It’s hard not to notice that specialty drugs are becoming pharmacy’s biggest players. New drugs with price tags upwards of 2 million dollars are hard to ignore. Even while society wrestles with these drugs’ unprecedented health and financial implications, community pharmacists have been exploring what their role in specialty dispensing might be.
As big as the impact is, there’s actually no firm definition of a specialty medication. You might first become aware that a drug falls into the specialty category when someone comes into your pharmacy with a prescription you can’t fill. Definitions include whether it requires special handling, treats rare disease, requires ongoing assessment of response, requires patient-administration training, requires monitoring of side effects, or if it has an FDA-mandated REMS (Risk Evaluation and Mitigation Strategy). But really, the biggest indicator is cost – specialty drugs are almost always expensive.
Even with no universal agreement on definition, there’s little question about specialty’s enormous revenue growth. Here are some facts from a presentation at an Asembia Specialty Pharmacy Summit in Las Vegas:
- Specialty remains the fastest-growing area of drug spend.
- Specialty growth is outpacing traditional growth, with a 46% share of total non-discounted spend in a recent 12-month period.
- Specialty spend is growing at 11.7% while traditional is relatively flat at 1.8%.
- Oncology, autoimmune, and HIV lead specialty absolute value growth.
- A record number of innovative medicines were launched in 2018, bringing 59 new treatment options to patients.
- 9 of the top 10 recent drug launches were specialty; 2 of the top 10 launched in 2018.
- Payors are looking for ways to address rising specialty costs.
- Companies with a proven track record for managing specialty are likely to benefit.
First, the special difficulties
While the revenue strength of specialty medications is undeniable, thought leaders note that the industry is starting to see narrowing and consolidation, along with the entry of PBMs and IDNs (integrated delivery networks). The process of becoming accredited to dispense specialty medications is not for the faint of heart, and the fact that drug manufacturers are increasingly launching specialty products in narrow networks presents challenges to community pharmacies hoping to penetrate the space.
The presentation mentioned above noted the emerging market pressures:
- Tighter, more consolidated payer management
- Higher patient out-of-pocket payments
- Amplified public pressure and demand for price transparency
- More stringent medical benefit management
- Increase in value-based models
- Evolving provider landscape
Now, the special
opportunities – and decisions
Whatever the difficulties, the fact remains that independent pharmacies are doing specialty. It’s been quite a while since anyone described the marketplace for community pharmacy as easy, but these overall trends and statistics don’t dictate individual pharmacies’ experiences or stop their successes. Specialty dispensing is not going away, and revenue from traditional dispensing will likely continue to fall.
Your decision whether and how to enter the space should be informed by where you’re located, what business model you’re comfortable with, and who can refer patients to you. Even smaller independents can compete in places with an untapped or niche need for access to specialty medication monitoring, including county services. Regional pharmacies can focus on government plans with willing provider provisions. Independent pharmacists’ proven ability to improve patient outcomes is a singular strength that specialty drug manufacturers and payors crave.
Entering the market as an independent does not mean forging ahead by yourself. Get educated, connect with people already doing specialty, and seek partnerships with vendors that can guide you through accreditation, referrals, clinical consultations, refill reminders, prior authorizations, rebates, etc. Ideally, any specialty service provider you select will integrate easily with your existing pharmacy management system.
If the can’t-look-away numbers of specialty drug revenue have you considering your pharmacy’s role, the main takeaways are these:
- You absolutely don’t have to go it alone.
- The time to start is probably now.