Healthcare Economics Engine

Specialty Pharmacy Economics

Model the total cost of specialty drugs—acquisition + administration + monitoring + waste—and optimize channel, formulary, and site-of-care decisions for 30-50% of Rx spend

The Specialty Drug Black Box

Specialty drugs are 2% of prescriptions but 50% of Rx spend. Your PBM says Humira costs $6,800/month. But is that acquisition cost? Does it include rebates? Administration fees? Waste? You pay the invoice and hope you're not getting fleeced. You are.

Specialty % of Rx Spend

45-55%

and growing 12%/year

Hidden Markup

15-40%

above acquisition cost

Avg Specialty Cost

$84K/yr

per patient

✗ What Fails Without This Engine

•Can't compare buy-and-bill vs. specialty pharmacy pricing—no total cost view
•Copay assistance programs hide true member cost burden
•Rebates opaque: you don't know if you're getting your contractual share
•Biosimilars available but utilization stays low—no formulary enforcement

End-to-End Specialty Economics

Our Specialty Pharmacy Economics Engine decomposes total specialty cost into acquisition, rebates, dispensing fees, administration, monitoring, and waste. It benchmarks your costs against transparent pricing databases and simulates formulary changes to quantify savings.

Specialty Economics Model
// Total cost of specialty drug
total_cost = acquisition_cost +
             dispensing_fee +
             administration_cost +
             monitoring_cost +
             waste_cost -
             rebates -
             copay_assistance

// Example: Humira (adalimumab)
humira = {
  AWP: $7,037/month,
  PBM_invoice: $6,845/month,
  actual_acquisition: $5,950 (from 340B or MAC),
  rebate: -$1,200 (but delayed 90 days),
  dispensing_fee: +$125,
  administration: $0 (self-injectable),
  monitoring: +$85/month (labs),
  waste: +$240/year (avg 3.5% vial waste)
}

true_net_cost = $5,950 + $125 + $85 + $20 - $1,200
              = $4,980/month

// Channel comparison
buy_and_bill = physician_acquisition + admin_fee
specialty_pharmacy = PBM_price + dispensing
white_bagging = direct_ship + handling

SELECT MIN(buy_and_bill, specialty_pharmacy, white_bagging)

// Biosimilar switch simulation
IF biosimilar_available AND clinically_appropriate:
  savings = (brand_cost - biosimilar_cost) × eligible_patients
  implementation_cost = prior_auth + education
  net_savings = savings - implementation_cost

Engineering Architecture

Core Components

Cost Decomposition: Break specialty invoice into component costs
Rebate Intelligence: Track contractual rebates vs. actual receipts
Channel Optimizer: Compare medical vs. pharmacy benefit costs
Formulary Simulator: Model biosimilar adoption and step therapy

Economic Metrics

Specialty PMPM

$120-$180

commercial population

Channel Savings

12-25%

optimized site-of-care

Biosimilar Discount

30-60%

vs. brand biologics

Rebate Recovery

$50K-$250K

audit recoveries

Real-World Applications

Humira to Biosimilar Switch

•Identified 18 Humira patients eligible for biosimilar
•Brand cost: $6,845/month × 18 = $123K/month
•Biosimilar cost: $3,200/month × 18 = $58K/month
•Annual savings: ($123K - $58K) × 12 = $780K
•80% patient conversion achieved, actual savings: $624K/year

White Bagging Oncology

•Oncology infusions: $380K/year via buy-and-bill
•Modeled white bagging: direct specialty pharmacy to infusion center
•Eliminated hospital markup (avg 40%)
•New annual cost: $270K (29% reduction)
•Implemented for 12 patients, validated $110K savings

Master Specialty Pharmacy Economics

See your total specialty drug cost decomposed. Identify channel optimization opportunities. Simulate biosimilar adoption and quantify savings before formulary changes.

Request Engine Demo→