Reason and Impact of Patient Switching Within the Specialty Pharmacy Market

Within the specialty pharmacy industry, little research has been published on the subject of patient switching between specialty pharmacies.

However, it is openly acknowledged that this does occur and can be very problematic and inconvenient for patients. Why this phenomenon occurs is dependent on multiple factors, but just to name a few simple reasons: the patient’s health plan changes, the specialty pharmacy does not have access to the product (it is not part of the limited-distribution network established by the pharmaceutical manufacturer), the physician’s office requests a change, or just plain poor customer service on the part of the specialty pharmacy.

At Zitter Health Insights (ZHI), we delve deep into this issue on a regular basis in our Specialty Pharmacy Patient Satisfaction Survey. It has been shocking to learn how prevalent switching among specialty pharmacies is and, most importantly, the reasons why. From research we collected from February 2015 through July 2016, ZHI discovered that more than one-third of specialty pharmacy patients indicated they had used more than 1 specialty pharmacy during that time period.

Out of that same cohort, nearly 50% of patients indicated they had switched specialty pharmacies within the last 6 months. This phenomenon occurred most frequently within hepatitis C, multiple sclerosis, psoriasis, and pulmonary arterial hypertension specialty disease states, as well as among independent specialty pharmacies (defined as not being owned by a pharmacy benefit manager or payer, or owned/operated by a retail chain).

It is well known that many independent specialty pharmacies have purposely built strong relationships with physician offices and generally receive patient referrals directly from those relationships. To combat this business model, pharmacy benefit managers and payer-owned specialty pharmacies have established a “preferred network” of pharmacies equipped to handle their patients.

In some instances, these business models result in conflicting specialty pharmacy referrals, so if a patient wants to be covered by that plan, he/she is forced to begin utilizing the payer’s specialty pharmacy or face high costs for their specialty medication. In addition, and probably not as surprising, when we asked patients about the impact of being forced to switch their specialty pharmacy, approximately 75% claimed they would be very dissatisfied if they were forced to do so, 6% indicated that they would be happy with the change, and the remaining 20% indicated they felt neutral.

Consequently, for employers considering switching plans at the end of a calendar year, if not done with care, this could be a problematic endeavor for human resources departments having to deal with the postplan change backlash of patients switching specialty pharmacies. To tie everything together, we can see from the research that specialty pharmacy switching occurs frequently enough to be a concern and that it is generally undesirable for patients; however, we have not fully discussed the underlying reasons why patients change.

Up until conducting this research, ZHI, like most industry insiders, assumed it was simply a result of health plan requirements: patients are beholden to the plan they have and are generally forced to use the preferred network of 2 or more specialty pharmacies. This is supported by the approximately 4000 patients who reported switching during that same time period, of which more than 50% were health plan-influenced switches.

Many industry experts and clients would see this and frown at the degree to which health plans are influencing patient choice and driving specialty pharmacy switching—but they would not be surprised. At ZHI, we tend to look at this slightly differently because we have analyzed the rationale for the other 50% of patients who switched. Referring to Figure 1, what jumps out is that more than 30% of patients surveyed indicated they switched for 1 of 3 reasons: poor customer service, their physician’s office suggested they change, or the specialty pharmacy could not help with cost.

These 3 factors are not widely recognized, yet they are well within the control and influence of each and every specialty pharmacy and, as a result, offer an immense opportunity for specialty pharmacies to retain that 10% of patients who would have switched. If these statistics hold true across the industry—and ZHI has a strong case to argue that they do—then it can be assumed that many specialty pharmacy leaders across the United States would love the chance to maintain at least 10% of their business that is currently walking out the door due to self-inflicted wounds.

This revenue loss could easily be prevented by increasing specialty pharmacy loyalty through better customer service, enhanced relationships with physician networks, and comprehensive searches for financial assistance for patients. In closing, after realizing that the influence health plans have on specialty pharmacy choice among patients is, perhaps, not as all-powerful as once assumed, ZHI feels there is real opportunity to improve the outlook for specialty pharmacies that suffer from excessive switching.

For many specialty pharmacies, it is an important first step to recognize the factors associated with switching and to then start developing measures to address whichever factors are within their span of control. Ultimately, specialty pharmacies will be able to measure the positive effect these improvements will have on their bottom line.

About the Author

Jason Rucker is a product director at Zitter Health Insights and has been conducting research within the specialty pharmacy industry over the last 3 years. He has more than 8 years of experience within the pharmaceutical industry.