Specialty Pharmacy Year in Review and Beyond

Specialty Pharmacy Times’ editor-in-chief looks at the highlights of 2013 and considers the issues and trends poised to impact the future of specialty pharmacy.

As we enter our fourth year of Specialty Pharmacy Times, we continue to raise the bar as the most read and respected publication in specialty pharmacy. This past year had many significant events and trends that will influence the practice of specialty pharmacy in the years to come.

What were the highlights of 2013?

• The largest acquisitions in the history of specialty pharmacy, Express Script’s CuraScript and Medco’s Accredo, are now complete.

• Coram, a home infusion/specialty pharmacy business, announced its acquisition by CVS/Caremark.

• Walgreens announced its integration of Caremetx, an up-and-coming HUB.

• Walgreens also announced a partnership with AmerisourceBergen, the largest distributor of specialty products in the United States. Can that play out to increased access to Walgreens Specialty?

• Walgreens already owns the largest market share in retail among the non-prescription benefit management (PBM)-owned specialty pharmacies and is thought to be the market share leader in that space also.

• Walgreens also has a significant ownership in Boots, the largest drug chain in the United Kingdom—clearly a global play.

• Two players are building emerging specialty pharmacy organizations, Armada Health Care’s Specialty Pharmacy Association of America (SPAARx) and the National Association of Specialty Pharmacy (NASP), both focused on primarily the same mission, representing specialty pharmacy and pharmacists to various stakeholders.

• Accreditation clearly became the standard, with URAC leading the process. Today, a specialty pharmacy without accreditation is at a competitive disadvantage when attempting to gain access to products.

• Limited distribution became the norm with emerging products.

2014 AND BEYOND

Eventually, our administration will figure out how to manage a website and the Affordable Care Act will likely come together, but where will your specialty pharmacy come into play in that space? Are you ready to participate in the new accountability and in such networks with other providers? This could be a true “door opener” for entrepreneurial trendsetters.

The Drug Quality and Security Act of 2013 was just signed into law by President Obama. We think, while subtle, the elements of this Act will present new opportunities in specialty pharmacy as it will make possible the tracking of products from the point of manufacturer all the way down to the patient level, in addition to adding new requirements around compounding. Let’s pause and think of the opportunities for specialty pharmacy around compliance and adherence programs and the reporting capabilities back to the manufacturer.

Expect to see more hospital group purchasing organizations and integrated delivery networks to emerge with hybrid offerings, where the transition of the patient from inpatient to discharge into the community will be better directed and tracked.

Expect cost pressures associated with specialty medications to cause a drastic shift in health plan benefit design. But plan benefit can only go so far, as the predominate therapies that have fueled the PBM side of the drug benefit have led to a primarily “use generics first” strategy. There is a finite margin a PBM can derive from managing a drug benefit that pushes generics, as traditional “retail” brand products continue to have their patents expire and not be replaced by innovative primary care products. Specialty products and the unique disease states are largely buffered.

We believe that the PBM-owned specialty pharmacies will have margin pressure, which raises the question: can they, with their scale, provide the service levels of the privately held and regional or even retail-based players? We see trends indicating that those plan sponsors need to look at accountability around payer-owned specialty pharmacy services, now more than ever before.

Just spend a few minutes looking at our Specialty Pharmacy Times Drug Pipeline department and you’ll appreciate that drug development strategy is moving from a “me-too” strategy to a “me-first” approach as manufacturers turn their attention to rare diseases, orphan drugs, and medications showing a substantial benefit over existing treatments. Look at new product approval trends. It’s hard to find a true primary care blockbuster, but there are plenty of examples of specialty blockbusters. Expect that the “specialty by retail” model will continue to take shape.

And no trend can omit the continued focus on data. We believe those organizations that can control data can have more control over their future as they can demonstrate better outcomes and overall value in the stream of health care delivery. The players that can bring together data through truly integrated health care will be the winners in the end.

We are excited about the new entrants in the marketplace as competition breeds excellence. We’ll keep you abreast of the emerging trends, and invite you to stay tuned in 2014 with our expanded editions of Specialty Pharmacy Times. We’ll be coming to you through print, web, and our industry-leading iPad and mobile editions. SPT

Specialty Pharmacy Times is THE journal fully committed to setting the publication standard through peer-written and reviewed articles focused on the “real world” of specialty pharmacy practice. We welcome your feedback on this issue and on any topics you would like us to cover in future editions of Specialty Pharmacy Times. Please reach out to me at dsteiber@pharmacytimes.com. We also encourage you and your colleagues to subscribe to this unique journal and eNewsletters by logging on to www.specialtypharmacytimes.com.

About the Author

Mr. Steiber is a principal of D2 Pharma Consulting LLC (d2rx.com) and is responsible for commercial operations, trade supply chain strategy development including 3PL selection, regulatory oversight, and “operationalizing”organizations. Mr. Steiber has served in several senior positions in pharmacy, distribution, and industry over the course of his 35-year career and is a licensed pharmacist in Texas, Washington, California, and Pennsylvania. He is affiliated with several professional associations and publications and is a frequent speaker on behalf of many professional organizations. Mr. Steiber graduated from Washington State University College of Pharmacy. He has participated in a variety of postgraduate programs in law and business development/marketing at Harvard University and Northwestern University. Mr. Steiber currently resides in Highland Village, Texas.