Overall growth in specialty pharmacy today is significantly outpacing traditional pharmacies and soon will make up approximately half of total pharmacy spend.
The field of specialty pharmacy is exactly what it sounds like—it is a unique, rapidly growing segment of the pharmacy industry that primarily focuses on the dispensing of high-cost, high-touch medications.
High cost, in this instance, typically refers to therapies that cost upwards of $700 per month for a patient—simple enough, right? Defining “high touch” is a little bit more obscure. Think of it as analogous to being considered “high maintenance”. For our purposes, this translates to medications that require extra time, attention, and/or resources from most or all the stakeholders associated with it from production to consumption, namely manufacturers, wholesalers, prescribers, payers, pharmacies, and patients. Specialty medications are also “special” in that they often tend to treat disease states that affect smaller patient populations than those most often seen at traditional retail pharmacies. For example, according to the American Heart Association, in 2020 an estimated 918 million individuals globally are living with a diagnosis and/or are being treated for hypertension. Conversely, according to the National Multiple Sclerosis Society, only 2.8 million people worldwide suffer from multiple sclerosis, a common disease state targeted by specialty medications. Additionally, therapies may also be considered specialty medications when they are prescribed only by specialists and/or are restricted from a distribution standpoint. Other specialty medications may include biotech products, medications that require special handling, products with unique administration routes such as injectables, or drugs that are included and restricted by a Risk Evaluation and Mitigation Strategy program and require extra monitoring. There is no exhaustive drug list or 1 set of criteria that specifically defines which medications are considered specialty medications. Different organizations or companies may have completely different lists or criteria from one another for the medications that they require to be dispensed in a specialty pharmacy, thus making this industry even more complex and tricky to define and conceptualize.
As we know, the concept of pharmacies, drug stores, and apothecaries have existed since ancient times with traditional pharmacies operating in most cities, towns, and villages for many, many decades. The concept of specialty pharmacies, however, has only come into existence in much more recent times, beginning in the 1970s, and has been in much more focus over the last decade or so.
Specialty pharmacy models first originated from the need to better support and manage the medication therapy of primarily transplant and HIV patients. The relatively new-to-market, complex medications used to treat these disease states were generally higher cost and required more patient counseling regarding proper use, the importance of compliance, and the adverse effects compared with typical new-to-market medications. Dispensing these medications in pharmacies specifically equipped and trained to handle this new level of complexity resulted in a higher level of care for patients and, often, better outcomes. From there, specialty pharmacy has continued to grow over the years to include hundreds of additional drugs for similarly complex disease states such as pulmonary hypertension, immune disorders, and many more. This niche industry also began to add a focus on drugs for exceedingly rare and orphan diseases to facilitate a higher level of expert care for patients from pharmacists specially trained and educated on these smaller groups of medications than a traditional retail or mail order pharmacist.
As the specialty model has gained more volume, attention, and success, this newer branch of the pharmacy industry has grown tremendously over the past few decades. This is no surprise as these licensed, accredited pharmacies offer a traditional, yet unique service to patients by dispensing medications when needed while also providing much more personalized medication counseling, adherence coaching, and third-party support – something today’s retail pharmacies are not structured to routinely provide at such a high level. This is not to suggest that retail pharmacists are not capable of providing quality patient care and experiences, but simply that the time associated with these processes for specialty drugs often exceeds the typical time required or allotted for a similar process in the community setting, referring back to the “high-touch” concept.
Take for example billing a prescription through a patient’s insurance. In the specialty setting, approximately 85% of prescriptions require prior authorization (PA), which can take several minutes to hours between initiation, prescriber collaboration, paperwork, and follow up. This far exceeds the percentage of prescriptions that require PA at retail pharmacies by a large margin. Similarly, many contracts associated with specialty medication manufacturers require that the dispensing pharmacy ensure the highest level of patient adherence and/or provide clinical programs and support—both of which take significant pharmacist resourcing and time.
We should also consider the steep increase in specialty-type medications coming to market as the science and research on hard-to-treat conditions continues to improve year over year. It is clear how difficult and overwhelming this could quickly become in the retail setting for pharmacists to remain up-to-date and knowledgeable on each new medication hitting the market, despite rarely dispensing them. To note, overall growth in specialty pharmacy today is significantly outpacing traditional pharmacies and soon will make up approximately half of total pharmacy spend with more than half of all newly approved drugs potentially being considered specialty medications. These 2 factors, when considering the model of retail pharmacy, further highlight the need for specialty pharmacies.
Check back next week for Understanding Specialty Pharmacy Part 2: The Patient Journey.
About the Author
Molly Gombos earned her Doctor of Pharmacy degree from the University of Pittsburgh in 2014 and is currently enrolled at Pitt in the Master of Pharmacy Business Administration (MPBA) program, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines. Molly has spent the last 7 years working in community pharmacy, initially as a pharmacist and pharmacy manager and most recently working in pharmacy operations. Her current role is working in the patient safety and clinical space with focus on clinical decision support.