Justin Smerker, PharmD, MSPBA

Launching any new pharmaceutical brand can be an extremely daunting task. There is an entire host of decisions that must be made, including distribution strategy, physician detailing, pricing, advertising, and regulatory concerns, among others. 

With robust bipartisan support trying to regain control of rapidly increasing drug prices, it would be reasonable to assume that congress will take measures necessary to do just that. Congress may focus efforts toward clearing the FDA backlog. 

This will lead to an increase in the rate of new product approvals and increase competition in the marketplace to drive down product costs. As a result, it is anticipated that a significant number of biosimilar products currently in the pipeline will be approved in the near future; however, a great deal of uncertainty exists surrounding biosimilar utilization, which adds complexities not seen with traditional products. Therefore, there are a number of questions manufacturers should consider as they prepare to successfully commercialize biosimilars.

First, how do manufacturers want their biosimilar to be perceived? Do they want to market the product as a generic of an already existing brand biologic or do they want the product marketed as a branded generic? 

Manufacturers have the capability to do either and there could be fundamental changes to marketing strategy based on the approach employed. Brand name products have always commanded a price premium over their generic counterparts. 

Therefore, biosimilar products marketed as brands reasonably stand to have a higher price point than a biosimilar marketed as a pure generic. Conversely, biosimilar products marketed as generics likely would have an opportunity to gather a greater market share and, consequently, potentially yield higher overall revenues. Manufacturers should employ extensive market research to determine which approach may be most beneficial for their product.

Secondly, manufacturers must consider what the anticipated physician response will be to their therapy. Influencers of physician acceptance may include the level of comfort with existing therapy options, ease of patient access to therapy, cost sensitivity, and the industry reputation of the biosimilar manufacturer.

Because the production of biologic medications takes a greater deal of expertise and specialized equipment than traditional generic medications, prescribers will have a higher level of comfort working with established and reputable manufacturers. Furthermore, as physicians continue to focus on value and quality, biosimilars that are able to significantly lower costs for health plans, pharmacy benefit managers, and patients will be welcomed. 

Third, manufacturers should implement an appropriate direct to consumer advertising campaign and identify patient considerations that are key to their biosimilar product utilization. The advertising campaign should clearly convey that there is now a possible alternative to a more expensive branded biologic. 

Historically, direct to consumer advertising has been very successful in driving utilization and there is little doubt that this would not hold true for biosimilars, as well. The ability of the manufacturer to convey the efficacy and safety of the newly available product and transitioning existing patients to a biosimilar product is crucial. 

To remain competitive with the branded products, manufacturers offering biosimilars will need to ensure appropriate financial assistance programs are in place. Manufacturers have done a fantastic job offering co-pay and other assistance programs for commercial, Medicare, or other government funded individuals for high cost biologics. 

These programs include the Patient Access Network, Healthwell, and the National Organization for Rare Diseases to name a few. In many cases, the out of pocket cost to patients is fully covered by these programs. 

To be competitive, biosimilars will need to offer similar programs that cover all out-of-pocket expenses for patients. At the same time, biosimilar manufacturers will need to obtain preferential formulary positioning on the leading pharmacy benefit manager and health plan formularies. 

While this may seem relatively easy to accomplish due to a lower published average wholesale price and wholesale acquisition cost for biosimilar products, branded manufacturers for a large majority of biologics are offering deep rebates on their products to payers. Successful negotiation with payers will be pivotal to product utilization.

Obviously, the degree of market competition within a therapeutic category or disease state will determine the degree of price concessions that a manufacturer will offer a payer. Manufacturers will be tasked with making key decisions to their channel strategy too. 

Biosimilar products are expected to be less costly than their branded counterparts; however, they will likely still be priced high enough to be considered specialty medications. Moreover, most biologic medications are injectable, require special storage and handling, and have unique dosing and administration instructions associated with them. 

All of these criteria are traditional hallmarks of specialty products. Therefore, it is reasonably expected that the majority of biosimilars will be dispensed by specialty pharmacies. 

When selecting specialty pharmacies for distribution, manufacturers may select open, limited, or exclusive networks. One strategy for success may be to grant access for biosimilar products to pharmacies that currently dispense the branded medication. 

This would serve 3 key purposes: First, pharmacists who have dispensed the branded medication possess the appropriate disease state and product training; second, there is a greater opportunity for patient conversion from branded product; third, pharmacies dispensing branded products have established relationships with high volume prescribing offices and may be best positioned to recommend conversion to the biosimilar.

With so many considerations beyond a traditional generic launch, manufacturers will need to perform comprehensive market research to best position their biosimilars for launch once approved. 

Because the profile of almost all biosimilar products will meet widely accepted specialty product criteria, specialty pharmacies will serve as the key channel through which they are dispensed.  Specialty pharmacies should prepare to accept and assist with the unique launch considerations of biosimilars.

S. Milmo, "Biosimilars: Making the Switch Comes with Challenges," 

Justin Smerker earned his PharmD degree in 2009 and his Masters of Science in Pharmacy Business Administration (MSPBA) degree, an executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines, in 2016 from the University of Pittsburgh. He is currently a National Account Manager for PANTHERx Specialty Pharmacy. In this role, Justin conducts RFP submissions, assesses channel strategy, participates in contract negotiations, evaluates the FDA pipeline, and prepares financial models for high cost specialty therapies. His experiences include leadership roles in account management for neurology and rare/orphan disease therapies. He is experienced in the implementation and delivery of high-touch patient care services as well as in clinical management, persistency, and adherence programs. Justin has also participated in the successful launch of newly FDA approved medications. Additionally, he has served as an adjunct clinical instructor for experiential education at Duquesne University. Prior to working in the specialty pharmacy sector, Justin successfully managed high volume retail pharmacies. To connect go to 

https://www.linkedin.com/in/justin-smerker-pharmd-86a950101

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The ability of manufacturers to convey the efficacy and safety of a new biosimilar is crucial.  


Challenges for Launching Biosimilar Products

Patient satisfaction surveys have been a common part of community pharmacy assessments for decades. The surveys have been, and continue to be, used by both chain and independent pharmacies, which aid their organizations in identifying strengths, weaknesses, and opportunities for improvement.

However, specialty pharmacies have not used patient satisfaction surveys for as long as community pharmacies, in part due to the model of care provided and the length of their existence. Yet, a budding trend occurring within the specialty pharmacy industry is a greater emphasis on understanding the patient journey and defining specialty pharmacy excellence. 

The paradigm shift in thinking has led specialty pharmacies on their own journey in an effort to understand the key drivers of patient satisfaction. In order for a survey to be recognized as validated, it should be conducted by an independent third party on behalf of the specialty pharmacy. 

Validated surveys are questionnaires that have undergone rigorous tests to ensure that the questions are posed in the correct manner to measure the desired metrics. Moreover, the data collected from the surveys is appropriately examined using the correct statistical analyses. Failure to use validated surveys may compromise the data collected, lead to inappropriate analyses, and ultimately risk drawing incorrect conclusions.

Certainly there are a number of reasons why specialty pharmacies have chosen to complete validated surveys. First, satisfaction surveys are extremely helpful in assessing pharmacy operations. 

By conducting surveys, specialty pharmacies can garner valuable information, such as how patients perceive their ability to offer financial assistance programs, provide patient counseling, perform routine refills, or provide adequate updates to keep patients informed during the prior authorization process. Additionally, specialty pharmacies can use survey data to determine why patients have chosen to begin using their services or transfer their business to competitors.  

There are a number of reasons why patients may leave their specialty pharmacy, including insurance changes, physician recommendations, or dissatisfaction with the specialty pharmacy’s level of service. Using survey results, specialty pharmacies can even tailor their approach to patient care, based upon disease state or therapy type, to provide the highest quality of care. Arguably, this would be difficult to accomplish without thorough market research.

Second, specialty pharmacies can use the data to meet accreditation standards. Highly regarded accrediting bodies for specialty pharmacies, such as URAC, ACHC, and CPPA, have placed emphasis on patient safety and satisfaction, as well as effective and appropriate patient management. Conducting third party surveys is an important part of maintaining accreditation and the data collected from surveys can serve as a means to document performance.

Moreover, specialty pharmacies can use positive patient satisfaction surveys as strategic marketing material for their business. There are numerous stakeholders in the specialty pharmacy industry who would be interested in the results of satisfaction surveys.  

These include patients, payers, and manufacturers. Patients seek specialty pharmacies that are knowledgeable and can offer quality care for their conditions. With the extremely high expense associated with specialty therapies, payers want to contract with specialty pharmacies that have been able to demonstrate their ability to improve adherence, manage side effects appropriately, and report positive outcomes from pharmacologic therapy. 

Manufacturers want to enter into contracts with specialty pharmacies that will support their patients and be experts in dispensing their products. More specifically, pharmaceutical manufacturers may use patient surveys to facilitate a successful launch of a new product.  

Survey answers may guide patient communication and inform channel strategy. They may direct key decisions for the manufacturer, such as the need for hub services, co-pay card programs, or specific clinical education that should be provided during the initiation of therapy. For existing brands, manufacturers may also use surveys to evaluate their current specialty pharmacy network. 

Using the results, manufacturers could expand or contract a network, educate payers on poorly performing specialty pharmacies, supplement specialty pharmacy scorecards used during quarterly business reviews, or look for ways to improve the overall patient journey. Well-constructed surveys are able to elucidate a specialty pharmacy’s capacity to meet these goals.

Where specialty pharmacies may be able to derive the most value from surveys is through the use of the longitudinal data that they can provide. A snapshot in time of a specialty pharmacy is helpful, but it doesn’t paint the whole picture.  

By analyzing multiple surveys over time, specialty pharmacies can demonstrate improvements in their ability to serve all stakeholders. Specialty pharmacies must continually invest in understanding how they are perceived by patients, payers, manufacturers, and providers.  

In the coming months and years, surveys will become a critical benchmark component for comparing specialty pharmacies as the industry continues to become more competitive. Specialty pharmacies that begin to understand strengths, weaknesses, and opportunities, now can take proactive corrective action and become leaders in the industry.

Satisfaction surveys improve understanding of the patient journey and define specialty pharmacy excellence.


Impact of Patient Satisfaction on Specialty Pharmacy

While the specialty pharmacy industry has grown substantially over the past decade, there are a number of major challenges on the horizon. Future executive leadership in specialty pharmacy will be faced with a number of challenges that will require a unique blend of clinical expertise and business acumen to solve effectively. 

Leadership will be asked to find innovative solutions to a multitude of problems, including increasing competitive intensity, margin pressures, the emergence of integrated delivery health systems as major players in specialty pharmacy, and value-based contracting, among others.   Along with hiring talented and experienced staff, effective leaders will develop plans to position their firms with the competitive advantage necessary to succeed now and in the future. 

Along with the challenges just mentioned, the transition from fee-for-service-based payment models to value-based reimbursement is likely to shape the future of health care, including specialty pharmacy.  The transition in reimbursement structure has been underway for years, being led by CMS in their effort to control health care costs.

By 2018, alternative payment models tied to value based care will account for the majority of all Medicare reimbursement. Almost all payments will focus on condition specific reimbursement or comprehensive population-based payments. 

Similar value-based contracts are now finding applicability in the specialty pharmacy industry.  Increased scrutiny is being placed on ultra high cost therapies, and reimbursement is becoming dependent on pre-defined outcomes metrics. Contracts may be structured so that rewards are provided to pharmaceutical manufacturers for achieving outcomes measures while greater rebates are received for payers if outcomes goals are not met. 

Examples of clinical endpoints include LDL levels, A1C levels, or relapse rates. The selection of appropriate clinical endpoints is paramount to the success of the program. Selection of appropriate endpoints may be difficult depending on the therapy patients are receiving. 

In some cases, it may make sense to capture endpoints similar to what was used in the drug’s pivotal trial that led to FDA approval to prove efficacy.  Unfortunately, there are many times where obtaining trial endpoints during patient therapy is not feasible.

The use of these contracts allows manufacturers to differentiate their product(s) from competitors in the marketplace. If structured correctly, the value-based agreements can be beneficial for both the payer and manufacturer.  In turn for more favorable coverage and tier positioning received by a manufacturer, payers can share risk and potentially be entitled to additional drug discounts based on product efficacy.

However, there are a number of barriers in place to prevent the wide adoption of value-based contracts. First, anti-kickback statutes create uncertainty between manufacturers and payers.  Manufacturers are unsure and reluctant to incentivize payers to encourage adherence.

Second, there is currently a lack of technology that allows manufacturers and payers to communicate effectively during the prior authorization and maintenance process for specialty medications. In order to demonstrate outcomes, manufacturers and health plans need access to large quantities of data. 

Moreover, the data elements required would need to be specific to each type of drug therapy.  Significant amounts of capital and labor would be required to develop and administer the program on an ongoing basis. Furthermore, health plans would have to share data about their members with manufacturers. 

Frequently, there are firewalls in place to prevent a health plan from acquiring patient specific information, and even if they do, the current climate doesn’t foster sharing that information with outside organizations. Even if organizations wanted to, there are a number of HIPAA laws in place that may prevent or complicate the sharing of information.

Value-based contracting offers advantages and challenges for manufacturers and payers. As a key constituent that has more touch points with patients than any other health care provider, specialty pharmacies have an opportunity to provide patient education, impact adherence, drive persistency, and collect data that can be used to demonstrate outcomes related to treatment with specialty drug therapies. 

In the future, specialty pharmacies should focus on providing these services and information to their partners to demonstrate value.  Investing in the development of unique clinical programs, IT infrastructure, and optimizing pharmacy operations processes to capture data during patient onboarding and maintenance will be critical to success.

Darling, Paul.  Transitioning Pharma to Value-Based Payments Will Require More Than Corporate Collaboration.http://info.zsassociates.com/activeingredient/transitioning-pharma-to-value-based-payments-will-require-more-than-corporate-collaborationMarch 1, 2016.  Accessed 12/1/2016.

Justin Smerker earned his PharmD degree in 2009 and his Masters of Science in Pharmacy Business Administration (MSPBA) degree, an executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines, in 2016 from the University of Pittsburgh.

He is currently a National Account Manager for PANTHERx Specialty Pharmacy. In this role, Justin conducts RFP submissions, assesses channel strategy, participates in contract negotiations, evaluates the FDA pipeline, and prepares financial models for high cost specialty therapies. His experiences include leadership roles in account management for neurology and rare/orphan disease therapies. He is experienced in the implementation and delivery of high-touch patient care services as well as in clinical management, persistency, and adherence programs. Justin has also participated in the successful launch of newly FDA approved medications. Additionally, he has served as an adjunct clinical instructor for experiential education at Duquesne University. Prior to working in the specialty pharmacy sector, Justin successfully managed high volume retail pharmacies.   To connect go to 

The transition to value-based reimbursement is likely to shape the future of health care.

Challenges for Value-Based Contracting in Specialty Pharmacy

The specialty pharmacy boom continues to chug along at a brisk clip, with everyone wanting a piece of the action. The attractive high revenues—a hallmark of specialty pharmacy&mdash;has drawn the attention of small, medium, and large organizations alike. Along with high revenues comes the potential for high profits if a specialty pharmacy can manage their costs appropriately. However, we know from a historical prospective that not all specialty pharmacies make it, even in a highly bullish market. It’s an extremely competitive landscape, with little room for error.  The question is, why do specialty pharmacies fail?

In the highly competitive specialty pharmacy market, it can be difficult to key in on who a specialty pharmacy’s competitors are. Obviously, specialty pharmacies frequently compete with each other vying for the chance to fill specialty prescriptions. Too often pharmacies are looking to grow their business across all therapeutic categories, wanting to be everything to everyone.  They want to be the answer for all stakeholders looking for a specialty pharmacy partner.  However, the reality is that not all specialty pharmacies are seeking to grow their business in the same market segment. To be successful, specialty pharmacies must determine focused patient groups they want to provide goods and services to. This may mean that they begin to focus on providing services for hepatitis C, organ transplantation, oral oncology, or other disease states.  Focusing on a few specific niches allows a specialty pharmacy to develop specialized clinical programs for select disease states, offering unrivaled care to their patients. To develop a competitive advantage, specialty pharmacies should look to learn about what similar specialty pharmacies are doing in the space, and develop creative programs and solutions to differentiate themselves. Realizing it is not necessary to copy models established by industry-leading specialty pharmacies to be successful is key to success.

Finding a solution for business challenges, such as streamlining operations and creating efficiencies across departments, is crucial to the success of a specialty pharmacy. As the number of specialty prescriptions filled annually continues to rise, and specialty pharmacies look to find ways to spend more time developing and providing innovative programs to patients, technology will play a pivotal role in operational efficiency. Relying on old technology that doesn’t meet the rapidly-evolving demands of the specialty pharmacy market will cause significant difficulty and competitive disadvantage on behalf of the specialty pharmacy. Along with operational efficiencies, there is a huge emphasis on a specialty pharmacy’s ability to provide data back to manufacturers, hubs, data aggregators, and third party payers in today’s market. Specialty pharmacies frequently struggle to provide these data in an accurate and timely manner to their partners. Continual evaluation of new technologies that are able to capture and report data will increase the chances of a specialty pharmacy performing well in the marketplace.

Social networks have exploded in recent years. The number of networks and organizations engaged has never been greater. Social networks offer opportunities and challenges that must effectively be managed by specialty pharmacies. If specialty pharmacies ignore social networks, they will miss out on chances to learn from their customers. Customer feedback, whether positive or negative, is a gift. The beauty about feedback through social networks is that it can be nearly in real time. Using feedback to improve the practices of the specialty pharmacy is a great way to improve services. Additionally, being active on social media offers an opportunity to engage with patients, prescribers, and others in the industry. It also allows specialty pharmacy to see what competitors and potential partners view as hot button issues.

Perhaps the worst thing any specialty pharmacy can do is overpromise and under-deliver. The rise of limited distribution networks seems to have created a paradox. The concept of creating a distribution network that is limited in nature is to improve the quality of care that patients receive from the therapy. While in many cases this is true, it has created panic and a fear of being excluded from the network on behalf of specialty pharmacies. As a result, specialty pharmacies will overpromise capabilities to consultants and manufacturers as they are developing their channel strategy. When the drug launches, manufacturers and others realize that the specialty pharmacy cannot meet contractual obligations and, in some cases, patients may have therapy delayed. Examples may include a specialty pharmacy’s ability to meet turnaround time or reporting requirements. One negative experience in a failed new venture due to exaggeration of capabilities may be all that is needed to steer clients away in the future. Being forthright about operational, reporting, and other facets of a specialty pharmacy’s capabilities is important to build trust and integrity.  

In order not to fail, specialty pharmacies must focus on developing competitive advantage in a highly competitive market. Knowing who they compete with, investing in technology, being actively involved in social media, as well as not overpromising and under-delivering are all ways to enhance a specialty pharmacy’s chances of success.

Justin Smerker earned his PharmD degree in 2009 and his Masters of Science in Pharmacy Business Administration (MSPBA) degree, an executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines, in 2016 from the University of Pittsburgh. He is currently a National Account Manager for PANTHERx Specialty Pharmacy. In this role, Justin conducts RFP submissions, assesses channel strategy, participates in contract negotiations, evaluates the FDA pipeline, and prepares financial models for high cost specialty therapies. His experiences include leadership roles in account management for neurology and rare/orphan disease therapies. He is experienced in the implementation and delivery of high-touch patient care services as well as in clinical management, persistency, and adherence programs. Justin has also participated in the successful launch of newly FDA approved medications. Additionally, he has served as an adjunct clinical instructor for experiential education at Duquesne University. Prior to working in the specialty pharmacy sector, Justin successfully managed high volume retail pharmacies. To connect, go to 

There is little room for error in the highly competitive specialty pharmacy landscape.
