The Most Expensive Word in Healthcare

Have you ever gone to the pharmacy to pick up a medication and been told you have to use a “Specialty Pharmacy”?

If you haven’t, consider yourself lucky. You’ve been spared being put through one of America’s greatest scams - “Specialty Drugs”.

If you’re hearing that term for the first time, you probably assume it refers to a specific type of medication.

Something rare. Something complex. Something… special.

That’s the idea, at least.

The problem is that nobody agrees on what it actually means. Which means that it doesn’t actually mean anything.

And in a system like American healthcare, when a definition is vague, it’s usually not an oversight.

It’s a meticulously crafted, financially lucrative opportunity.

Depends who you ask!

Let’s start with the things everyone can agree on.

Specialty drugs are typically:

We’re talking about drugs for cancer, autoimmune diseases, multiple sclerosis, HIV, and rare genetic disorders. The kinds of medications that can genuinely change—or save—someone’s life. These are drugs that require a bit more supply chain control than your average pills in a bottle.

And to be clear: many of these drugs are incredible. They represent the best of modern medicine. Years of research, billions of dollars, and real scientific breakthroughs.

That part of the story is true.

It’s also the only part the industry wants you to focus on.

Here’s where things start to fall apart.

There is no universal definition of a specialty drug.

Not from regulators.
Not from insurers.
Not from PBMs.

In fact, the “Big 3” PBMs only agree on the classification of a drug as specialty about half the time.

Each player defines it slightly differently. And those definitions aren’t based purely on science.

They’re based on incentives.

Which is the only reason why there needs to be a defined term in the first place!

Because once a drug is labeled “specialty,” PBMs have made it so that a whole different set of rules kicks in:

And most importantly…

Who controls it.

You’ve heard me say this before, but it’s worth repeating:

A specialty pharmacy used to mean a place equipped to handle complex drugs.

Now, more often than not, it just means a pharmacy owned by your insurer that they can force you to use.

If you’ve been reading Drugstore Cowboy for a while, this should not come as a surprise.

If you want to understand why “specialty drugs” have become such a big deal, ignore the clinical definitions and look at the numbers.

Specialty medications account for less than 2% of prescriptions in the U.S.

But they drive ~40% of total drug spending.

Read that again.

A tiny fraction of prescriptions is responsible for almost half the money.

This is where the real action is.

The three biggest specialty pharmacies in the US make tens of billions in revenue per year. 

For reference, Coca Cola made $47.7B in revenue in 2025. CVS Specialty did $86.1B! 

If you isolated CVS Specialty from the entire CVS vertically integrated network, it would still be a Top 50 company by revenue. That is a special level of money.

Some of this is justified.

These drugs are hard to make.

Biologics aren’t simple chemical compounds. They’re large, fragile molecules. They require specialized manufacturing, strict handling, and complex distribution.

They also target diseases that, in many cases, had no meaningful treatments a decade ago.

That shouldn’t be overlooked.

But let’s not pretend that’s the whole story.

Because pricing in American healthcare is never just about cost.

It’s about leverage.

You already know how the PBM game works.

Manufacturers set high list prices.
PBMs demand rebates to secure formulary placement.
Everyone skims a piece.
Patients get stuck footing the bill.

Now take that system and apply it to drugs that cost $5,000… $10,000… sometimes $50,000+ per year.

The math gets absurd very quickly.

The higher the price, the larger the potential rebate.

And the larger the rebate, the more valuable that drug becomes to the middlemen controlling access.

As I’ve said before:

PBMs don’t make drugs.
They don’t dispense them.
But they control who gets what and how much they pay.

Specialty drugs are where that control is most lucrative.

Once a drug is labeled “specialty,” it doesn’t just get expensive.

It gets locked down.

Patients are often told: “You have to fill this through a specialty pharmacy.”

If you don’t think too hard about it, that might sound reasonable.

But here’s what’s actually happening behind the scenes:

Same company. Start to finish.

The only thing “Special” about that pharmacy is that it’s owned by the PBM.

If that setup feels familiar, it should.

It’s the same vertical integration play you’ve seen everywhere else in healthcare:

Control the rules.
Control the flow.
Control the money.

When one company owns the insurer, the PBM, and the pharmacy, they’re not coordinating care.

They’re routing revenue.

The only difference with specialty drugs is that the numbers are much bigger.

From the patient’s perspective, “specialty drug” doesn’t feel like a clinical category.

It feels like a maze.

You get a prescription from your doctor.

You walk into your local pharmacy.

They tell you it has to be filled through a specialty pharmacy.

So now you’re:

Those delays aren’t just annoying.

They’re dangerous.

You’ve already seen how fragile access can be when PBMs start making decisions about coverage, approvals, and alternatives.

Now we’re talking about drugs with even more fragile patients.

Specialty drugs just raise the stakes.

Here’s one more question:

Why does the definition of “specialty” keep expanding?

Why do more and more drugs end up in this category every year?

It’s not because the science suddenly got more complicated.

It’s because the economics got more attractive.

If you control a high-cost drug through a closed distribution system, you create:

From a business perspective, it’s perfect.

Specialty drugs take everything I’ve written about for the past few months to the extreme.

So let’s be honest about what a specialty drug actually is.

It’s not just:

It’s also:

In other words:

A specialty drug is any drug the system has decided is too valuable to treat like a normal one.

There’s nothing inherently wrong with expensive, complex medications.

Some of the most important drugs in the world fall into that category.

But the way we’ve built the system around them?

That’s where things get messy.

Because once a label like “specialty” becomes flexible, it stops being clinical.

It becomes financial.

And that’s where the public loses control.

So the next time you hear the term “specialty drug,” ask yourself:

What does that really mean? And who benefits?

In American healthcare, “specialty” doesn’t tell you what the drug does.

It tells you who controls it.

Alec Wade Ginsberg, PharmD, RPh
4th-Gen Pharmacist | Owner & COO, C.O. Bigelow
Founder, Drugstore Cowboy