Specialty Drugs: The New Infrastructure Behind Pharma Growth

The pharmaceutical industry is entering an era in which some of its most important products are also among its most difficult to finance, distribute, administer, and manage.

Specialty medications sit at the center of that shift. Unlike traditional prescriptions, they are typically high-cost and clinically complex, and they may require specialized handling, administration, monitoring, or patient support. Just as importantly, they do not fit neatly into the traditional pharmacy model. Depending on the drug and route of administration, a specialty therapy can be covered through the pharmacy benefit, the medical benefit, or both, and can move through specialty pharmacies, home infusion providers, infusion centers, hospital outpatient departments, or physician offices.

That complexity matters because the growth of specialty medicine is creating an economic opportunity that extends beyond drug manufacturers. As more innovative therapies enter the market — particularly in oncology, immunology, rare diseases, and cell and gene therapy — the infrastructure surrounding those drugs is becoming increasingly valuable.

For investors, the opportunity is shifting from simply asking who develops the drug to asking who controls its journey from manufacturer to patient.

Specialty drug growth is becoming a cost-management problem

The clearest signal comes from the organizations paying for these therapies.

According to PSG's latest Trends in Specialty Drug Benefits Report, managing specialty drug costs is now the single most important objective for payers. 43% of respondents ranked managing overall specialty drug trend and costs as their top priority, while another 37% ranked managing total cost of care first. No other objective came close: transparency ranked first for just 7% of respondents, while reducing inappropriate utilization was selected by 5%.

The challenge is no longer simply negotiating the price of existing products. PSG found that the highest-rated problem facing payers is developing coverage strategies for new specialty drugs and expanded indications. Access to integrated medical and pharmacy data, member affordability, and achieving cost parity across pharmacy and medical benefits followed closely behind.

That distinction is important. Specialty drug cost pressure increasingly reflects a pipeline and utilization problem as much as a unit-price problem. New therapies continue to expand the number of treatable patients, while existing drugs gain indications that enlarge their addressable populations.

The result is a moving target for payers. They are not managing a static pool of expensive drugs; they are managing a continuously evolving portfolio of therapies, indications, administration routes, reimbursement structures, and patient populations.

The previous PSG report already showed how concentrated this challenge had become. Patients using specialty medications represented nearly 6% of commercially insured members, despite specialty drugs accounting for a disproportionately large and growing share of overall drug spending.

For healthcare investors, that imbalance is critical: a relatively small patient population can generate an outsized amount of pharmaceutical spending — and therefore an outsized need for specialized infrastructure to manage it.

The old pharmacy vs. medical benefit divide is breaking down

Specialty medications also challenge one of the basic structural divisions in U.S. healthcare: the separation between pharmacy and medical benefits.

Traditional prescriptions generally flow through the pharmacy benefit. But many specialty medications — particularly infused or provider-administered drugs — can be reimbursed through the medical benefit. The exact pathway depends on the drug, route of administration, plan design, and site of care.

That creates a fragmented system in which the same payer may effectively manage specialty pharmaceutical spending through two different benefit structures.

Payers are responding by trying to manage the two sides together. In PSG's 2025 report, 72% of plans reported having a medical drug formulary. Among health plans, 44% said optimizing their specialty formulary across pharmacy and medical benefits was a major focus and another 38% described it as a moderate focus. Most health plans also reported having processes in place to manage their specialty formulary across both benefits.

The direction of travel is toward cross-benefit management.

That has strategic implications for the healthcare value chain. Organizations capable of integrating pharmacy and medical claims, identifying the lowest-cost treatment pathway, managing formularies across benefits, and directing patients toward the appropriate dispensing or administration channel become increasingly important.

It also changes what “pharmacy management” means. The competitive advantage is no longer simply negotiating a lower acquisition price. It increasingly depends on visibility across the patient's entire specialty journey.

This helps explain why specialty pharmacy, PBM capabilities, infusion management, data analytics, and patient-support services are beginning to overlap. Each solves a different piece of the same problem: getting an expensive therapy to the right patient through the economically and clinically appropriate channel.

Specialty pharmacies are moving to the center of the system

Specialty pharmacies are perhaps the clearest beneficiary of this complexity.

Their role goes beyond dispensing. Depending on the therapy and pharmacy, services can include clinical support, patient education, adherence monitoring, reimbursement assistance, coordination with providers, and specialized logistics.

Payers increasingly structure their networks accordingly. PSG's latest survey found that 63% of plans use an exclusive specialty pharmacy network, meaning dispensing is restricted to one or a small number of selected specialty pharmacies. Adoption reaches 77% among health plans, compared with 55% among employers. Another 10% of respondents are considering adopting an exclusive network.

This creates scale advantages for specialty pharmacies that can win preferred or exclusive relationships. Concentrating volume through fewer pharmacies can improve purchasing leverage, data visibility, clinical oversight, and patient management. It also makes access to payer networks increasingly important for operators.

But there is an interesting contradiction.

Despite the increasing strategic importance of specialty pharmacies, payers do not necessarily see enormous differentiation between them. PSG asked respondents to rate specialty pharmacies on a scale from 1 — essentially interchangeable in terms of patient care — to 10, meaning they differ meaningfully. The average score was only 5.9. Health plans were even less convinced, with an average of 5.5, and roughly one-third gave ratings leaning toward the view that specialty pharmacies are largely similar.

Similarly, while 70% of respondents rated the clinical and care-management support from specialty pharmacies as at least “good,” only 20% gave them the highest rating of “very good.”

For investors, that gap may be more interesting than the headline growth itself.

Specialty pharmacy is becoming essential infrastructure, but perceived service differentiation remains modest. Operators capable of demonstrating superior patient outcomes, therapeutic-area expertise, data integration, provider connectivity, or reimbursement capabilities may therefore have room to separate themselves from a market that payers still partially perceive as commoditized.

Control of specialty pharmacy is also becoming a control point in the value chain

The specialty pharmacy opportunity cannot be separated from PBMs.

Over time, vertical integration has combined several functions that were historically more distinct: formulary management, rebate negotiations, utilization management, and specialty drug dispensing. In the dominant model described by PSG, the PBM manages appropriate utilization while also owning the specialty pharmacy dispensing the medication.

There are obvious economic benefits to that integration. Combining purchasing leverage, formulary control, utilization management, and dispensing volume can create stronger negotiating power and greater oversight.

But payers are increasingly questioning whether all of those incentives remain aligned.

In PSG's latest survey, approximately 2 in 5 respondents operating under the vertically integrated model said it acts only slightly — or not at all — in their organization's best interest. The skepticism was greater among health plans: 48% fell into those two categories, compared with 32% of employers.

That does not imply that the integrated PBM model is disappearing. Far from it. Scale and integration remain powerful competitive advantages.

But it does suggest that the market is becoming more receptive to alternative structures.

PSG found interest in models that separate components of specialty drug management, including carving out specialty pharmacy network management, carving out specialty formulary or utilization management, or working with PBMs that do not own the specialty pharmacy.

A similar tension is emerging around rebates. Payers historically benefited from rebate guarantees negotiated through PBMs, but those economics can conflict with other objectives, particularly when plans want greater freedom to implement utilization controls or prefer lower-cost drugs.

In the 2026 PSG report, 42% of the total survey sample was either implementing or planning to implement a strategy in which the organization accepts lower rebate guarantees in exchange for greater ability to impose utilization management controls.

The broader implication is that the specialty pharmacy ecosystem is moving toward a debate over control versus integration.

Large vertically integrated platforms benefit from scale. But if payers increasingly demand transparency, flexibility, and the ability to optimize specialty spend independently of rebate guarantees, opportunities could emerge for specialized vendors that unbundle specific functions.

The next value pool is not just who dispenses the drug — but where it is administered

Some of the most expensive specialty therapies never pass through a conventional pharmacy counter.

Infused and provider-administered drugs introduce another variable into the specialty drug equation: site of care.

The same therapy can potentially be administered in a hospital outpatient department, physician office, independent infusion center, or patient's home. Those settings can carry materially different economics for payers and patients.

As a result, site-of-care management is becoming another lever for controlling specialty costs.

PSG found that 35% of plans already have site-of-care programs for specialty medications, while another 20% are considering them. Adoption is substantially higher among health plans than employers. More importantly, among organizations already using site-of-care programs, 51% are considering expanding them.

That is a meaningful signal.

Once a payer begins actively directing specialty administration, the addressable market shifts. Independent infusion centers, physician-based infusion, and home infusion can become alternatives to hospital outpatient administration when clinically appropriate.

This creates an investment opportunity around the drug without requiring exposure to the binary scientific risk of developing the drug itself.

Infusion providers can instead benefit from increasing specialty drug volumes, broader indications, and payer pressure to migrate administration toward more efficient settings.

Oncology illustrates how early this shift may still be.

Only 9% of PSG respondents currently use site-of-care strategies specifically in oncology. But among those that do not, 59% describe themselves as moderately or very willing to implement such a strategy. The leading motivation is cost savings, cited by 71%, followed closely by patient preference and quality of life at 68%, and clinical safety and appropriateness at 65%.

That combination matters. Site-of-care migration is not simply a cost-cutting exercise. Its expansion depends on whether lower-cost settings can also maintain clinical appropriateness and improve patient convenience.

For investors, this creates a potentially attractive intersection: growing specialty volumes plus payer incentives plus patient preference can support alternate-site infusion models, while the clinical complexity of the therapies provides a barrier to entry that traditional outpatient services may not have.

Cell and gene therapies push the model to its limit

If conventional specialty drugs have complicated pharmacy benefit management, cell and gene therapies take that complexity several steps further.

These therapies can carry very high upfront costs while potentially generating benefits over many years. That creates a mismatch between when a payer incurs the expense and when the healthcare system realizes the clinical and economic benefit.

Payers clearly recognize the problem.

In PSG's latest survey, 76% of respondents said affordability of cell and gene therapies would represent a moderate or major challenge over the next two to three years. Among health plans, that figure reached 85%.

Yet visibility into the actual financial exposure remains limited.

Only 22% of respondents described themselves as very confident in their organization's understanding of the financial impact of cell and gene therapies over the next two to three years. The majority were either only somewhat confident or not confident at all.

That mismatch — high expected financial impact but limited ability to predict it — creates another services opportunity.

Payers may increasingly need financial-risk products, outcomes-based arrangements, specialized utilization management, patient identification, provider coordination, and sophisticated forecasting tools to manage therapies whose economics do not fit neatly into traditional annual benefit cycles.

Some of those structures are already emerging. PSG reports that one in four health plans has entered into risk-sharing financial programs with pharmaceutical manufacturers specifically for cell and gene therapies.

The investment implication is broader than cell and gene therapy itself. As pharmaceutical innovation produces therapies with increasingly unusual payment and administration profiles, the infrastructure required to finance and manage them becomes more complex.

Complexity, in healthcare, has a habit of creating intermediaries.

Biosimilars provide the counterweight

Not every force in specialty medicine pushes costs higher.

Biosimilars are increasingly introducing competition into categories historically dominated by expensive biologics. PSG reports that U.S. biosimilar utilization increased from 27.3% in 2023 to 36.7% in 2024. Excluding the Humira market basket, penetration increased from 48.6% to 54.2%.

Payers are responding aggressively. More than two-thirds of plans now use either a lowest-net-cost strategy, mandatory biosimilars for patients starting therapy, or both across at least one benefit. Mandatory conversion of patients already receiving the reference biologic is also increasingly common.

The prior PSG survey shows the direction clearly. Between 2023 and 2024, use of lowest-net-cost biosimilar strategies increased from 54% to 58%, mandatory biosimilars for new patients rose from 38% to 41%, and mandatory conversion strategies increased from 32% to 37%. Health plans were consistently more aggressive than employers.

Biosimilars therefore create an interesting counterforce within specialty pharma. Innovation expands the number and complexity of high-cost therapies, while biosimilar competition pushes payers to become more sophisticated about formulary placement, net cost, and utilization.

Both dynamics strengthen the importance of the infrastructure layer.

The winners do not necessarily need to own the molecule. They need to help determine which molecule is used, under which benefit, through which pharmacy, at which site of care, and at what net cost.

The Bottom Line

The specialty drug market is becoming a case study in how pharmaceutical innovation reshapes the businesses surrounding the molecule.

More complex therapies mean more complex reimbursement. More expensive therapies increase the value of utilization management. More provider-administered therapies increase the importance of site-of-care decisions. More biologics create room for biosimilar competition. And cell and gene therapies introduce financial risks that conventional pharmacy benefit structures were never designed to manage.

That creates a growing ecosystem around specialty drugs.

Specialty pharmacies are becoming critical distribution and patient-management infrastructure. PBMs remain powerful because they combine formulary control, purchasing leverage, utilization management, and dispensing, but payers are showing growing interest in alternatives to fully integrated models. Infusion providers stand to benefit as payers search for lower-cost administration settings. And specialized technology, analytics, patient-support, and financial-risk platforms can become increasingly valuable as therapies become harder to manage.

For healthcare investors, the key question is therefore not simply how quickly specialty pharmaceutical spending grows.

It is where the economics of that growth ultimately accrue.

The manufacturer captures the economics of innovation. But around every increasingly expensive and complicated specialty drug sits an expanding network of companies responsible for financing it, distributing it, administering it, monitoring it, and getting it to the patient.

That second layer may prove to be one of the more durable healthcare services opportunities created by the next generation of pharmaceutical innovation.

Sources & References

Pharmaceutical Strategies Group (PSG). (2026). 2026 Trends in Specialty Drug Benefits Report: 2025 Results. https://www.psgconsults.com/research/

Pharmaceutical Strategies Group (PSG). (2025). 2025 Trends in Specialty Drug Benefits Report: 2024 Results. https://www.psgconsults.com/research/

IQVIA Institute for Human Data Science. (2026). U.S. Medicine Use Trends 2026. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/us-medicine-use-trends-2026

McKinsey & Company. (2026). US healthcare companies continue to create value through diversification. https://www.mckinsey.com/capabilities/m-and-a/our-insights/us-healthcare-companies-continue-to-create-value-through-diversification

McKinsey & Company. (2025). What to expect in US healthcare in 2025 and beyond. https://www.mckinsey.com/industries/healthcare/our-insights/what-to-expect-in-us-healthcare-in-2025-and-beyond

Federal Trade Commission (FTC). (2025). Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers. https://www.ftc.gov/reports/specialty-generic-drugs-growing-profit-center-vertically-integrated-pharmacy-benefit-managers