What's So Special About Specialty Pharmacy

Is the cost of specialty drugs worth the price in small patient populations?

Many graduating pharmacists, pharmacy veterans, physicians, as well as the general public, are asking themselves, what exactly makes specialty pharmacy so special?

This question often leads to several more, including why are these therapies so expensive, and why are specialty drug manufacturers constantly in the media? There is no single answer, but there are a few fundamental properties that almost all specialty medications possess.

Many of these therapies are very complex and have significant side effect profiles, in addition to strict dispensing regulations imposed by manufacturers. The media regularly reminds the public of how expensive these therapies are, and how few patients they treat.

Specialty pharmacy is expected to increase to an estimated $220 billion in annual health care spending by 2020, an increase from an estimated $130 billion for 2016. What the public has not been told is how many drug prototypes fail during development.

These failures add millions of dollars to drug manufacturer expenses that never be recovered. Also, each successful therapy only has a limited number of years of exclusivity before a generic is allowed to erode their profits.

The specialty designation is often decided by a combination of the manufacturers, as well as the payers. Many are considered biotech products, are injectable, require special handling, and have limited distribution networks. Disease categories most often considered specialty include oncology, HIV, rheumatoid arthritis, multiple sclerosis, hepatitis C, and countless rare/orphan diseases. Orphan diseases affect only 500 patients per million, and ultra-orphan diseases only affect 20 patients per million.

The cost associated with these therapies can reach hundreds of thousands of dollars per year per patient. The fundamental question then becomes: how much is too much to spend on such a limited number of patients?

The simple answer is that every person deserves a long and happy life, and if a medication can provide that, then it's worth the cost. Or is it?

Many of these patients suffer from life threating or severely debilitating diseases where many times there is not a cure or hope for recovery. The debate will continue into the near and distant future of whether those funds should be used for the small population of specialty patients, instead of diseases that affect millions.

Most specialty medications are limited to specific distribution networks. These networks can be very broad and encompass most eligible pharmacies, and others can be restricted to a single pharmacy. The manufacturers themselves often regulate the ability for a specialty pharmacy to dispense these medications.

The most accessible medications are considered open network medications, then those get refined to specialty network medications, which further get refined to limited network medications, and ultimately to exclusive network medications.

In each progressively smaller network, manufacturers expect pharmacies to engage their patients in a way that promotes adherence and improves clinical outcomes. Often, these pharmacies are paramount in collecting clinical feedback for the manufacturer because select therapies get expedited approvals. The expedited approvals are often necessary for many of these diseases, because there are no current therapies, or established therapies are ineffective.

The drug manufacturers are only part of the equation; another significant force is the payers. These financial backers often require mandates that reduce inappropriate utilization, ensure therapeutic doses, reduce drug acquisition costs, and determine eligibility for each therapy. This eligibility, often referred to as prior authorization, must include a detailed history of each failed therapy and support why the specialty medication is necessary for the patient's care.

The payers often limit the pharmacies where their patients can receive these medications, which subsequently gave rise to several large specialty pharmacies. The current landscape has four major specialty pharmacies, as well as multiple middle to small specialty pharmacies.

The major players include CVS/Caremark, Walgreens, Accredo, and Diplomat, and their size and buying power cannot be ignored. They often can negotiate heavily with each drug manufacturer, and often are in direct competition with each other.

The engines of these specialty machines are the specialized pharmacists who are employed at each location. The roles of the specialty pharmacists are vital to the operations of each specialty pharmacy. They are the disease experts in each field, and often educate prescribers on proper medication use.

Also, they quarterback the financial assistance that most patients need to pay for these therapies. Finally, they verify each medication before it leaves its respective facilities to ensure patient safety.

The debate over specialty pharmacy medications will continue, as the cost of each therapy increases. The expected increase in overall specialty spending is a growing concern, as awareness for each treatment rises. The ultimate question is whether the cost to increase quality of life or extend life expediency for a few patients is worth the price.

About the Author

Anthony Mazzarese is a graduate of The University of Pittsburgh School of Pharmacy, and is currently enrolled in the Masters 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. He is the Pharmacist-In-Charge at Giant Eagle Specialty Pharmacy. His practice is focused on improving medication compliance and overall wellbeing in the areas of HIV, auto-immune disorders, oncology, and organ transplantation.