Where Does Independent Specialty Pharmacy Fit in the Era of Consolidation?

During a time of significant change in health care, we are seeing a growing number of mergers, acquisitions, and partnerships that affect the specialty pharmacy space. These deals include CVS Health’s purchase of Omnicare, in addition to its acquisition of and integration into Target Pharmacy; Diplomat’s acquisition of the third-largest independent specialty pharmacy, TNH Advanced Specialty Pharmacy; and Walgreens’ purchase of nearly 2000 Rite Aid locations.

Driving these deals is an effort to restrain costs as the American health care system transitions away from the current fee-for-service model and toward a value-based system.

The benefits of consolidation—a streamlined, integrated patient care delivery path and greater economies of scale and financial strength—directly address some of the challenges providers may face in a value-based payment system based on patient outcomes. Unconnected providers in the health care continuum will struggle to achieve the same outcomes as patients treated as part of a coordinated care network. However, concerns persist about whether consolidation will decrease competition and, as a result, fail to improve patient outcomes or significantly reduce costs.

Within this evolving new world of health care are the questions surrounding the future of smaller independent pharmacies. Consolidated care entities may leave independents out in the cold from payer or distribution networks and affect the ability to purchase drugs at a fair price, diminishing smaller pharmacies’ ability to compete. On page 32, Paula Bickley, vice president of market access, Biologics by McKesson, explores how independent specialty pharmacies can stay competitive and remain relevant as the US health care system evolves. As Bickley notes, independent specialty pharmacies must structure patient care in a way that quantifies their value in avoidable medical spend and optimized outcomes. Specialty pharmacies that develop their competencies and determine their value proposition may gain the favor of pharmacy benefit managers by demonstrating optimal patient outcomes and providing cost savings.

The implications of consolidation and the future of independent specialty pharmacies will remain at the forefront as we consider new models of care. Trends such as these will continue to dominate the conversation surrounding specialty drugs and the cost of care in the United States, which makes staying on top of the latest developments vital to thriving in this changing market. To keep up with these trends, be sure to attend the upcoming National Association of Specialty Pharmacy 2019 Annual Meeting & Expo, taking place September 9 to 12, 2019, in Washington, DC.