The Rise of Specialty Drug Management: How Healthcare Systems are Responding

Our recent webinar, "The Shifting Landscape of Account Management in Pharma: Navigating Specialty and Rare Disease in Integrated Networks" explored the critical evolution of the pharmaceutical industry's portfolio towards Specialty and rare disease medications, the impact on our customers, and the subsequent need to incorporate a strategic account management approach to succeed in this marketplace. This article expands on the key themes and insights shared during the session.

Healthcare systems face unprecedented challenges in managing the dramatic growth of Specialty pharmaceuticals. While these innovative therapies offer breakthrough treatments for complex conditions, their high costs are straining healthcare budgets and driving the need for new management approaches. Understanding this evolving landscape is critical for both healthcare providers and life sciences organizations.

The Specialty Cost Challenge

The numbers tell a compelling story - Specialty drugs now account for over 50% of total pharmacy spend while being utilized by only 6% of patients. This imbalance creates significant financial pressure on healthcare systems, particularly as the Specialty pipeline continues to expand. Industry projections suggest Specialty spending will reach nearly $500 billion by 2025, with an anticipated growth rate of 8% annually. Additionally, 80% of new FDA approvals in 2024 were expected to be Specialty medications, and this trend will only accelerate.

Healthcare systems must balance ensuring appropriate patient access to these innovative therapies while maintaining financial sustainability. This challenge is particularly acute as organizations take on more risk through value-based contracts and population health initiatives.

Evolving Management Approaches

In response, healthcare systems are implementing increasingly sophisticated management strategies. Prior authorization requirements now exist for over 90% of Specialty medications, allowing for careful evaluation of appropriate use. Organizations are also leveraging clinical pathways embedded in electronic health records to guide treatment decisions based on evidence-based protocols.

Other key management approaches include:

·??????????? Mandated Specialty pharmacy distribution to ensure proper handling and administration

·??????????? Site-of-care optimization to reduce costs while maintaining quality

·??????????? Enhanced patient support programs to improve adherence and outcomes

·??????????? Implementation of outcomes-based contracts that tie reimbursement to results

The days of simply adding new Specialty drugs to formulary with minimal restrictions are over. Healthcare systems now require comprehensive management strategies spanning the entire patient journey from initial prescription through ongoing therapy.

Impact on Access and Reimbursement

These enhanced management approaches create new dynamics around access and reimbursement. Manufacturers must now demonstrate value through robust clinical and economic evidence. Coverage decisions increasingly consider both clinical outcomes and total cost of care impact.

Healthcare systems are also evolving their approach to Specialty reimbursement. Many are implementing innovative payment models that share risk between providers, payers, and manufacturers. Others are exploring indication-based pricing that varies reimbursement based on effectiveness in different patient populations.

The Path Forward

As Specialty medications continue to drive healthcare innovation and costs, integrated health care delivery networks will continue to evolve in order to manage costs and ensure quality of care. As a result, Pharma must evolve as well.? This means changing their existing go-to-market strategy for Specialty to now incorporate key account management as the focal approach.

Pharma companies must focus on building capabilities in several key areas:

·??????????? The right roles to navigate Specialty treatment within these well controlled accounts

·??????????? Fostering high-performing, cross-functional account teams to successfully drive results

·??????????? Incorporating strategic account management competencies alongside Specialty competencies

·??????????? Developing strong change leaders to successfully take the organization through the transition

The Specialty management challenge shows no signs of abating. Pharma companies that proactively develop comprehensive Specialty account management strategies and capabilities will be best positioned to thrive in this evolving landscape while delivering optimal value.

Next Steps

At WLH, we are experts in transforming strategic account management capabilities for life sciences organizations. As the industry landscape rapidly evolves, we can help you future-proof your SAM function.

Our team can provide a comprehensive assessment of your current abilities, identify strategic gaps, and co-create a customized roadmap for building world-class account management competencies.

To discuss your specific needs and challenges, please reach out to schedule a complimentary consultation. We're confident we can help you navigate the shifting tides of Specialty and rare disease account management and deliver meaningful value for your critical healthcare partners.