Specialty in Retail: What Does It Take to Participate?

A retailer’s decision to get involved in the specialty pharmacy marketplace should be an informed one that encompasses careful research and a full understanding of all of the stakeholder requirements. 

How does the industry define the provision of specialty products in “retail”? It is a definition that varies widely and depends on who is answering the question. Unfortunately, some antiquated industry practices and inconsistencies also contribute to the uncertainty. We will explore what it takes to participate in the growing specialty marketplace, but also review some industry inadequacies and challenges.

It seems that every week I get a few more calls from organizations wanting to participate in the growing frontier known as “specialty.” I ask them, “So you want to get into specialty…why do you want to participate? Why now? What is your current footprint or business model? And most importantly, are you willing to FULLY finance your potential market entrance?” After reviewing things at a high level, there is less than a 25% interest level in taking the next step to actually participate. But why? Doesn’t the drug pipeline primarily consist of biotech products? The answer is a very strong YES.

Unfortunately for some, it is becoming harder and harder to survive doing traditional pharm-acy. I define traditional pharmacy as focusing on a few branded products and the ever-increasing list of $4 generics, and maybe some greeting card, OTC product, candy, or cigarette sales (a BIG kudos to CVS Health and others for pulling tobacco sales out of their business, something I personally hope is a trend that we as an industry embrace and follow). And getting into specialty is tough, too. Mistakes can be very costly and can negatively impact even existing business lines.

So, why is it so tough to get into specialty? One word: expectations. There are very high expectations from the stakeholders who make the decisions and/or allow participation. Thus, the stakeholders also set the actual “barriers to entry.”

Payers typically want their membership to have:
  • A safe supply chain and distribution solution purchasing directly from manufacturers or a tier 1 wholesaler that meets the pedigree requirements of the Healthcare Distribution Management Association, Verified-Accredited Wholesale Distributors, and others.
  • High-quality services and accreditation from URAC, the Accreditation Commission for Health Care (ACHC), and others; continuous quality improvement programs; performance metric–monitoring capabilities; customer satisfaction surveys; redundancy; error-tracking; and issue-resolution tracking.
  • National pharmacy licensure to cover remote membership/employees in all 50 states plus Washington, DC.
  • Consistent services and network of providers: Payers typically want a network that will meet the access and service needs of their individual organization. Not all products are available from any 1 specialty pharmacy, so most payers have preferred pharmacies by disease category, location, or product. They want a similar experience for their membership at all of their contracted specialty pharmacies.
  • Data: Performance data, clinical data/outcomes, MD information, and pricing trends are entry-level requirements for most specialty networks.
  • Dedicated services: This would include toll-free telephone and fax numbers, clinical programs, and full-time employees.
  • A fair price: Pharmaceutical manufacturers want safe, high-quality, consistent services at fair market value rates.
Physicians/offices have their individual wants and needs, too. They typically include:
  • Office efficiencies: Less office work to get a patient on the prescription.
  • Reimbursement information: Is the patient covered? What is their cost?
  • Copay assistance support: A patient who can’t afford the medication won’t start or stay on it long.
  • Easy product access: Options for the patient that allow consistency, safety, and clinical services.
  • Patient education: Some offices provide educational support, while others let the specialty pharmacies provide services.
  • Communication: Offices want to know if the patient is able to get the drug, if the patient is getting the drug, that their patients have been helped, when patients are having side effects/dropping off therapy, or if the patient has reimbursement issues. All of the stakeholders want positive outcomes, appropriate utilization, and an easy process.
  • Data: Increasingly, offices are asking specialty pharmacies for “report cards” specific to their patients being serviced.

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