Growing a Specialty Pharmacy Business Represents Opportunity for Today's Pharmacy Operation

Specialty Pharmacy TimesAugust 2012
Volume 3
Issue 4

How to "get into the game" as the health care environment continues to evolve is discussed. The opportunities abound for those willing to jump in.

Specialty Pharmacy's New Frontier: Opportunities and Challenges for Retail

How to "get into the game" as the health care environment continues to evolve is discussed. The opportunities abound for those willing to jump in.

It seems as if every article you read and every conference you attend today projects that biologics are growing at double digits. And as the number, costs, and utilization of specialty drugs continue to rise, you need to be in the “game”’ and can no longer “stand on the sidelines.”

Further data suggest that you will have dramatic increases in inventory, single-digit margins, and special handling requirements. Specialty medications are difficult to manage, present reimbursement challenges, are part of restricted managed care networks, and present distribution challenges—all of which makes it difficult to get into the “game.” But with every opportunity, there are pros and cons.

When I was a pharmacy district manager for Walgreens in the mid-1990s, Vice President Enrique Anglade remarked that as a chameleon changes color within its surrounding environment, we must continue to change/grow our business model as the health care environment changes around us. With specialty pharmacy being the fastest growing component of health care expense and the generic cliff upon us (along with corresponding revenue loss), we can no longer practice in a silo. Just as a chameleon must change, we must change our value proposition to our patients and the overall health care model and grow our top-line revenue.

Likewise, Navarro Health Services (NHS) could no longer sit on the sidelines. After evaluating the opportunity, we decided it was time to take an offensive and defensive approach to provide specialty pharmacy services to better cater to our current base of patients as well as attract a new patient base. Starting a specialty business (which is growing by double digits) will also allow us to expand outside of our “brick and mortar” geographical areas to realize top-line revenue growth.

NHS provides a unique valuable combination—“small company” entrepreneurial spirit and “large company” processes and best practices. Having more than 50 years of retail pharmacy brick and mortar experience within southern Florida allows us to leverage our local brand relationships with pharma, managed care organizations, payers, physicians, and the local community. Understanding the unique complexities of the specialty arena, along with the cultural differences within the diverse communities we serve, allows us to establish a “value proposition” that provides a competitive edge in our marketplace. Additionally, the failure to clinically manage these patients properly to achieve the best possible clinical and financial outcomes may decay one’s credibility and decrease revenue opportunities.

There are several specialty paths, each providing a value proposition including but not limited to Retail, Managed Care, Hospital, Independent, Regional Chain, and others. As a Regional Chain, there were 3 vital pillars that we used to develop and establish the business. These pillars helped make the entry into the specialty game and provided some quick wins. The “TURN” key pillars that we established were: Build your Team, Manage your Relationships, and Develop Network Contracts.


One must build a dedicated multi-disciplinary specialty team consisting of a clinical pharmacist, case manager, care coordinator, contract manager, and sales team. The care coordination focuses on the initial patient assessment, insurance verification, and prior authorization, copay assistance program, delivery of product, adherence, side effect management, and patient outcomes.

The team’s goal is to make sure each patient is:

  • Contacted, and that coordination of benefits is documented and processed
  • Coordinated of shipment/delivery of product
  • Offered drug therapy management counseling
  • Provided patient education about adverse reactions
  • Given overall clinical monitoring
  • Educated about ways to increase adherence
  • Provided a drug utilization review

The specialty pharmacy business must be built around “improving the patients’ lives.” The staff should work to ensure that every new patient receives their medication, even if restricted because of insurance or manufacturer programs in providing the medication from your facility. Continue working with the referral, sending it to the mandated pharmacy, and communicating with the patient, provider, and pharma representative when appropriate.

It’s important to establish a local and national presence, increasing penetration and market share therapies by using service representatives (sales force) through the hiring of experienced specialty representatives.


Developing a good relationship with your local pharma sales representative for the specific disease states you are covering is critical. The sales representative has knowledge of the disease state, extensive physician and health care facility relationships, specialty product pharmacy distribution, patient support programs, and he or she will be able to leverage these existing relationships. They would be key in supporting and working (eg, visiting physician offices together) with your sales force. You have similar interests— improving patient outcomes by improving adherence through the safe dispensing of the prescribed specialty product.

Another vital step for the pharmaceutical companies is having your specialty pharmacy data fully integrated into IMS, providing an added value to your local pharma sales team. The ability to offer data and reporting services through IMS will allow the local pharma sales team and their corporate office to track market share, prescribing habits, adherence, and improved patient care.

Also, managing your physicians through your service representatives and providing added value as part of the health care team is critical. From a physician’s perspective, specialty pharmacies can function as an extension of the office, supporting and managing the patient through managed care prior authorization, copay assistance, and medication therapy management services, all of which free up time for more patients without sacrificing level of care.

Managing and supporting your local disease state community foundations and support groups can provide a resource to give back to the community and inform the groups of the added specialized disease- specific services you offer.


Establishing specialty pharmacy contracts and agreements with payers within the community will help drive additional value both to the managed care organization and to the patient by providing additional patient education, improved adherence, and outcomes. Specialty pharmacies are sensing the pressures from payers through a narrowing of specialty pharmacy networks and other restrictive utilization techniques. Therefore, as payers are faced with significant challenges related to cost and reimbursement issues, clinical management, and outcomes, specialty pharmacies can add value with the expertise and local relationships they bring, and can gain preferred provider status with key regional and local payers.

Once contracts are established and prescription volume is realized, the challenge of profitability while providing competitive pricing and dependable services becomes the measurement of a successful specialty pharmacy program. Due to the high cost of these medications, 1 wasted or rejected claim can wipe out the profits of many successful prescription claims.

Developing relationships with pharma companies to help support specific disease state programs and accessibility to limited/restricted distribution programs are vital to the growth of a specialty pharmacy. Drug manufacturers may limit or restrict the distribution of their product depending on the level of coverage needed and the services required. Based on these criteria, drug manufacturers identify and collect information on all specialty pharmacies that might fit these needs. Programs by specialty pharmacy that focus on patient compliance continue to be in demand by specialty product manufacturers. Ultimately, such an approach will help manufacturers ensure that the specialty pharmacy providers and distributors they select ultimately meet the needs of their organization and optimize product distribution and utilization strategies and tactics.

In essence, the projected revenue growth in the pharmaceutical industry shifting from the traditional brand name drugs to specialty drugs could mean big growth opportunities for players to get into this specialized pharmacy market. Over the next 5 years, the specialty market will continue to evolve and change. Just like the chameleon, we too must change and evolve with the health care environment.

Don’t let the game pass you by. This may not be a good time to be on the sidelines.

Albert Garcia, RPh, MHL, is the executive vice president for Navarro Discount Pharmacies and president of Navarro Health Services overseeing all pharmacy retail operations, specialty business, fulfillment center, and call center. Prior to Navarro Albert spent 23 years with the Walgreen Co. overseeing their pharmacy operations within South Florida. He is a seasoned executive with a successful track record in the pharmaceutical industry that spans 3 decades. He is a third generation pharmacist and has a broad background in both the hospital and retail sectors of the profession. Headquartered in Miami, Navarro Discount Pharmacies was founded in Havana, Cuba in 1940 and opened its first store in the US in 1961. With 31 stores and approximately 1,400 employees in Miami, Navarro is the 14th largest retail drug store (based on volume) and the largest Hispanic-owned drugstore chain in the United States. Albert was appointed by the Florida Governor in 2004 to the Florida Board of Pharmacy and is the current vicechairman. In 2003 he was appointed by the Florida Secretary of Health to the Drug Wholesale Advisory Committee (Pedigree Committee) in which he continues to hold a position. He earned a masters degree in Health Law from Nova Southeastern University Law School where he graduated Summa Cum Laude and a pharmacy degree from the University of Florida.

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