The Challenge of Specialty Pharmacy: Mitigating Costs While Providing Quality Care

Specialty Pharmacy TimesJuly/August 2013
Volume 4
Issue 4

The cost of complex therapies is soaring, and the challenge is to deliver access to these medications in the most cost-effective and clinically appropriate site of service.

The cost of complex therapies is soaring, and the challenge is to deliver access to these medications in the most cost-effective and clinically appropriate site of service.

From cancer and immune disorders to viral infections and infertility, specialty pharmacy is booming as the number of complex therapies for a range of diseases and conditions continues to grow. These medications often serve an unmet need—saving lives and providing significant improvement in quality of life.

While the clinical developments truly are remarkable, specialty medications are extremely expensive, costing an average of more than $3000 for a 30-day prescription—with some costing more than $300,000 per year.1 By next year, 7 of the top 10 medications by sales dollars will be specialty.2,3

As a result, costs to payers for these complex therapies are soaring, despite the low prevalence of many of these diseases. For example, out of a sample size of 10,000 commercial health plan members, only an average of 8 or 9 typically receive infusions of Remicade (infliximab), a drug treating certain chronic inflammatory conditions in certain circumstances.1,4 But because Remicade, like virtually all specialty drugs, is expensive, covering even a few patients who receive it can have a significant financial effect on a health plan or self-insured employer.5

The challenge is to deliver access to medications at the most cost-effective and most clinically appropriate site of service. Certain specialty pharmacies offer a number of programs that not only mitigate costs, but help to optimize care with a goal of driving out potential waste related to specialty drug use. Because of the high-cost nature of specialty drugs, even 1 missed opportunity to reduce waste can have a material financial impact on the patient and payer. Opportunities to minimize specialty pharmacy waste include clinical programs that help improve medication adherence (paying for a drug a patient doesn’t take correctly is a significant form of waste); utilization management programs that help minimize cost and ensure patients are taking the right medication at the right dosage; and site-of-care optimization programs that allow patients to receive specialty infusion therapy at home (or another location) at a cost that may be far less than the cost in a hospital outpatient setting, while benefitting from better quality of life.

These programs call attention to the benefits of focusing on individual patient management. Even though many of the diseases treated by these specialty medications are low prevalence, using 1 of these cost interventions for a single patient can result in significant cost savings—translating to more dollars available to pay for the treatment of other patients. Conversely, not employing these programs increases the financial burden of already costly therapies because those costs will otherwise continue to grow at an excessive rate. By mitigating the costs, these programs ultimately can help prevent the specialty trend from becoming unsustainable.

Medication adherence programs have long been recognized for their role in helping to ensure that patients take their medications correctly and as prescribed. This not only enables them to achieve the maximum clinical benefit from the therapy, it also results in decreasing the costs associated with disease progression. Many specialty pharmacies feature medication adherence programs that help maximize clinical outcomes and control costs, led by specially trained pharmacists, nurses, and technicians who provide ongoing patient support, helping them manage side effects and understand the importance of adhering to their therapy.5-7

Less well recognized are utilization management and site-of-care optimization programs, which also decrease costs while improving care.


Utilization management programs—including dose-level monitoring, dose-frequency monitoring, formulary compliance, and waste minimization programs—can help reduce the cost to treat patients by increasing the likelihood that they are taking the correct medication at the most appropriate dose for the right length of time. Specialty pharmacy utilization management programs involve taking a close look at each patient.

For example, Stelara (ustekinumab), a treatment for adult psoriasis, comes in 45-mg and 90-mg doses.8 The average wholesale price of the lower dose is $31,000 annually and the higher dose is $62,000 annually.9 While Stelara’s prescribing information indicates that patients who weigh less than 220 pounds be prescribed the lower dose, Walgreens pharmacists have found that physicians occasionally prescribe the higher dose for patients below that weight threshold.1,8 Through the utilization management program, Walgreens’ clinicians communicate with the physician to allow the physician to reconsider whether the lower dose should be prescribed for those patients, potentially cutting the cost of treating that patient in half while maintaining a regimen consistent with the drug’s prescribing information.

Another example is Incivek (telaprevir), a treatment for adults with genotype 1 chronic hepatitis C in combination with certain other drugs.10 The prescribing information indicates that the Incivek treatment should continue for up to 12 weeks as part of a therapy regimen with peginterferon and ribavirin.10 However, sometimes physicians write a prescription for Incivek with “3 refills.”1,10 Filling all 4 prescriptions would result in 16 weeks of therapy at a drug cost for Incivek based on average wholesale price of $96,753 versus $72,565 for 12 weeks of therapy.5 Through Walgreens’ utilization management program, clinical staff communicate with the prescriber regarding when the patient should appropriately stop Incivek therapy. This may prevent the patient from refilling Incivek for the third time and taking therapy longer than required as well as save $24,188 of Incivek cost per unnecessary month of therapy.

Other medications are offered in a variety of strengths. Walgreens works closely with physicians as members of a patient’s health care team to discuss the prescription of a higher strength, when appropriate, rather than prescribing the lower strength and directing the patient to take 2 or 3 of those pills to equal the appropriate dose—a move that can be less cost-effective for many specialty medications. Walgreens also works closely with payers to uncover any opportunity for them to modify their prior authorization or other coverage criteria to better recognize these cost-savings opportunities as part of their coverage determination process.

Walgreens’ "split-fill" program is another utilization management program that can help reduce medication waste and cost. (See Specialty Pharmacy Times, May/June 2013, “Walgreens Split-Fill Case Study: Preventing Waste Through Extension of a Cost-Saving Program” online.) The program includes patients who are prescribed certain oral medications that have a high drop-off rate, typically due to the significant side effects of these medications or due to discontinuation associated with circumstances related to the disease itself. The split-fill program helps prevent medication waste by providing a half-month’s worth of the medication at a time, rather than a full month.6,7 If a patient stops taking the medication before the monthly supply is depleted, the medication for the second half of the month is not wasted, as it would be were a full month of medication prescribed. If the patient tolerates and is able to continue with the therapy, the remaining half-month of the prescription is filled.


Infused therapies make up approximately one-third of specialty medications and are increasingly being provided in a hospital outpatient department (HOPD).1,11,12 Yet many of the same infusion therapies can be provided at an alternative treatment site (ATS), such as in the home or at an infusion pharmacy, where it may be significantly less costly and can offer the patient a more convenient location for service.12 A Walgreens analysis of more than 5 million commercially managed lives over a 3-year period found that by choosing an ATS, health plans can benefit from savings of 20% to 60% in average cost per infusion.1,13

Consider a patient receiving 32 grams of immune globulin every 3 to 4 weeks. The estimated cost based on average wholesale price for 15 infusions a year at the average HOPD would be $84,315 versus $49,150 for home infusion, a savings of more than $35,000.14 Based on Walgreens’ data, 7 500-mg Remicade infusions cost $38,850 a year at the average HOPD versus $24,500 a year at an ATS, a cost savings of $14,350 a year.15 Additional benefits may include improved quality of life, particularly if the patient is treated at home in the comfort of familiar surroundings.

One other consideration is to focus not just on the average HOPD cost, but recognize that costs vary widely by hospital, with some hospitals priced 2 to 3 times higher for the same medication versus an ATS.1 These particular situations can provide substantial savings opportunities through just a few successful interventions.

Ideally, all stakeholders in the industry—physicians, pharmacies, payers, and patients alike—should share the same objectives related to specialty pharmacy: eliminate financial waste and maximize the clinical outcomes of patients in an operationally efficient manner. Adherence, utilization management, and site-of-care optimization programs illustrate avenues for reducing the costs of therapy while maintaining or improving care patient by patient.


  • Walgreens internal data on file.
  • Walgreens Specialty Pharmacy state of the industry report. Walgreens Health. Published 2009. Retrieved May 23, 2013
  • Host K. What lies ahead for specialty pharmacy? Benefitspro; March 19, 2012. Retrieved May 23, 2013.
  • Remicade [prescribing information]. Horsham, PA: Janssen Biotech, Inc.
  • Einodshofer M, Kansler S. Cost management through care management: a perspective on choosing the right specialty pharmacy partner: part 1. Am Health Drug Benefits. 2012;301-304.
  • Khandelwal N, Duncan I, Ahmed T, Rubinstein E, Pegus C. Impact of clinical oral chemotherapy program on wastage and hospitalizations. J Oncol Pract. 2011;7(3 suppl):e25s-e29s.
  • Miller R, Ellis M. Walgreens split-fill case study: preventing waste through extension of a cost-saving program. Specialty Pharm Times. 2013;4(3):18-19.
  • Stelara [prescribing information]. Horsham, PA: Janssen Biotech, Inc.
  • Medi-Span Price Rx. Wolters Kluwer Health. Retrieved May 23, 2013.
  • Incivek [prescribing information]. Cambridge, MA: Vertex Pharmaceuticals Incorportated.
  • Milliman Specialty Medical Drug 2010 Commercial Benchmark Study, November 26, 2012. Retrieved June 3, 2013.
  • Einodshofer M. Cost management through care management: part 2: the importance of managing specialty drug utilization in the medical benefit. Amer Health Drug Benefits. 2012;359-364.
  • Einodshofer M. A plan for medical specialty medications — increase member access, affordability and outcomes while decreasing plan costs. Presented at 2012 Pharmacy Benefit Management Institute Annual Drug Benefit Conference, February 22-24, 2012; Scottsdale, AZ.
  • Einodshofer M. Immune globulin model for success in the specialty pharmacy. Presented at the Armada Specialty Pharmacy Summit, May 7-10, 2013; Las Vegas, NV.
  • Pharmacy Benefit Management 2013 Annual Report. Accessed June 12, 2013.

About the Authors

Michael Einodshofer, RPh, MBA, is the director of utilization management at Walgreens Specialty Pharmacy in Pennsylvania. He is an adjunct instructor in pharmaceutical sciences at the University of Pittsburgh School of Pharmacy and a member of the peer review panel of American Health & Drug Benefits. Prior to joining Walgreens, he served as director of pharmacy operations at University of Pittsburgh Medical Center Health Plan Insurance Services Division. He has received the University of Pittsburgh Medical Center Health System ACES Award for Commitment and Excellence in Service and Six Sigma Green Belt Certification. Einodshofer earned his bachelor of science in pharmacy and his master of business administration from the University of Pittsburgh.Mike Ellis, BSPharm, is corporate vice president, specialty pharmacy and infusion for Walgreens Specialty Pharmacy. Before joining Walgreens in October 2011, he served as the senior vice president of specialty trade relations and contracting and pharmaceutical services for CVS Caremark. His more than 29 years of experience covers both the specialty pharmacy and infusion services industries in senior positions with companies including AdvancePCS, Olsten Health Services, Caremark, CVS, and Quantum Health Resources. Ellis is a licensed pharmacist and earned his bachelor of science in pharmacy from the University of Arkansas, College of Pharmacy.

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