Positioning for Change: Staying in Business
As generic drugs become more common, the market for specialty drugs is likely to grow, creating challenges for community pharmacy.
A presentation that I look forward to at national pharmacy meetings is IMS Health Vice President, Industry Relations Doug Long’s presentations on the current drug marketplace. One point he made in his presentation at this year’s NACDS Total Store Expo this week was the fact that over the next few years generics would likely grow to 86% to 87% of prescriptions, at which point they would plateau. One factor behind this is Crestor (rosuvastatin), the cholesterol drug made by AstraZeneca. With 2012 sales of $5.1 billion, Crestor is the third top-selling drug in the United States, according to IMS. But after it comes off patent in 2016, there won’t be any other significant primary care drugs coming off patent.
This means generics companies will have to focus more on biologics. The market for specialty drugs — most of which are biologics — is likely to grow and account for about 30% of the market in the next few years. Indeed, specialty is already dominant in the development of new medications.
Here’s my take-away for this observation and the challenge I see for community pharmacy. There will be fewer and fewer opportunities to make money from switching patients from brand to generics, so using dispensing as your primary income stream will become tighter and tighter.
Specialty drugs will become dominant players, but these products often will be controlled through limited distribution channels.
If dispensing drugs becomes a commodity business how will you earn a living in community pharmacy 5 years from now? If it does not include helping patient’s manage their drug therapy outcomes will you even be in business? OK, maybe the change won’t come quite that quickly but it is really happening. I hope you are positioning yourself and your pharmacy for a change in the way you do business.