What Will Drive the Specialty Pharmacy Models of Tomorrow?
Current trends in the marketplace dictate new approaches and analyses.
Randell J. Correia, PharmD
There’s a tsunami of specialty pharmaceuticals headed our way. It is estimated that approximately 57 million working age Americans live with diabetes, asthma, rheumatoid arthritis, cancer, HIV, and other serious diseases.1 Many of these people are able to continue working and be productive members of their communities due, in large part, to the introduction of these highly effective specialty pharmaceuticals.
For the first time since the pharmacy industry began tracking such things, the consensus forecast is that by 2014 the top-selling drugs by revenue in the United States will move from so-called “small molecule oral solids” to larger molecule injectable specialty medications, including several new oncology products.
For example, the consensus forecast for 2010 sales is:
1. Lipitor (cholesterol)* $11.7 billion Pfizer
2. Plavix (anti-clot)* $9.6 billion Sanofi/Bristol
3. Advair (asthma/COPD) $9 billion GlaxoSmithKline
*Moving off patent
In comparison, the top 3 pharmaceuticals in 2014 will be specialty or oncology drugs—forecasted to represent $25.4 billion in sales:2
1. Avastin (cancer) $8.9 billion Roche
2. Humira (arthritis) $8.5 billion Abbott
3. Enbrel (arthritis) $8 billion Pfizer/Amgen
While the definition of specialty continues to evolve, most classifications include nearly 400 different drugs across 25 therapeutic categories. Specialty pharmaceuticals now represent more than 25% of the total drug spend, with estimates that this will climb to more than 40% by 2030. In such an environment, where the pipeline is filling up with specialty drugs, it will be even more challenging to ensure that payers, employers, and their members receive affordable, clinically sound treatment options.
Adding the 12-year exclusivity for biologics in the new Patient Protection and Affordable Care Act only heightens the importance of thoughtfully addressing the delivery and clinical management components for these often highly effective, yet most expensive prescription medications.
The cost of a biologic agent for just one patient averages between $1000 and $1500 per month,3 with certain treatments vastly exceeding these averages. Despite the cost challenges, the substantial demand by patients and the push for new discoveries by drug companies will drive increasing utilization of these treatments. Thus, employers’ health plans and government stakeholders must explore new methods to control the cost/benefit equation of these drugs and therapeutic regimens. While costly, their value must not be underestimated. Specialty drugs can improve clinical outcomes, productivity, and quality of life for millions of patients with chronic illnesses.
Meaningful Total Health Outcome Analytics
While cost-effective treatments and regimens have always been the stated goal of any payer or health care provider, these new drugs bring increasing attention to the overriding desire to control health care costs while providing optimal outcomes, particularly in the post—health reform era. It is currently the payers and most recently the FDA— through Risk Evaluation and Mitigation Strategies (REMS) controls over pharmaceutical manufacturers—that are driving the requirements of products and services included in the specialty pharmacy sector.
These distinct stakeholders are the catalysts for new and enhanced specialty pharmacy services. Such services are employed to maximize the value of medications to patients who need them, with an eye toward meaningful total health outcome analytics not widely or sufficiently available today.
While exceptions do exist across the pharmacy industry, payers are increasingly viewing most traditional pharmaceutical delivery systems as being challenged by the rapidly shifting dynamics associated with specialty pharmaceuticals. Payers will continue to establish requirements and influence business models that can achieve the total health outcomes and costs controls that must be achieved. To date, selected models have included open and limited networks, partnerships, management agreements, payer in-sourcing, and variations of these.
The Best-Fit Model
One size may not fit all, and the best-fit model will depend on a complex set of factors, including a fair amount of trial and error over time. However, the current trend is for payers to move away from the traditional community pharmacy networks in search of systems that can better achieve the overarching goals. Likewise, pharmaceutical manufacturers driven by REMS requirements and the need to have better controls over their products and related services are narrowing their contacting networks.
With these forces coming to bear, what are some of the differentiated aspects of a sophisticated specialty pharmacy that will drive the business models of tomorrow?
As a baseline, traditional, efficient delivery systems with high-quality service to consumers and payers at competitive prices are and will be mere “table stakes” when competing in the specialty sector.
The new differentiators include:
• “High touch” proactive care management systems; sophisticated data collection, reporting and analytics; and effective and evidence-based adherence and persistency programs along with protocol driven clinical management programs, to name but a few.
• The ability to address and solve for the differences in pharmacy versus medical drug benefits relative to provider networks, reimbursement, and regulatory requirements.
• Participation in REMS programs and associated pharmaceutical company service agreements.
These and other aspects of specialty pharmaceuticals have resulted in new business and pharmaceutical care models that exist today, with further evolution and change expected going forward. The ultimate goal is an integrated system of evidence-based total health outcomes where rational and timely product and service decisions can be made. Only systems that can contribute to this goal will be able to participate in the future.
While this exciting and rapidly evolving segment of pharmaceutical care offers great opportunity for the pharmacy services industry, all participants will be significantly challenged by the dynamics driving the specialty business models of tomorrow.
1. Center for Studying Health System Change. 2003 community tracking study household survey.
2. Reuters. Factbox—world’s top-selling drugs in 2014 vs 2010. Available at: www.reuters.com/article/idUSLDE63C0BC20100413.
3. Pharmaceutical Care Management Association. How pharmacy benefit managers help employers provide safer, more affordable prescription drug benefits. Available at: www.pcmanet.org/assets/2008-03-25_Research_How%20PBMs%20Help%20Employers.pdf.
About the Author
Dr. Correia is Senior Vice President of Mail Service and Specialty Pharmacy of Prescription Solutions, one of the nation’s largest pharmacy benefit management companies and a unit of UnitedHealth Group. “RJ” has 29 years’ experience in pharmacy enterprises and serves as a governing board member of the University of the Pacific School of Pharmacy Entrepreneurial and Innovation program and for the Pharmaceutical Care Management Association (PCMA) specialty pharmacy council. He joins Specialty Pharmacy Times as an Editorial Board member with this inaugural issue.