Commentary: Where Old Meets New?Specialty Pharmaceuticals and Community Pharmacy

Mr. Hoey is thesenior vice presidentand chief operatingofficer of the NationalCommunity PharmacistsAssociation.

It makes for an interesting juxtaposition—the neighborhood pharmacy,the centerpiece of Main Streetworking closely with cutting edge,almost futuristic health care technologycustomized for the specific needsof a patient's condition and lifestyle.This is one way to describe the interrelationshipbetween community pharmacyand specialty products, and it isthe future. Community pharmacists arewell positioned if they choose to takeadvantage.

There are varying definitions of whatdenotes a specialty drug, but mostagree that they are expensive, requirespecialstorage, dosing, or administration,and often have complex sideeffect profiles.

Market Growth

The use of specialty pharmaceuticalsis increasing rapidly. A couple of factorsare contributing to the growth.Research is revealing more about rarediseases, and as a result, more specialtypharmaceuticals for specific conditionsare being developed. Another factoris that breakthroughs with oral, solid,receptor modifying drugs seemed tohave reached their peak in the 1990s,and many of these products are, or willbecome, available generically within thenext few years. Generic dispensing ratesare higher than they have ever beenand are expected to climb even higher,leading many manufacturers to adoptnew business strategies emphasizingspecialty pharmaceuticals.

The expansion of specialty pharmaceuticalshas not only resulted in higherprescription volume, but also higherrevenue. In 2004, specialty pharmaceuticalsaccounted for 23% of all pharmaceuticalexpenditures. By the end of2008, specialty drugs were expected toaccount for 35% of all pharmaceuticalexpenditures. Obviously, the growth inspecialty pharmaceuticals is far outpacingthe rest of the marketplace.

A Reputation for Patient Service

The unique requirements and the cuttingedgegrowth of specialty pharmaceuticalscreate a perfect storm of opportunityfor community pharmacists. Thecalling card for community pharmacistsis providing services for the patientsin their community. Numerous surveys,including Consumer Reports andthe WilsonRx Pharmacy SatisfactionSurvey, have shown that communitypharmacists are top-ranked in providingpatient service-the kind of service thattranslates well into providing care forpatients taking specialty medications.

The strong revenue growth in specialtypharmaceuticals also has beennoticed by others, such as pharmacybenefit managers (PBMs), publicly tradedchain drugstores, and payers. Thegiant PBMs have acquired market shareby purchasing specialty pharmaciesthat allow them to self-refer specialtypatients to their mail order factorieswhere they can leverage manufacturersfor higher rebates and restrict networksthat funnel specialty patients to theiroperation. Some chain drugstores havefollowed suit and also are acquiring specialtypharmacies. Additionally, someresearch manufacturers—especiallythose with medications treating orphanor ultra-orphan conditions—restrictwhich pharmacies are allowed to dispensetheir product.

Despite these obstacles, communitypharmacists are uniquely positioned togrow their specialty business. From aproductivity and expense point of view,employers are motivated to make suretheir employees are receiving maximumbenefit from their specialty therapy.Community pharmacists are well positionedto address this need by providingthe customized care that this patientpopulation requires. Additionally, carefor these patients often requires nimblenessin the counseling, billing, storage,and delivery of the medication that iswell suited for entrepreneurial communitypharmacists.

Growth in the specialty marketplacewill require some adjustments and plentyof flexibility with the business modelfor many community pharmacists, butthe opportunity is there to combineadvances in technology and new drugdiscoveries with the familiar hometowntouch upon which community pharmacistshave built their success.