There is little room for error in the highly competitive specialty pharmacy landscape.
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—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?
1. Focusing on the wrong competitors
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.
2. Clinging to old technology
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.
3. Ignoring social networks
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.
4. Overpromising and under-delivering
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.
About the Author
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.