The specialty pharmacy is a new breed of prescription drug fulfillment that has developed in response to the dramatic growth of complex medications that cost from a few thousand dollars to more than one hundred thousand dollars. These medications are typically to treat rare, life-threatening conditions.
You Can’t Get Them Anywhere Else
There are no consistent definitions of specialty pharmacy. However, they typically deal with medications that have very specific transportation, storage, and administration requirements that can’t be practically met by traditional pharmacies. Many require refrigeration during and after shipping, for example. Some, like infusion and injection products, require support from a pharmacist or doctor due to the complexity of implementing the product. According to the American Pharmacists Association, a medication considered a specialty pharmaceutical may have some or all of the following characteristics:
Drug Channel estimates that the market for specialty medications grew from $20 billion in 2005 to $78 billion in 2014. The numbers are somewhat murky because specialty pharmacies and drugs are self-labeled as such. Conditions requiring specialty pharmacy services include hepatitis, HIV, immune deficiencies, infertility, transplantation, anemia and neutropenia, enzyme deficiencies, asthma, HIV, and many oncology treatments.
One reason for the continuing growth of specialty medications and pharmacies is that the Affordable Care Act of 2010 created a shortened approval pathway for many of the drugs that require special handling. Also, specialty drug delivery represents a way for pharmacists to increase revenue while reducing overhead. According to a commonly quoted statistic, two percent of the patient population is responsible for 20 percent of all drug costs, which some think is an underestimate. Some employer groups estimate that one percent of its members make up 30 percent of the medication costs.
Less Price Pressure
Also, in the retail medicine world, the price pressure is strong on commonly used drugs with generic equivalents. Specialty medications may be made by only one company due to the cost of development, so the drug maker has more pricing power. The way insurers can reduce cost is promoting more efficient delivery and patient adherence.
Insurance companies support specialty pharmacy drug delivery because the pharmacist trains patients on the proper way to take their medications and coach them through possible practical challenges like storage and maintenance of equipment. This makes it much more likely that the patient will stay healthy and, perhaps more important to the bottom line, that the medication won’t be wasted by misuse or confusion. The pharmacies are reimbursed for their service as well as for the medication.
And the patients like it. The personal service, the availability of the pharmacist for advice and assistance–it’s a high touch, highly personalized experience.
For all these reasons, retail pharmacies are scrambling to get into the specialty pharmacy business, as are insurers, hospitals, and pharmacy benefit managers. One way the pharmacies will try and differentiate is through service–if they can make drug delivery and administration more convenient, personal, and effective, they will be rewarded with loyalty from patients and from healthcare providers.