Where's the Special in Specialty? Has the Increase in the Number of Players Diluted Services?
The growing cost of specialty products places greater importance on the support that patients receive.
THE PAST SEVERAL YEARS HAVE SHOWN that specialty pharmaceuticals have been, and will continue to be, at the epicenter of conversations concerning health care spending and ongoing segment growth. This past year marked a period when despite the slowing in overall drug spending, specialty products continued to expand at a double-digit rate, according to the Express Scripts 2016 Drug Spend Report.
Growth was observed in utilization, product prices, and a pipeline filled with potential new products. The crux of the question and answer lies not in the base of specialty products available, product cost, or volumes, but in what is occurring with the support that patients receive. How are these services accessed and what organizations are delivering them? Are the services “special?” Is there still innovation in this sector or has the increased volume created an environment that is driving commoditization instead of fostering creativity?
It is important to understand where we have come from to view where we are heading. With the growth of high-cost medications that treat patients with disease states not common among the general population, an industry subsegment was born. Although it was not known as “specialty” at this point, in the early 1990s, manufacturers began to recognize the need for a unique distribution channel approach coupled with services that supported patients and physicians in accessing this new class of products.
Originally considered an extension of the distribution channel, drug wholesalers launched companies focused solely on the development of these specific programs. Additional organizations focused on specific disease categories, such as oncology, and provided core support elements, such as benefits investigation, some prior authorization support, and patient assistance programs for indigent patients. From the mid-1990s to the mid-2000s, the industry saw the growth of pharmacies that elected to specialize in these disease states and the patient care tools required to be successful; thus, the specialty segment came to be.
From the early days, manufacturers sought to brand these programs and use them as an extension of their sales, marketing, and supply chain strategies. Programs such as Genentech’s Single Point of Care and Schering’s Commitment to Care became the standards that specialty services were measured against. These programs were built to alleviate barriers to access a single source. The coordination between patients, providers, and payers focused not only on driving the speed to therapy, but on maintaining patients on clinically appropriate therapies.
Distribution channels were not limited by the manufacturers, but were instead streamlined through the creation of limited-distribution networks. High-touch connectivity with patients was facilitated via the hub programs. Through the increase of products utilized by a smaller patient population, pharmacies began to specialize in certain disease states, such as hemophilia, total parenteral nutrition therapies, or cold chain products. Additionally, in terms of the patients they serviced, companies grew from local to regional to national geographies. The focus shifted to aggressively ensuring patient connectivity through high-touch support services, as patients were not restricted to 1 pharmacy by their health care plans.
From the mid-2000s through today, we have seen the market mature. During this time, specialty pharmacy became “special.” Pharmacies were not only ensuring that patients received their product, but also began developing specialization with specific disease states. They fashioned innovative clinical programs with the intention of engaging patients, and retail chains began to create centers of excellence, moving specialty products into a centralized location. The ability to identify as a specialty pharmacy rather than a retail location resulted in an increased valuation for a pharmacy. This environment created not only monetary gains, but also promoted the growth of the number of specialty pharmacies available today.
Support and trade organizations also began to develop, another sign that demonstrates the maturation of the segment. Group purchasing organizations—such as ION and Asembia (formerly Armada)—along with formal trade organizations, including the National Association of Specialty Pharmacy, came into existence to support the industry. Formed in 2004, Asembia has seen its annual conference explode from hosting several hundred to becoming the largest specialty-focused event in the country, with attendance exceeding 5000 at the 2017 Asembia summit.
To demonstrate and formalize the services utilized within the channel, opportunities for certifications—both individuals and companies—began to arise through organizations such as URAC and the National Association of Specialty Pharmacy. One such avenue is through the Specialty Pharmacy Certification Board. Formed in 2012, this organization created core criteria to ensure standardized, consistent objectives are met and that pharmacists that meet these criteria are recognized.
Parallel to this increase in the number of pharmacies that identify themselves as a specialty pharmacy, tools have emerged to further qualify these organizations. Chief among these tools is the accreditation of these companies. URAC specialty pharmacy accreditation experienced rapid growth from only 2 companies in 2008 to nearly 400 locations in 2016, according to a March 2016 industry report by the Drug Channels Institute.
Service Provider Evolution
Companies managing brand-specific, product support programs on behalf of biopharmaceutical manufacturers also experienced tremendous growth. In recent years, there has been a consolidation of companies, both from a roll-up approach (eg, the Lash Group and TheraCom) and with other health care companies (eg, LabCorp and Covance MMS).
The programs have grown from simple operations focused on solving straightforward reimbursement questions to now include various services. Commercial co-pay support and the management of limited distribution networks, sometimes as small as 2 pharmacies, are 2 common examples. As biopharma manufacturers have realized the value these programs provide, there has been a consistent increase in the number of programs in the marketplace.
As we move through this growth period, we find ourselves at a pivotal point. The pipeline of specialty products continues to look very promising. Change is shifting these services from a high-touch model with the focus just on the patient to patient outreach in order to maximize product utilization and drive refills. The unmet needs of patients and physicians must be taken into consideration and addressed as the industry evolves.
The ability to allow a physician to access programs and services with minimal disruption to their normal practice routines is the destination of the market’s evolutionary path. Considering the future, it is imperative that the industry begin to re-focus on ensuring physicians and patients can access products via an effective and efficient path. Both continue to be challenged not only in the navigation of payer requirements, but also in how to access support programs. Which fax number and enrollment form to use? Is it easier to simply send the patient to a specialty pharmacy and hope that the product gets to the patient in a timely manner?
Of equal importance is the need to continue to innovate tools and support services that are tailored and focused on meeting the unique needs of each patient. The high-touch models in the market today have become tactical in nature, with specialty pharmacies and hub service providers reaching out to patients just to make certain a task is completed within a specified time interval. A lack of vision on the longitudinal view of the patient journey resulted in a nonpersonal, high-touch model. A shift to effective, efficient, and coordinated patient interactions will deliver better patient outcomes. All key stakeholders in the broader patient care continuum must be taken into consideration.
The appropriate development and utilization of technology tools will provide the foundation to move in this direction. In addition to patient and physician needs, biopharmaceutical manufacturers will insist on the ability to continue to differentiate programs and brands through these programs. Payers will insist on the ability to demonstrate not only the efficacy of the product, but the value the program has on the overall economics of the patient’s care. The industry must recognize the homogenization that has begun with the growth of the segment and insist on change. We must put the specialty back into specialty pharmacy.