Implementing a Health-System Specialty Pharmacy

Modern medicine continues to push the boundaries of patient care, and specialty pharmaceuticals continue to be at the forefront of this innovation. The increased prevalence and utilization of specialty therapies has had a profound impact on the pharmacy industry overall. Inclusive of brand, generic, and specialty products, revenues for the industry are expected to exceed $483 billion in 2020. Experts predict specialty drugs will account for 44% of that revenue, a 5-fold increase from 2010 to 2020, according to the 2016-17 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, by the Drug Channels Institute. To capitalize on this trend, more health systems are offering specialty pharmacy services. In 2016, roughly 1 in every 11 hospitals had their own specialty pharmacy and nearly 50% of larger health systems (600 beds or more) owned a specialty pharmacy, according to the Drug Channels report.

Health systems are adding and investing in specialty pharmacies for many reasons. In-house specialty pharmacies allow hospitals to increase speed-to-therapy and improve clinical coordination for better care. As a growing number of health systems participate in risk-based contracts, having an in-house specialty pharmacy enhances a hospital’s ability to deliver a consistent, high-quality patient experience and continuity of care that leads to better outcomes. Improved value-based reimbursement is only one of several potential financial benefits, as 340B programs and specialty dispensing can also create new revenue streams.

However, with these clinical and financial opportunities come challenges. Those challenges can range from securing organizational alignment to fulfilling staffing needs and ensuring adequate product and payer access, to name only a few. Because every hospital, health system, and patient population is unique, each institution will also have a distinct set of challenges.

In this article, I will explore best practices for establishing a health-system specialty pharmacy that is thoughtfully and strategically connected to the patients it serves. I will also describe how to best leverage industry partners to navigate challenges and ensure success. These best practices begin with understanding the specialty pharmacy opportunity and building the right business plan.

EVALUATING THE OPPORTUNITY

If a health system or hospital is interested in implementing an in-house specialty pharmacy, they first need to identify how the pharmacy will support the organization’s larger strategic objectives. For example, one health system may want to reduce readmissions, while another may be focused on increasing profit margins. Industry consulting partners can be helpful in evaluating these goals and priorities, as well as assessing the viability of the specialty pharmacy opportunity. Together, the health system and its selected partners can review the volume of specialty physicians and patients and analyze the number of specialty prescriptions written and how difficult those prescriptions are to fill.

These data will begin to illustrate whether there is a baseline need for a specialty pharmacy. The patient and prescription data can also be compared with the organization’s centers of excellence (eg, oncology, neurology, or others) to see if specific patient populations have a greater need for specialty pharmacy services and should be prioritized once planning and implementation begin.

The initial analysis can also include a review of existing assets that may provide opportunities to leverage current staff, workflow processes, or other resources. For instance, the potential may exist to control initial costs if a health system is operating a retail or ambulatory pharmacy or if certain technology systems are already in use. Similarly, health systems and their partners should review the hospital’s physical footprint to determine whether there is existing space for the pharmacy.

Financially, the analysis will include a review of capital reserves within the organization and existing payer contracts. It will also highlight opportunities to capture increased 340B savings, which could be potentially significant depending on a hospital’s status.

FORMULATING A COMPREHENSIVE PLAN

If the initial analysis determines that a specialty pharmacy is a sound opportunity for the health system, the next step is to develop a comprehensive business plan and secure internal alignment. Once again, industry partners can be helpful in this stage, turning data into insights and an actionable business strategy.

The business plan needs to define priorities and include multiple financial models that demonstrate the specialty pharmacy’s potential return on investment (ROI) based on best- and worst-case scenarios. A health system team can use its consultants to help identify and plan for those different scenarios while remaining sensitive to capital investment constraints.

It is possible to manage initial invest- ments by prioritizing therapy offerings based on a health system’s most prevalent patient populations. We recently used this strategy to help a regional university medical center plan for and implement a specialty pharmacy. Pro-formas were created for the specialty pharmacy service lines that would complement its centers of excellence—oncology, hepatitis C, and rheumatology—before expanding to other conditions. By focusing on the select disease states with the greatest patient need, we were able to control costs while supporting patients and giving the health system time to determine how to best expand its offerings in the future.

In the same engagement, our team and the health system’s internal specialists collaborated to develop a plan that leveraged existing on-site ambulatory pharmacy staff to support the specialty pharmacy. The plan also took into consideration the technologies used for interactive voice response, point of service, and prescription fulfillment. Using existing personnel and systems, the planning team kept requested infrastructure investments low and total costs below the capital investment ceiling. These details and considerations helped secure senior leadership approval and support.

Every health system’s management structure varies, but ultimately securing C-suite or senior leadership buy-in is critical for bringing the plan to life. Gaining that support begins with ensuring all decision-makers understand the value of specialty pharmacies, both how they operate and the significant and growing role they play in patient care. As one midsize health system shared with us, it was important to start by explaining to leadership how a specialty pharmacy can promote patient compliance, support quality outcomes, and control costs. By connecting those dots for their senior leadership, decision-makers could see a much fuller picture of the specialty pharmacy’s potential impact.

Planning teams should also be cognizant of what will resonate with the decisionmak- ers when educating them on the opportunity of a specialty pharmacy and tailor communications accordingly. For instance, when meeting with the chief financial officer, the planning team should explain the need for specific resources and the specialty pharmacy’s overall potential ROI. They should also illustrate the impact the investment will have on patient outcomes, physician teams, and the hospital’s finances. When meeting with the chief medical officer, highlight how the specialty pharmacy can reduce burdens on providers and increase the potential for improving the patient experience and outcomes.

It is also a best practice to include physician champions as advocates in conversations with the C-suite. Physicians can explain directly to leadership how a specialty pharmacy will improve their relationships with patients, allow more time for care, and improve adherence rates and patient satisfaction. With experience presenting similar business plans to other hospital C-suites, the right consultative partner can provide valuable insights on how to best present the plan to the organization’s decision-makers.

IMPLEMENTING THE SPECIALTY PHARMACY

With a comprehensive business plan in place and approval from C-suite secured, the planning team can transition to imple- mentation. Your strategy will guide the many tactical decisions that are made in this phase. Naming a project manager is a great place to start as that role will help keep the implementation within scope, timeline, and budget. The project manager can be an internal resource or a third party, depending on staffing and team structure.

If using an external resource, consulting partners can provide the organization and oversight needed for each stage of the implementation process. External partners have both the ability to offer strategic guid- ance that will help streamline and fast track implementation and the resources to provide additional staffing support, if needed.

In a recent scenario, a regional health system needed to embed specialty technicians in each of its clinics but did not have the internal staff to fill those gaps. The team turned to us to provide experienced technicians who could fulfill and elevate the role. In addition to several other responsibilities, our technicians used their expertise to help obtain insurance pre-authorizations for patients with hepatitis C. This single change in the health system’s process accelerated time-to-therapy for patients with hepatitis C so dramatically that the physicians were able to decrease the wait time for follow-up appointments from nearly 3 months to just 1 month. This is an example of how leveraging a partner to help make and execute tactical decisions can turn a specialty pharmacy strategy into a real-world solution that benefits patients.

Throughout the implementation process, other decisions will need to be made regarding structural layout and design, workflow processes, and technology systems for the specialty pharmacy. Policies, procedures, and accreditation readiness programs will also need to be developed. Additionally, partners can advise internal experts on best practices for developing patient outreach and marketing plans to effectively communicate the value of the new specialty pharmacy.

OPTIMIZING ACCESS

An important component of the implementation phase is optimizing the health system’s access to product distribution net- works and payer contracts. These factors directly inform how many specialty patients the pharmacy can support. It is particularly important to consider the health system’s centers of excellence when seeking out access to these networks.

In the initial stages of the build-out, it may be beneficial to partner with an independent specialty pharmacy. These partners are often instrumental in providing access to specific medications and payer contracts. They also can assist in situations in which challenging or unique logistics prevent the health system from providing the best patient support.

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