Reimagining Specialty Pharmacy: Market Variability Drives New Strategies
A common theme during this yearâ€™s summit was the uncertainty about the profitability of the existing specialty pharmaceutical model.
Now in its 15th year and drawing thousands of industry executives and key decision makers from across the specialty pharmaceutical channel, Asembia’s Specialty Pharmacy Summit continues to help define the specialty marketplace and accelerate its growth. This year, the summit welcomed more than 6500 attendees from pharmacies, health systems, pharmaceutical and biotechnology manufacturers, wholesalers, pharmacy benefit managers, health plans, industry consultants, and other stakeholders—all seeking to understand the future of specialty pharmacy.
Reflecting on this major event, from the valuable educational sessions and business seminars provided by key industry experts to the insights gleaned from hundreds of meetings, we are able to distill several key takeaways that can help formulate forward-thinking business strategies and improve patient outcomes. A common theme during this year’s summit was the uncertainty about the profitability of the existing specialty pharmaceutical model. Factors driving this appear on all sides of the specialty pharmaceutical channel. For example, increasing regulations to enhance price transparency are altering reimbursement formulas.
“We’re in a much different world now,” noted former FDA Commissioner Scott Gottlieb, MD, during his keynote address at the general session, “where there’s not just multisource drugs and biosimilars but also therapeutic interchangeability. “We have to think long term about how we move the entire scheme into a competitively big system, such as [Medicare] Part D, and get it out from government adjudicated pricing altogether to really start to take advantage of multisource, biosimilar, and therapeutically interchangeable competition,” he said.
As these changes take shape, pharmacies are struggling to predict how to best support the evolving reimbursement framework from a financial perspective. On the other end of the spectrum, pharmacies are also facing changing wholesaler and specialty distributor acquisition cost pricing models.
Specialty pharmacy stakeholders are implementing various strategies to manage this cross-channel variability. With the emergence of new treatments, such as chimeric antigen receptor T-cell therapies, which require an increasingly personalized treatment model, some providers are responding by developing highly specialized capabilities. For example, in his engaging presentation “DELIVERxING Hope to Patients With Rare Diseases: Improving Orphan/Precision Medicine Channels,” Gordon J. Vanscoy, PharmD, MBA, CACP, chairman and CEO of PANTHERx Specialty Pharmacy, noted that 42% of drug approvals in 2018 were for personalized medicines. This percentage is expected to grow in the years that follow.
At the same time, predictive biomarkers are helping to determine how specific medications will function in individuals. As a result, we have seen predictive biomarkers become increasingly common for new drug approvals. During her general session commentary, Maria Shriver, journalist and founder of the Women’s Alzheimer’s Movement, touched on the potential implications of this information.
“Women are getting doses for their medication that have been tested on men,” Shriver said. “The future really would be a child dose, a male dose, and a female dose. I shouldn’t be taking the same dosage or medication as [a man] because my system is different.”
Gottlieb advised summit attendees that new payment models will be needed to support these emerging therapies. “Gene therapy, cell-based regenerative medicine, digital health, targeted medicine, and some of the new analytical tools, like next-generation sequencing and artificial intelligence, are all really transformative modalities to try to get more beneficial innovation to patients,” he said. “Each requires us to rethink the regulatory paradigm.”
For example, Gottlieb continued, “when it came to targeted medicine, [the FDA] faced the real opportunity that disease was no longer defined by phenotype but now by genotype.”
This is a critical example of what transformative pharmaceutical care has and will become.
In addition to this transition to precision medicine, specialty pharmacies may also face barriers to accessing new treatments. In his joint presentation “Specialty Pharmacy Industry Outlook: What’s Next?” Doug Long, MBA, vice president of industry relations at IQVIA, reported that a record 49% of new product launches in 2018 were of orphan drugs.
With many products launching as limiteddistribution drugs, pharmacies are left with uncertainty about their access to these new therapies. Even after choosing to focus on a therapeutic area and gaining access to limited-access medications, specialty pharmacies must also determine whether to target capabilities to an even more specific niche to effectively navigate an increasingly competitive market.
Paula Bickley, vice president of market access for biologics at McKesson, suggested that independent specialty pharmacies can remain relevant in a vertically integrated world by delivering unique value. By identifying and refining core competencies, she proposed, these pharmacies can reposition themselves as centers of excellence in specific, key areas of practice. “Super specialization” is indeed one way to navigate the market, but exiting from unreliable revenue streams is another. “[Some of the larger independent pharmacies] are not afraid to exit unprofitable therapeutic categories and reject contracts with subpar reimbursement,” wrote Adam Fein, PhD, CEO of Drug Channels Institute, in a blog post on the Asembia summit (https://www.drugchannels.net/2019/05/the-state-of-specialty-pharmacy-2019.html ). “These savvy specialty pharmacies are successfully marketing their businesses’ capabilities and services to regional payers and health plans.”
In line with these strategies, some of the vertical integration we have seen in the past few years has been aimed at gaining specialized expertise. Increasingly, parent organizations are allowing acquired specialty arms to run independently as centers of excellence, as opposed to rolling the businesses up within the larger organization.
The focused approach of Asembia’s Specialty Pharmacy Summit brings all the players within the specialty space together so that, collectively, we can help shape the marketplace, investigate its challenges, and generate solutions. In addition, Asembia’s core business centers on working with specialty pharmacies, pharmaceutical and biotechnology manufacturers, prescribers, payers, and other stakeholders to develop solutions for the specialty pharmaceutical service model.
With market variability forcing organizations across the industry to reinvent existing practice and reimbursement models for specialty pharmacy in order to sustain profitability, gain access, and remain relevant, each of the trends highlighted above should help formulate organizational responses to the ever-changing market dynamics of specialty pharmacy.