The #1 Reason You Need a Specialty Pharmacy Strategy

The healthcare landscape in our country is on the cusp of dramatic change, and a key component of that transformation is specialty pharmacy. Specialty drugs now account for roughly 40% of the $450 billion pharmaceutical market, and that number is expected to continue to increase with no clear end in sight.

Given the explosive growth of specialty over the last 4-5 years, every healthcare provider, regardless of size, needs to understand specialty pharmacy and explore how they might be able to leverage it to keep their patients healthier , while making a real impact on organizational ROI. At my consulting firm, we always say “not everyone needs to be in specialty pharmacy, but every provider and stakeholder should have a specialty pharmacy strategy.”

But the core reason runs deeper than that. Here’s why:

The Human Side of Specialty Pharmacy

I was at a conference not long ago, and a health system pharmacy director came up to me and asked if I could talk to them about what steps they need to take to open a specialty pharmacy. One of my first questions to this person was “what made you look at this now?” So, she then proceeded to share a story about a little girl who had had a liver transplant.

Her health system had saved a 14- year old girl from the brink of death and had successfully performed a liver transplant. At the time of discharge, there were an array of specialty drugs required to keep her alive and to keep her new liver functioning. The health system didn’t have a specialty pharmacy. What’s worse, they were locked out by a PBM (Pharmacy Benefit Manager) and couldn’t dispense the drugs the girl needed to sustain her for the rest of her life.

The health system provided the family with certain medications they were able to supply, and the rest of the critical drugs were called in by their pharmacist to another pharmacy that could (and were supposed to) to dispense the medications. The medications never got there, and the girl went into liver rejection. They rushed her back to the hospital, and within a short time, they lost her.

It’s a death that shouldn’t have happened. And it could have been avoided if the health system had been allowed to dispense the drug and take complete care of the patient that required critically time sensitive and life sustaining medications. However, the health system was denied that privilege (or should I say right), because of the convoluted nature of our healthcare system and PBM lockouts.

For this reason (and many more), health systems in the last five years have been on a mission to look at ways that they can integrate specialty pharmacy into their outpatient offerings. Outpatient pharmacy has traditionally been looked upon as a cost center; however, the opportunity now exists for health systems to look at the triple aim (care, health, and cost) and have a 360-degree view of their patients. They can accomplish that by offering specialty pharmacy services.

The Emergence of Integrated Care

Specialty drugs will continue to dominate the drug pipeline over the next decade. And most of the medications coming down the approval channel will be either oral or injectable, and more than half of them will be specialty products (with oncology, autoimmune, and HIV therapeutics leading the way). Specialty pharmacy is a growing part of a solution to take care of very chronically ill patients. It’s estimated that by 2020, over 50% of outpatient drugs spend will be in specialty medicines.

Today, many health systems, facilities, and organizations not only want to have a specialty pharmacy strategy, they want to have a specialty pharmacy as well so they can provide complete and integrated care to their patients and prevent those horrific situations like the one described above, from happening ever again.

Health systems no longer want to be held hostage by PBMs in determining the level of complete care they provide. They now look to be proactive and have a comprehensive approach to that care. Our national health system is currently fragmented, and it’s not getting any better. There needs to be an alignment with the payers of the world and value-based reimbursement. When a patient like that young girl passes away, it has ripple effects on the entire health system. And that pales in comparison to the devastation to her family on this unnecessary loss of their child. As a mom, nothing scares me more than the mere thought of losing my child.

Where to Start?

Health system C-suite officers are now asking “how do we start? How can we get there? And what are some of the things to consider when formulating a special pharmacy strategy?”

We find that most health systems want to look at what specialty pharmacy ROI means to them. For a 340b health facility with three hundred beds, it might make sense financially for them to build a specialty pharmacy. But for a rural clinic with only ten specialty pharmacy patients a month, the optimal solution may be to partner.

We often say in our office, “if you’ve seen one health system or hospital, you’ve seen only one health system or hospital.” No two are exactly alike. They may have different missions, patient populations, geographic locations, and they may have an outpatient pharmacy or not. They may have started in specialty for their employees or for a variety of other reasons.

Only 20 to 25% of health systems today have any type of specialty pharmacy offering. And of those, maybe 2% are optimized. Many established health systems are approaching us now for solutions because they’ve only been able to capture 20 to 30% of their potential.

Health systems are used to treating chronically ill patients, so the care aspect isn’t unique for these organizations. What is new to them is getting access to the drugs, making sure they have the right systems to get reimbursed, figuring out ways to get patient financial assistance, helping patients stay on therapy, and making sure they’re getting the product on time. It’s a new business line to add on to an existing successful one.

Specialty pharmacy is exciting and fast paced. But at the end of the day, we can’t lose sight of the fact that we’re taking care of very sick patients, people that need to take medication so they can get up in the morning and enjoy the day with their children and families. We must remember that health systems are relying on us to take care of chronically ill patients that need that extra touch.