nacds SPEAKS OUT: Specialty Pharmaceuticals on the Rise

JANUARY 01, 2007
Robert W. Hannan

We are in a time of transition for community pharmacy as we witness the rise of specialty pharmaceuticals—medications targeted to chronic and/or rare disease states such as cancer, multiple sclerosis, and immunodeficiency disorders—and the need for efficient and cost-saving systems to deliver them. The pipeline of drugs currently under review indicates, by sheer numbers, that growth within the specialty pharmaceutical sector will significantly drive the overall growth of the pharmaceutical market. This productmix shift will impact all stakeholders, including community pharmacy.

Specialty pharmaceuticals represent the fastest growing segment of the prescription drug market in the United States, with a projected 20% annual growth rate. Typically, these products are high cost. It is anticipated that by 2008, the specialty pharmacy component will be >20% of all drug costs, reaching about $73 billion in total dollars. With monthly per patient costs averaging $1000 to $1500, payers (the government, private employers, and managed care organizations) are focusing on ways to effectively manage use of these drugs to realize treatment potential, but at a lowered cost that still ensures patients appropriate access.

Despite the complexities of therapies— which require close supervision and monitoring of the patient, special handling, and administrative processes—as well as the costs, the delivery of specialty pharmaceuticals has migrated toward managed care programs. If community pharmacy does not become an integral component of the specialty pharmaceutical distribution process, these products will continue to move through alternate channels. Community pharmacy must respond or risk losing this market.

Community pharmacy is ideally positioned to care for patients requiring specialty medications, as the patient education component of these therapies is critical to success in treating patients' needs. We need a new paradigm, however, that addresses appropriate ways to manage the handling and service requirements of specialty pharmaceuticals, including dispensing, distribution, reimbursement, case management, and other services specific to patients with rare and/or chronic diseases.

By implementing the specialty pharmacy model, community pharmacy will be able to provide a mechanism to manage the cost of specialty pharmaceuticals for the patient, an opportunity to save money for the payer, and another source of revenue.

To provide a blueprint for this new business model, NACDS has developed a white paper that illustrates how community pharmacy can be best positioned to participate in specialty pharmacy. The paper identifies operational requirements, providing a detailed account of implementation steps a community pharmacy must undertake to succeed in this business.

This is an exciting opportunity with significant upside potential for the profession. Community pharmacy must find ways to become a provider of specialty pharmacy services and an integral link in the overall health care system.

Mr. Hannan is serving as president and chief executive officer of the National Association of Chain Drug Stores.