A Look Back and at What Lies Ahead for Specialty Pharmacy in 2019

There is no doubt that 2018 was a year of transformation across the health care spectrum, and specialty pharmacy was no exception. A handful of trends dominated headlines, including pricing, consolidation, and innovation, and called for change across the specialty pharmacy sector. Fortunately, these challenges also helped lay the foundation for improvement and meaningful change in 2019.

Before we look to the future, let’s examine the progress made in 2018.

1. Pricing

Drug pricing was perhaps the most nationally recognized and highly debated topic surrounding specialty pharmacy last year. Of course, specialty medications can alter or eradicate diseases that were previously untreatable, but that ground-breaking innovation does come with a high price tag. The annual cost of specialty therapies for orphan diseases can exceed $500,000 per year. Even though the price is high, industry spending has not slowed.

A recent study by IQVIA titled Medicine Use and Spending in the U.S. found that in 2017, spending on all types of medications increased by 0.6%. However, the report also notes that specialty medications are rapidly approaching half of overall medicine spending. Although net spending on retail and mail-order pharmacy distribution dropped 2.1% in 2017, the overall net spending increase of 0.6% is due in large part to the rising cost of specialty medications.

2. Consolidation

Mergers and acquisitions that began in 2017 continued last year as more organizations looked to deliver coordinated care across the entire patient life cycle. Consolidation is also perpetuating the idea of flight-to-quality among investors within the specialty pharmacy space. As more organizations—particularly, the major retail stores—merge, investors are increasingly interested in combined organizations that may provide stability in a future in which health care dollars are tied to value-based care models and patient outcomes.

3. Technology adoption

The benefits of adopting digital technologies have been a major focus over the past year. Innovation and increasing use of new, data-driven technologies have been happening in retail pharmacy and other areas of health care, but adoption has been slower in the specialty market. During a speech at the Office of the National Coordinator for Health Information Technology’s Interoperability Forum in August, CMS Administrator Seema Verma set a goal for digital health information to replace fax machines in physicians’ offices. For an area such as specialty pharmacy, in which the fax machine has been the crux of communication for decades, this is a huge milestone.

What's next

Meaningful progress was made in 2018, but there is still much work to be done. As we look to build on some of the momentum of the past year, here are our top 5 predictions for specialty pharmacy in 2019.

1. Continued increase of accreditation

Within specialty pharmacy, accreditation has become an absolute necessity. Accreditation can help pharma companies and payers ensure tight alignment with partner organizations. Specialty pharmacies can pursue many accreditations, including URAC, which is considered by many to be the gold standard. Other organizations include the Accreditation Commission for Health Care, The Joint Commission, Center for Pharmacy Practice Accreditation, and Community Health Accreditation Program.

It is important that pharmacies understand which accreditation is best for them and ensure they are audited and accounted for annually. Doing so will show payers and pharmaceutical manufacturers that the pharmacy is dedicated to improving quality, controlling costs, and documenting positive patient outcomes. Although we suspect accreditation will be a priority in 2019, not all organizations that apply will make the cut, so it will be interesting to see if and how accreditation rates change in 2019.

2. Smartphone app and technology adoption

With the shift toward value-based care, patient engagement has moved to the forefront. The use of smart-phone-based technology for improved health has seen a major push over the past few months. During fall 2018, the Apple Watch Series 4 technology was announced, which allows customers to take an electrocardiography reading using its new app.

As an industry notoriously slow to adopt technology, we need to understand that today’s patients increasingly want to communicate via text or app. A patient is much more likely to engage in their care if communication is streamlined and easy. When it comes to specialty pharmacy, SMS-based notifications can alert patients when their prescription is received, show prior authorization (PA) status, and notify patients when the medication is out for delivery.

Additionally, specialty pharmacies, payers, and even biopharma companies have launched portals for providers and patients, generally resulting in low adoption rates. Technology solutions that help consolidate these technologies and services will see an increase in participation from these stakeholders and adoption by providers and their patients.

3. Focus on ePA

The pains of PA are well known throughout health care but are particularly challenging for specialty pharmacy. That said, the rise of electronic PA (ePA) solutions is both streamlining the administrative burden for providers, pharmacists, and payers and speeding up the time it takes for the patient to receive medications. Having a single platform to prescribe and deliver a medication can reduce administrative tasks and streamline the process to get lifesaving therapies to patients. The pieces are all falling into place for greater adoption and implementation of these kinds of electronic prescribing and ePA technologies in 2019.

4. Real-time data for improved patient care

Many medication management programs can assist with data collection. For example, a patient is prescribed a therapy, and goals are set that are associated with improved health, such as going to the grocery store without assistance. By using technology solutions that capture real-time data, the specialty pharmacy can monitor and record progress against those goals monthly, touch base with the patient via phone or text, and intervene if necessary. If, for instance, the patient was not able to go to the supermarket unassisted, the pharmacist could share the data with the patient’s provider and alter the treatment course to help get the patient to the store and improve overarching outcomes. As we move through 2019, real-time, actionable data will play a more integral role in the outcomes of patients through risk identification, personalized treatment decisions, and increased engagement. Hopefully, in time, this will also lead to decreased costs.

5. Real-time data for improved provider and payer performance

Not only will actionable data benefit the patient, it will also prove valuable for pro- viders and payers. Innovative platforms in the hands of forward-thinking pharmacies will allow patient outcomes to be matched with provider performance. Those insights can then be transformed into informative data sets for the payer. In 2019, the payer will continue to play an integral role in patient outcomes. Payers will need to compare the safety and efficacy of the products they bring to the market to determine how to meet patients’ needs and also reduce costs. The data being aggregated empower payers to more efficiently track and report pharmacy data as they navigate outcome-based reimbursement models. In addition, the data these new technologies provide will lower costs through improved understanding that can inform quality and efficiency measures.

Still Lots of Room for Growth

As we reflect on 2018, we see that we have come a long way and set the stage for continued progress and transformation in 2019. Specialty pharmacies that can work collaboratively with payers, providers, and pharma will continue to provide increasingly high-quality service to patients. Plus, by adopting better technology solutions, we will be able to boost patient engagement and produce increasingly rich and mineable data sets. These data will help us uncover new strategies to reduce costs and improve outcomes. Although many pieces of the puzzle still must be put into place, 1 thing is for certain: Cooperation backed by cutting-edge technologies is the recipe for success if we hope to maintain and foster the positive momentum built in 2018.