rule Breakers. It's free, which means all you have to lose is the prospect of richer returns.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
More from The Motley Fool
Solar Companies Are Set Up for a Strong Earnings Season
Rising demand and prices for solar panel prices bode well for manufacturers.
Today's Workers Aren't Optimistic About Raises and Promotions, Data Shows
Surprisingly, a large number of workers across the globe think their chances of a pay or title boost are pretty low. Here's how to bust out of that cycle and propel your career forward.
Could These High-Flying Tech Stocks Start Paying a Dividend?
Alphabet, Facebook, and Adobe don't do it yet, but that could change sooner than you think.