Special Specialty Pharmacies: Differentiation from Competition
Remaining special in the specialty pharmacy space requires innovation.
Specialty pharmacy providers (SPPs) initially emerged from the storm of traditional pharmacy channels. Pioneering firms, such as Stadtlanders, through clinical services and expertise, blossomed as unique, one-of-a-kind snowflakes.
These few flurries have been supplanted by a massive blizzard, as an estimated 200 facilities (at time of this writing) maintain active specialty pharmacy accreditation from URAC.1 With so many entities vying to be special, functioning as a truly special provider requires a great deal more than simply obtaining a license and opening the doors.
While it was originally enough to differentiate SPPs, accreditation is now a requirement to be considered for most specialty pharmacy contracts. In fact, many specialty pharmacies now collect accreditation like kids collect Pokemon in an effort to distinguish themselves from pharmacies without multiple endorsements. Regardless of the accrediting body, the standards measured in the process represent the minimal requirements for SPPs.
These standards vary from organization to organization, but are intertwined by a few common threads. First and foremost, SPPs must demonstrate the ability to provide consistent and reliable patient care. This includes all aspects of the pharmacy’s core business services, including customer service, therapy management, operations, clinical management, and data collection and reporting.
With the exception of some established and accepted best practices, SPPs are free to develop and implement their own policies and procedures to satisfy these requirements.
Accountability, the second aspect of accreditation, serves to validate the means of SPPs for providing optimal patient care. Essentially, the specialty pharmacy is free to provide care as it sees fit.
The accrediting body evaluates the effectiveness of these programs, and ensures the SPP follows through on its promises. This is a drastic oversimplification, as anyone who has gone through the process will certainly proclaim.
However, the core services described above are no longer enough to make a provider special, and additional programs, services, and capabilities must be explored to maintain a competitive advantage.
The Next Level
With every specialty pharmacy now providing services that were once extraordinary, SPPs must continue their evolution to maintain a value-added proposition. Just as a specialty pharmacy from 20 or 30 years ago was a unique snowflake, measures must be undertaken to stand out from the storm.
SPPs can revert to their origins and dedicate their services to the clinically underserved: patients with rare and ultra-rare disease states. This approach has been undertaken by pharmacies such as PANTHERx and UCB, which provide high touch services along with limited or exclusively distributed drug therapies.
Shifting the focus to the broader specialty market, innovation and initiative will be paramount to separating SPPs in terms of perceived quality and ability. Consider this hypothetical scenario with PCSK9 inhibitors, willfully suspending disbelief for the sake of the exercise.
In this utopia, or dystopia depending on the stakeholder, additional clinical data emerges to establish these products as the standard of care. These products obtain top formulary status and are exclusively distributed through an open specialty channel.
What can a given SPP do differently than its 200 competitors to justify greater referrals? These rivals are already executing similar core services: physician outreach, adherence support and patient counseling, among other services.
Would it be beneficial to collect substantially more robust clinical information for each patient on service? Obtaining monthly measures utilized in the Framingham Risk Assessment2 could prove invaluable to certain stakeholders.
Similarly, counseling patients on exercise, healthy diet, and smoking cessation may galvanize a pharmacy’s reputation as a clinical juggernaut. However, these services all would incur some degree of additional cost. With a finite amount of available resources, careful strategic planning must predate any enhanced clinical program to evaluate the global impact of such an undertaking on the business as a whole.
Constructing a portfolio of enhanced services must be done cautiously, yet aggressively. Evolving to market demand is essential to selection of the right projects. Selected endeavors should also be revenue neutral at fair market value, at a minimum. Walking this tightrope becomes even more daunting when considering the need to be aggressively forward-thinking.
Referring back to the PCSK9 example: what if reimbursement more rapidly shifts towards outcomes-based payments? The progressive SPP that found a partner in Silicon Valley to develop a smartphone-based, disposable Cholestech-type device could almost instantly dominate the distribution landscape. This kind of technological investment is inherently risky, requiring substantial time and financial investment for an idea that may never be realized.
Innovation or Obsolescence
As specialty products begin development for widespread chronic conditions, immense opportunities will continue to emerge in serving the patients and prescribers associated with these therapies. The ability to innovate and build novel services creates a self-perpetuating reaction.
SPPs on the forefront of new technologies and services will generate revenue and goodwill through these offerings, which will fuel future development and opportunities from each subsequent success. To ignore such opportunities not only establishes a competitive disadvantage, it paves the road leading away from industry relevance.
About the Author
Christopher Ogurchak earned his PharmD degree from the Duquesne University in 2011. Ogurchak served as a pharmacy manager at an independent pharmacy in Southwestern Pennsylvania before transitioning to CVS Specialty Pharmacy as a clinical pharmacist. He is currently enrolled in the Master of Science in Pharmacy Business Administration (MSPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines.