Specialty pharmacy is a lucrative opportunity for community pharmacy

January 10, 2016

Pharmacists will need to understand and prepare for a wide variety of challenges on fronts ranging from accreditation to marketing.

The traditional pharmacy business model is under siege as it faces challenges from healthcare reform and competition. As community pharmacies scramble to survive, the specialty pharmacy model offers a lucrative opportunity for growth.

The key to success? You’ll need to understand and prepare for a wide variety of challenges on fronts ranging from accreditation to marketing. That’s the message from community pharmacists who are urging their colleagues to take advantage of the growth in specialty pharmacy.

“The time we need to start doing this is now,” said Jonathan Grice, PharmD, director of retail pharmacy with HomeTown Pharmacy, a 36-store chain based in Michigan. “This is not going to give you three Mercedes in the driveway and a house in the Hamptons. Don’t look at it that way. Look at it as a way to diversify your business.”

See also: University in Ohio builds specialty pharmacy

In October, Grice and three other community pharmacists spoke on a panel titled “How to Create a Specialty Pharmacy Presence for Your Community Pharmacy” at the annual convention of the National Community Pharmacists Association (NCPA).

What is specialty pharmacy?


The first challenge: figuring out exactly what “specialty pharmacy” means. The definition is not clear cut, explained Kevin Day, PharmD, executive resident at NCPA.

 

Manufacturers tend to define specialty drugs as those with limited distribution and closed or limited networks. Distribution could potentially be so limited that manufacturers might only distribute certain drugs to patients directly. “That’s possible down the line,” Day said. But, of course, it would be devastating to community pharmacies. “Hopefully we won’t see it.”

Payers have a wider definition. For them, specialty drugs inhabit the fourth tier beyond generic, preferred brand, and non-preferred brand drugs, Day said. These drugs are typically expensive and may have a much higher co-pay than normal- 30% of cost in some cases.

This is where pharmacists enter the picture. As of 2014, according to IMS Health, specialty drugs accounted for $124 billion in U.S. spending-a third of all drug spending. The total is up from $76 billion in 2010.

By 2018, Day said, specialty drugs will still account for a low percentage of all drugs dispensed. But they’re expected to make up a whopping half of all drug spending. There lies the opportunity. “We’re working with payers to try to get into that space,” Day said.

Here are common characteristics of specialty drugs:

They’re pricey, sometimes even shockingly expensive.

Sovaldi, one of most popular specialty drugs, gained fame last year when news reports spotlighted its $1,000-per-pill wholesale cost-$84,000 over a course of treatment-that forced some states to limit its availability when provided as a government-funded health benefit for hepatitis C patients.

 

Sovaldi has company. According to news reports, the world’s most expensive drugs-typically prescribed only to dozens or hundreds of patients-cost hundreds of thousands of dollars a year each. One drug, Glybera, which treats an extremely rare genetic disorder, costs $1.1 million a year, according to news reports. It’s not yet approved in the United States but is available in Europe.

They treat a rare and chronic illness. Many specialty drugs treat cancer, multiple sclerosis, genetic disorders, infectious diseases, and auto-immune/inflammatory diseases.

They’re injectable or infused.

Complex manufacturing is required.

There are special requirements for storage and handling.

Complex patient monitoring is required (eg, for compliance and side effects).

The Table lists the top 10 specialty drugs in 2014. Can a community pharmacy simply declare itself a specialty pharmacy? “You might be able to just call yourself one,” Day said, but the chances of that actually working are getting smaller.

See also: New era in specialty pharmacy

Instead, he said, it’s wiser to go through the motions, such as getting accredited and building partnerships. And, said Aaron Clark, PharmD, of Tennessee-based Blount Discount Pharmacy, pharmacists should also be prepared to handle complexity in areas like performance standards.

“It’s really easy for us to say we fill X prescriptions a week, and that’s the only number we know,” NCPA’s Day said. “If we want to offer specialty drugs, we need to track our data and know about it and be able to talk about it.”

 

Clark put it this way: “If you think all you have to do is fill a prescription, you’ve got a problem.”

Help available in specialty arena


Fortunately, a number of companies are working to give independent pharmacists a helping hand in the specialty pharmacy arena. According to Day, they include ArmadaOne, Aureus Health Services, KloudScript, and Diplomat.

Grice, the Michigan pharmacist, said his pharmacy turned to KloudScript, which provides assistance in areas like technology, training, and access. The pharmacies, meanwhile, take care of drug fulfillment and patient engagement.

Grice said it’s important to examine these issues when choosing a partner:

• What are their upfront costs, and how much risk is there?

• Will they sell out to a competitor or mass merchant?

• Are they a competitor?

• Do they have a comprehensive program designed for community pharmacies or did they accidentally fall into the specialty pharmacy market?

• Does the partnership provide more than back-office support?

• Are goals aligned for long-term growth and success?

 

Even with the assistance of partners, however, community pharmacists must do more than simply wait for patients with specialty needs to come to their doors. Here are some of the responsibilities that pharmacists must embrace:

• Accreditation

“It’s expensive, and it’s confusing when you first get started,” Clark said.

• Marketing to physicians.

“We told doctors that we could do anything that big-box stores could do, but we’d do it better,” Clark said. “We’d give unsurpassed care to these patients. That’s something that big-box stores can’t do when they’re based a thousand miles away.”

What does the highest level of care mean?  Clark explained: Pharmacies should handle referrals when they can’t fill a specialty prescription. They should coordinate financial assistance for patients in need, an especially important role since co-pays for some of the drugs can run to $5,000. And they should have the patience to deal with the extra time needed to deal with these prescriptions. 

“We feel like we’ve done a patient a disservice if we don’t get the drug to them the moment they walk in the door that day,” said Frank Steed, RPh, of Gerould's Pharmacies, a chain based in Elmira, NY. When it comes to specialty pharmacy medications, in contrast, “there’s a complete clinical background that’s done and the education process. There’s a lot behind the scenes that goes on to get that drug to that patient. And with some patients, you may triage more than you’re filling.”

• Marketing to the public.

“Get your name out: New logo, new website, promotional items,” Clark said. “Community outreach was huge for us. . .  things like seminars and talks on issues like HIV/AIDS. If you’re a specialty pharmacy, you’ve got to do that.”

• Willingness to deal with issues like reimbursement rates and performance standards.

“Everyone thinks that if you’re going to get into specialty, you’ll get $250 on every script. But that’s not true,” Clark said. “We were determined to do everything they asked for, everything they threw at us. Will you accept these reimbursement rates? Yes, we will.”

 

Pharmacies must also be willing to accept pressure on data collection issues like phone wait times and dispensing accuracy, he said.

So why bother with all this? “There’s huge opportunity for growth,” Clark said, and a chance to provide high-quality care to patients who need it. “But we have growing pains,” he cautioned. “You’ve got to be patient.”

Randy Dotingais a freelance writer based in San Diego, Calif.