Pharmacies with a vision of the future can participate in this thriving market. Small chains and even retailers are establishing a foothold in specialty pharmacy, and they are thriving, while traditional retailers are finding ways to participate actively.
In the mid-1990s, specialty pharmacy was an emerging industry when many of today’s largest specialty pharmacies were barely a blip on the radar. Today, these now multi-billion dollar pharmacies are mature organizations that have totally changed the channel for the distribution of highcost and hard-to-manage drugs that offer life-changing prospects for millions of patients with chronic illness.
In the 1990s, virtually all injectable medications on the market were either available at the physician’s office or through retail pharmacies. By the mid- 2000s, the percentage of injectables sold through retail had dropped to less than 35%, according to IMS. That shift took place for a number of reasons. First, it was impractical for many retailers to stock these expensive medications and, more importantly, the level of care required for each patient was at odds with the high fill rates required at most retail locations.
Something curious began to happen within the past few years. The specialty fill rate at retail has leveled off and is actually starting to climb. A large part of that trend reversal is due to big national chains better integrating their central fill models with their retail locations to offer a more seamless customer solution.
Smaller chains, however, were not sitting idly watching their specialty patients being skimmed off. They were watching and learning what it would take to stem the tide. Today, as the number of oral specialty products increases, small chains, and even retailers, are not only establishing a foothold in specialty pharmacy, they are thriving.
MOUNTAINS TO CLIMB
The just-released PBMI 2012 Specialty Drug Benefit Report
clearly states what payers are looking for in specialty pharmacy. Their top 3 requirements are (1) to improve adherence and persistency; (2) to reduce inappropriate utilization; and (3) to reduce cost. For their part, payers have tried to ensure reaching these goals primarily through restrictive benefit designs, cost shifting, and prior authorizations. Each of these is a steep impediment to patient care access, and in many ways is at odds with their stated goals.
Specialty pharmacy vendors have been scaling these administrative peaks for years and have developed an expertise that distinguishes them from the typical retail pharmacy. Armies of reimbursement staff shoulder the arduous task of clearing the prior-authorization pathway while also resolving the financial burdens that patients must shoulder. The time period between when a prescription is written and finally cleared to fill is perilous because studies show that well in excess of 20% of patients never start therapy. Specialty pharmacies have shown that they can improve these adherence numbers.
Teams dedicated to disease treatment management closely track patient compliance and identify patients who are “at risk” of terminating therapy due to side effects or adverse drug reactions, especially in the early stages of therapy. In combination, specialty pharmacies deliver measurable value to payers by meeting their first goal— “Improve Adherence and Persistency.”
Utilization is always a concern for payers, especially when use of a very expensive drug may, in fact, be inappropriate. Specialty pharmacies drive appropriate utilization by ensuring correct dosing, that only enough days of therapy are dispensed at a time (eg, split fill on therapy induction),and that payer guidelines, such as step therapy, have been met. Additionally, because specialty pharmacies monitor patient progress throughout therapy, they can identify patients who are nonresponders, as well as poorly compliant patients who have no chance of realizing the full therapeutic benefit of the medications they have been prescribed. In consultation with the managing physician, these patients may be candidates for therapy termination. In combination, these activities meet the second payer goal—“Reduce Inappropriate Utilization.”
How one defines cost is another challenge. Is it the direct cost of the drug, is it a by-product of utilization (appropriate versus inappropriate), or is specialty pharmacy only 1 component of total cost of care, which includes drug, professional, and acute care (eg, hospitalizations) that may be incurred for a patient? Specialty pharmacies help payers positively impact cost, their third goal, by providing stable pricing for the product in combination with the utilization management activities described above.
CAN RETAILERS COMPETE WITH BIG SPECIALTY PHARMACIES?
Given the infrastructure required to deliver the services demanded by payers, retailers find it hard to compete. But traditional retailers are finding ways to participate actively in the specialty market. By subcontracting the complex—and expensive—core services, pharmacies can offer a seamless solution to the marketplace while preserving the “local neighborhood pharmacy” relationships they’ve fostered with their customers and patients.
Armada Health Care is the largest specialty pharmacy group purchasing organization. Armada has a long track record of providing transparent and fully integrated solutions for both large national specialty pharmacies and regional and local pharmacies that have not yet developed their own inhouse resources. The company offers a menu of services designed to meet the unique needs of each member pharmacy, including expediting prior authorization services and resolving patient financial obligations, which frequently involve manufacturers or philanthropic patient assistance programs.
Armada has also developed ApproveRx, a sophisticated online tool that helps pharmacies “fasttrack” prior authorizations and includes access to more than 10,000 of the most current payer-specific forms. This user-friendly tool significantly expedites the process for any pharmacies that lack the time and knowhow to navigate this complex process. Notably, this solution aligns perfectly with the second goal (reduce inappropriate utilization).
Additionally, Armada’s ReachRx program provides online therapy management support for more than 2 dozen disease states and acts as an extension of the pharmacy’s staff by offering comprehensive call center support, patient outreach and education, and expert therapy management. Patient assessment is a key objective of each patient contact to gauge both current compliance and potential inappropriate utilization. All of Armada’s servi-ces are linked through a state-of-the-art data warehouse that enables pharmacies to generate analytics demanded by manufacturers and payers. At a minimum, these reports document adherence and persistency, appropriate utilization, and cost—the top drivers cited by payers.
Lastly, members of the Armada group purchasing organization, including pharmacies with relatively small specialty volume purchases, can access best-in-market pricing for many medications and/or qualify to participate in manufacturer-sponsored programs that can generate rebates or fees for specific services they can perform. These solutions align perfectly with the third payer goal, which is to reduce cost, by enabling these pharmacies to compete for business without losing money.
Given these developments, one can anticipate that pharmacies with a vision for the specialty market will leverage these highly customized solutions to fill the gaps in their service model and allow them to serve all of the needs of their customers and patients.
About the Author
Robert J. Irene, RPh, BSPharm, president, Armada Health Care, is the co-founder of Armada Health Care. He graduated from Saint John’s University with a bachelor of science degree in pharmacy.