Specialty pharmacy services are the fastest growing segment of the pharmaceutical market in the U.S. With industry projections tracked at a 20percent growth rate per year, and specialty drugs accounting for 28 percent of the pharmacy industry’s prescription dispensing revenues, they’re showing no sign of slowing down.
However, we all know that every positive comes with a downside, and specialty pharmacy is no different. For example, even though specialty pharmacy is growing — rapidly, specialty drugs and products which are used to treat chronic and/or complex conditions and diseases, are high-cost, and can be administered through any number of ways including infusion, infusion inhalation, injection, and orally. Further, most of these therapies require close monitoring of the patient, their medication adherence, expected outcomes, and — of course — the administrative processes that go along with these high-maintenance drugs. These challenges can appear daunting, but they don’t have to be.
In fact, all this means is that it takes a strong sense of responsibility, confidence, and an unquestionable diligence and attention to detail, for independent pharmacies to take on the goal of branching into specialty pharmacy and increasing their revenue. And, bonus: by doing so, the adoption of specialty pharmacy services into community pharmacies will help demonstrate the independent pharmacy’s commitment to providing top-tier services to their customers, while also securing their role as a health care provider in their communities.
Every time a company makes a strategic change, despite their product scope, there are growing pains. When it comes to specialty pharmacy, there are a significant amount of factors for independent pharmacies to consider before moving into this field. Some of those factors include:
- Managing the switch from traditional generic drugs to specialty based drugs and finding the right balance of the two
- Narrow industry markets and Pharmacy Benefit Manager/Payer competition for those markets
- Retail advantages
Checks and Balances
Traditionally, community and independent pharmacies have provided a service that is a one-time event with very little follow up or management required. Specialty medications, on the other hand, are demand proactive, ongoing management and attention to ensure appropriate utilization, medication adherence, improved outcomes, and appropriate care.
The first step is to recognize the key differences between the two platforms. Below is a table that outlines some of the key distinctions between the management of specialty based medications and independent based medications (2):
As long an independent pharmacy is ready to strike a balance between traditional and specialty medicine by continuing to provide basic prescription fulfillment, along with stepping up their game and providing the additional core management services expected with specialty drugs, then they are one step closer to being specialty pharmacy ready.
Chain stores and Pharmacy Benefit Managers (PBMs) present real (and often) strong competition for independent pharmacies on even a traditional level of service, but when it comes to specialty, that competition grows.
More and more, the pharmacy market is launching specialty drugs into narrow networks — sometimes benefiting as few as 25 pharmacies (3). But this doesn’t mean there isn’t a slot open for independent pharmacies. Finding a niche that your organization can provide is one way of doing just that. Another option is to work with smaller groups, such as counties and smaller payers, who still appreciate the customer-focused approach of an independent pharmacy.
It’s been written before, but it bears repeating — the advantages retail and chain stores have over independent pharmacies, in sheer volume alone, is hobbled by the one-on-one, customer-centric relationships built between a smaller community pharmacy and its customers.
Little touches to patient experiences can seem as innocuous as remembering a customer’s name, or that their child had the flu the month before and asking after them, or taking a moment to come out from behind the counter to talk about a new medication the customer is prescribed. These are the cornerstone, personal touches provided by independent pharmacies that will always hold a powerful advantage over their competition — no matter its size.
Now, generics are trending downward while specialty drugs are trending upward. So, it’s not difficult to understand the eagerness of smaller, independent pharmacies as they focus on a subset of specialty pharmacy that can (and will) deliver significant value to their communities, while continuing to provide access to traditional treatments and generic medications. But the pharmaceutical market is mercurial, and these trends could —ultimately — pivot on a moment’s notice.
Grabbing a piece of the specialty market makes good business sense as long as you understand your pharmacy’s position in the community, have a good grasp on the amount of medication management expected out of a specialty pharmacy, perform due diligence on the market and any niche advantages you can fill.
Has your pharmacy branched out into the specialty arena? How has the evolution affected — positively or negatively — your pharmacy’s standing in the community? We’d love to know and may even share those experiences in future blog posts, white papers, and e-books. If you’d like to add your experience, please contact email@example.com.
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