The Evolving Specialty Market

Health care reform will undoubtedly change the way specialty drugs are managed within the distribution supply chain, and specialty pharmacy providers may soon be competing with hospitals for patient share.

“We are already in deficit mode when it comes to Affordable Care Act implementation,” remarked Michael J. Baldzicki, CRCM, executive vice president of industry relations & advocacy for Armada Health Care, at CBI’s 4th Annual Forum on Strategic Distribution Planning for Specialty Products. “As a result of this deficit, manufacturers are going to have to supply more drugs to cover that gap,” he said.

Health care reform is going to drive further change to specialty pharmacy distribution channels, according to Baldzicki. Drug manufacturers will increasingly choose limited distribution models to properly manage their drugs, and payers will accept limited or exclusive distribution arrangements. To provide the right level of care, service providers will have to work with the case management or clinical staff, and the manufacturer may have to consider risk sharing contracting models with the payer in order to guarantee results that are in alignment with clinical trials.

Baldzicki noted that health systems are moving into the specialty pharmacy space and taking share from specialty pharmacy providers. As a result of 340B pricing, “hospitals and specialty pharmacy providers (SPPs) will be battling over patients,” he asserted. In addition, large SPPs are currently being challenged to prove their value to patients and payers, and may start new health management programs to promote adherence to specialty drugs. SPPs may even start to segment patients into categories depending on whether they require a high-touch model, he explained.

In the future, Baldzicki said, he expects payers and employers to reclassify specialty products that are under the pharmacy or medical benefit in order to better control costs, and payer precertification, predetermination, and revaluation policy programs may potentially be used to lock out nonpreferred drugs via online claims adjudication and step edits. Complex Risk Evaluation and Mitigation Strategies (REMS) requirements for manufacturers will also limit specialty pharmacy access to certain drugs in the pipeline, Baldzicki noted.