OBJECTIVES: Specialty pharmaceuticals account for a significant and growing proportion of health plans' pharmacy budget. This research examined how insurance type, defined as traditional (TRAD), managed care (MC) or preferred provider organization (PPO), affects a plan's annual per enrollee and per patient expenditures on specialty pharmaceuticals. METHODS: Three years (2002-2004) of outpatient specialty pharmaceuticals claims data, extracted based on a predefined list of HCPCS, CPT and NDC codes, from 15 BlueCross and BlueShield plans were used to construct fixed effect panel data models. Because of potential adverse selection and dual insurance coverage in the 65+ age group, this study focused on the under 65 age group. Covariates included in the models were plan, year, insurance type and drug categories. Model parameters were estimated using generalized estimating equations (GEE). RESULTS: Plan and drug categories were significant covariates in models estimating per enrollee as well as per patient expenditures. Adjusted per enrollee expenditure increased 39.6% from 2002 to 2003 and 27.8% from 2003 to 2004. Per enrollee expenditure was 20.3% (p=0.0215, 95% CI: 3.3 - 34.3%) lower in MC and 39.5% (p<0.001, 95% CI: 27.7 - 49.3%) lower in PPO than TRAD plans. PPO plans had 24.1 % (p=0.015, 95% CI: 10.0 – 35.9%) lower per enrollee expenditure than MC plans. Adjusted per patient expenditure increased 15.3% from 2002 to 2003 and 10.8% from 2003 to 2004. Insurance type was not significantly associated with per patient expenditure. CONCLUSIONS: A plan's per enrollee expenditure on outpatient specialty pharmaceuticals differed across insurance type. TRAD had the highest per enrollee expenditure, followed by MC and then PPO plans. However, insurance type did not significantly affect a health plan's per patient expenditure on outpatient specialty pharmaceuticals.