Specialty pharmacy presents itself as both a challenging business model and a significant financial opportunity under the right circumstances, especially for health systems. Kevin Colgan, MA, FASHP, of Rush University Medical Center and Kyle Skiermont, PharmD, of Fairview Pharmacy Services provided an overview of specialty pharmacies and presented strategies for building a successful specialty pharmacy business.
Specialty pharmacy presents itself as both a challenging business model and a significant financial opportunity under the right circumstances, especially for health systems. Kevin Colgan, MA, FASHP, corporate director of pharmacy, Rush University Medical Center, and former president of AHSP, presented an overview of specialty pharmacy. While there is no concrete definition, a specialty drug can be characterized as a drug that costs more than $750 per month, treats a rare condition, requires special handling, requires special monitoring, or is used in a limited distribution network. Often, they are self-administered injections or oral medications with complex dosing regimens that, if handled poorly, can lead to significant problems for health systems, such as readmissions or overall greater costs to the system. Specialty pharmacies are an attractive distribution channel for health systems, payers, and manufacturers. One reason is that they offer improved control over how the drug is administered and managed. This can lead to reductions in waste and improved adherence, and ultimately, better outcomes.
Pharmacies offering this service go to great lengths to provide value-added services, such as rapid delivery, medication tracking, thorough patient education, and drug therapy management. This includes requisite monitoring and dosing adjustments as well as 24-hour, 7-day per week availability. Additionally, information gathered during these interactions is well documented and can be relayed back to the prescriber and the insurer.
Growth of the specialty market has been steady. A large percentage of pipeline drugs (>50%) and new indications (>70%) fall under the specialty category. Inflammatory conditions, multiple sclerosis, cancer, and hepatitis C represent the primary therapeutic classes in the specialty marketplace.
Kyle Skiermont, PharmD, director of specialty and infusion operations, Fairview Pharmacy Services, presented strategies for building a specialty pharmacy business. Multiple barriers exist to establishing a foothold in the open market. There is a fairly well established field of players, including 3 companies that generate approximately two-thirds of the revenue in the specialty drug market. Health systems often have difficulty focusing on this opportunity because of an ever-increasing number of competing priorities and a lack of experience with specialty pharmacy. However, through careful analysis of the financial opportunity and development of a robust business plan, a solid case can be made for pursuing this aggressively. Using consultants is another way to build the case for a homegrown model. Depending on the circumstances, a consultant may recommend a joint venture with an established specialty pharmacy.
If the decision is made to create a specialty pharmacy within a health system, it is critical to assign a hospital leader to the project, develop a detailed project plan, hire the appropriate number of staff, and dedicate the proper amount of space based on the expected volume. It is also essential that customer service be a central focus of the model. Expectations should be set at a high level, as customer service is routinely monitored and measured. It is strongly recommended to begin slowly with a few disease states to build confidence in the services provided. Seeking and receiving URAC specialty pharmacy accreditation is another way to build confidence, both internally and externally, as it shows a commitment to quality and safety. New specialty pharmacies can differentiate themselves in a highly competitive market by leveraging the data available from health-system electronic health records to show improved outcomes associated with their provided services.
Dr Skiermont noted that the trends in the insurance marketplace include increased use of prior authorization, a shift in favor of coinsurance over copays, an attempt to block copay coupons, a 4-tier benefit design, income-based benefits, and manufacturer performance guarantees.
The speakers suggested that health systems first evaluate their prescription volume. It is also important for each health system to identify which structure is the best fit and to focus on new opportunities so that they can determine whether creating a specialty pharmacy is appropriate for their business.