Independent Specialty Pharmacy: Staying Relevant in the Face of Unprecedented Challenges

Truism—a statement that is obviously true and says nothing new or interesting.

Those of us working in specialty pharmacy no doubt now accept the proposition that independent specialty pharmacies are facing unprecedented obstacles as an overused truism. But truism or not, the facts remain that access to therapies has become increasingly selective, pharmacy benefit managers (PBMs) continue to equate value with deep discounts, and the rapid rise of office-based dispensing is creating potential competitors out of our most loyal prescriber base.

How does an independent specialty pharmacy stay relevant and drive new opportunities in the face of these challenges? I contend that independent specialty pharmacies—those that can draw on grit, clinical expertise, and strategic vision—already have the core competencies needed to prove their unique value in this rapidly evolving health care market. Here’s how they can maximize the return on those competencies.

Independent specialty pharmacy must see health care cost through a different lens. We are witnessing the beginning of the end of the PBM carve-out model as the only means to manage pharmacy spend. The latest round of integrations between payers and PBMs signals a clear move to a carve-in model, in which payers will have the technology, resources, and data visibility needed to dissolve the mutually exclusive legacy silos that separate medical and pharmacy benefits and spending. This means PBMs will be even more interested in cutting costs to protect their bottom line.

But cost isn’t as straightforward as many think it is. When we focus too heavily on drug pricing as a unit of cost, we miss the hidden and very real costs of nonadherence and high incidences of avoidable adverse effects. Therefore, as PBMs work to keep costs down, they can inadvertently keep patients from getting the depth of care they need, which actually reduces cost.

Many of the high medical costs associated with poor adherence and reduced productivity are in fact avoidable. A recent study revealed that, astonishingly, $100 billion in potentially avoidable costs are driven by medication-related hospital admissions.1 In other words, between one-third and two-thirds of all hospital admissions happen because of patient nonadherence or adverse events. The same study estimated that the annual cost of medication nonadherence is likely $290 billion, more than 8% of yearly US health care spend.¹

Tragically understudied until recently is the hidden costs associated with reduced employee productivity. An October 2018 study calculated that year 1 productivity losses associated with a complex diagnosis, such as that of multiple myeloma, averaged nearly $16,000 per employee.²

More than half of US employers fund all or some of their health plan’s medical spend. Imagine the benefit to employers that partner with health care providers that are uniquely able to help patients access, afford, and manage complex treatment. These providers would add value, drive lower overall medical costs, and improve patient outcomes by keeping patients on clinically beneficial treatment, out of the hospital, and productive, with a better quality of life.

When specialty pharmacies understand that costs encompass much more than drug prices, they can begin to take steps to assess the savings they help create through the adherence support they provide. They can then begin to ensure they can quantify that value for PBMs as well.

Quantifying value

Independent specialty pharmacies must structure patient care to quantify their value in avoidable medical spend and optimized outcomes. To help PBMs understand the real cost of patient care, specialty pharmacies need to show how their patient management care programs save in total episodic spend. As an example, Biologics by McKesson recently secured approval from a PBM in the face of difficult administrative barriers to dispense a costly 5-fluorouracil toxicity antidote to a patient admitted to the intensive care unit of a rural Texas hospital. The medicine was couriered to the patient, who received the dose the following day and was discharged later that afternoon. Under the carve-out PBM model, the only cost evident to the PBM was the expensive antidote.

What was not clear was that the rural hospital was scheduled to transfer the patient to a large academic cancer center had Biologics not secured approval to deliver the therapy. In doing what it was uniquely trained to do, Biologics obviated an entire treatment episode.

To drive awareness and visibility into how they are bending the cost curve, specialty pharmacies must adopt an intervention outcomes—driven patient management strategy. They must know why they touch patients, what sentinel data they need to capture, and how to quantify the impact of their patient management on episodic cost.

Independent specialty pharmacy must articulate its unique value and position itself as a center of excellence. As long as we allow the health care industry to view specialty pharmacy as nothing more than a specialized distribution channel, access and margin pressures will increase. If specialty pharmacies understand and articulate effectively how the cost-effective care they provide improves how patients use the health care system and drives better treatment outcomes, they will be well on their way to becoming a center of excellence.

What, then, is a specialty pharmacy’s unique value beyond that? Pharmacies need to ask the right questions to help them develop their competencies, determine their value proposition, and ultimately gain the support of PBMs for the sake of patient care and cost savings.

Provider loyalty

• How loyal is our prescriber base?
• Would prescribers refer every patient to our pharmacy?
• How do I communicate with prescribers during the treatment episode, and do they see us as an extension of their clinical practice?

Patient support

• Are we exhausting all efforts to help patients access, afford, and manage their treatment?
• How well do we know a patient’s ability to comply with treatment?
• Do we customize patient care plans according to the patient’s risk for noncompliance?

Clinical expertise

• How does our unique clinical expertise differentiate our pharmacy?
• Are we focused on a single therapeutic area, and are we especially skilled at supporting a vulnerable patient population?
• Do we have unique value in an individual treatment class or offer a unique distribution model?

When specialty pharmacies do their due diligence to understand where they are and where they need to be, they can increase their relevancy in the marketplace. Biologics took itself through this process and made an impact on its patient care and ability to help quantify its value to PBMs.

For example, in reviewing recent patient outcomes data for a particular therapy, we identified a significant number of patients who expressed moderate to severe distress. We were able to provide those patients with more than twice the frequency of clinical outreach than that of other patients. Therefore, even though patients reported a high rate of adverse effects, the entire group remained adherent at the prescribed dose, and only 1 patient reported an emergency department admission.

Specialty pharmacy is already providing significant value. The time has come to quantify it and use that knowledge as a strategic asset.