Increasingly today, healthcare delivery is shifting from physician prescribed decision-making towards patient-centered care. The recent healthcare reform bill has further laid the foundation of patient-centricity into everyday practice (e.g. accountable care organizations, patient centered medical homes). In a 2013 survey of 102 health plans, over 60% of payers have listed improving quality of patient care and patient management as a key strategy in the coming year. Retail pharmacies such as Walgreens have realized the impersonal nature of filling scripts at the local pharmacy and recently rolled out more patient-friendly counseling centers where patients can speak to pharmacist in privacy. But of all the transformations, none other than the Specialty Pharmacy has answered the calling to revolutionize patient-centric care so utterly.
The 2012 Genentech Oncology Trend Report indicates that over 90% of Specialty Pharmacies have implemented or plan to implement patient-focused services, including enhanced caregiver support, new mobile device applications, such as texting-based compliance program, one-on-one counseling, and increased outpatient drug administration support. This is in addition to patient support services that are already offered in support of compliance and adherence, communication to patients, etc. With specialty drug spend on a tremendous uptick of double digits growth over the last few years, representing roughly 17% of total pharmaceutical revenues, the Specialty Pharmacy is in a unique and unprecedented position to shape and evolve healthcare delivery.
For the pharmaceutical manufacturer, the momentum for patient-centric care is certainly there. The challenge, however, is to harness that momentum and leverage the other players in the healthcare ecosystem to deliver a seamless and cohesive product to patient experience. This article hopes to shed some light, even if dim, on the potentials of Specialty Pharmacy in delivering patient-centric care and how the pharmaceutical manufacturers can use that to their advantage.
What is speciality pharmacy?
Unlike the disease states that they serve, Specialty Pharmacies (SPs) lack a consistent or even tangible definition. Agencies such as the URAC (Utilization Review Accreditation Commission) will give accreditation to SPs but so far only 80% or so of the existing SPs hold some sort of certificate (Genentech report). At its core, SPs can probably be best characterized as a comprehensive and coordinated solution of care that delivers expert therapy management and support to patients with chronic illnesses and complex medical conditions. While that might sound fancy, the high-touch approach to traditional pharmacy dispensary is not to be undervalued.
While Specialty Pharmacy distributes mostly specialty drugs, the services they offer could potentially fill the gap for some non-specialty drugs as well. The services range from patient compliance and adherence programs, customer support and education, case management / disease management, reimbursement support, REMS programs, clinical trials management…the list goes on and on. The value proposition these services deliver are both tangible and profitable for stakeholders across the healthcare continuum. Studies have shown that total health care cost for organ transplant patients during 1 year of follow-up was 15% lower in the specialty pharmacy program group compared to those using traditional retail pharmacy services ($24,315 vs. $27,891, P = 0.03). A recent IMS study concluded that for specialty drugs delivered across four channels – standard retail pharmacy, specialty pharmacy, standard mail, and aggregate category – the SP channel outperformed the retail channel by an average of 9%.
As a result of these significant cost-savings, large Pharmacy Benefit Managers (PBMs) and payers have acquired and vertically integrated Specialty Pharmacies into their own conglomerates in order to better manage pharmaceutical spend and reduce inappropriate use. In a 2011 survey of medical and pharmacy directors at 102 health plans representing 122 million lives, 81 percent of the plans said they required members to use the services of at least one SP in their specialty pharmacy networks (EMD Serono). In the Genentech survey, 25% of MCOs implemented “distribution channel parity” by limiting physician reimbursement to the SPP discount rate for all drugs with another 32.5% of MCOs planning to do so in 2012.
Defining the Channel Strategy
In the product to patient scheme, defining the channel strategy is key to successful commercialization. While it seems that it’s a no brainer to use Specialty Pharmacy when faced with distributing a specialty drug, choosing the right Specialty Pharmacy can be critical as well. Once again, placing patient at the center of any strategic initiative is almost a guarantor of success. Who is the patient population and what is it that they want? Assume the eyes and the ears of the patient and map out the step by step patient experience from that first introduction to the product to filling the product at a pharmacy to supporting patient during usage and refill. And what that experience demands in terms of level of interaction, education, access, should determine the core distribution network.
For example, when Pfizer launched in Xalcori in 2011 for the treatment of locally advanced or metastatic non-small cell lung cancer (NSCLC) that is anaplastic lymphoma kinase (ALK)-positive, the channel strategy focused overwhelmingly on the needs of the patients. Because the oral oncolytic required a companion diagnostic to test for abnormal ALK gene, the company only funneled SPs with built in capability to check biomarker status of patient and facilitate provider-patient coordination for biomarker testing. The company also saw that using Specialty Pharmacies with these services eased payer anxiety by enforcing clinical guidelines that require genomic testing and monitoring / reporting on published evidence supporting the value of genomic testing. The Specialty Pharmacies attached to the larger PBMs were also able to provide input to Pharmacy and Therapeutics Committees, further deepening the relationship with payers.
In addition, the small patient population (only 1%-7% of NSCLC patients are ALK-positive) warranted a limited SP network that could allowed for greater distribution control as well as consistency of patient experience. To help with the $9,600 per month ($115,000 per year) price tag, Pfizer also enlisted the Specialty Pharmacies to refer patients to its First Resource Program, in which co-pay assistance and funding for the uninsured can be found. In the end, five Specialty Pharmacies, CuraScript, Accredo, US Bioservices, CVS Specialty, and Walgreen Specialty Pharmacy were chosen to distribute the product and deliver the services in a closed network.
In summary, the manufacturer should understand the opportunities and risks of any channel strategy, and tailor it for its specific patient population. Consideration of the patient population size, education requirements, product characteristics, and access to data is important. Depending on the need, it is also essential to look at opportunity to contract directly with the Specialty Pharmacies and therefore cut the wholesalers. The key is to engage with Specialty Pharmacies that are effective, experienced, and have thorough KPIs to evaluate pharmacy performance – time to fill, accuracy of dispense, patient feedback, etc. While the SPs offer a similar level of basic services, the additional services, patient reach, payer affiliation, and capabilities differ greatly between SPs. Which Specialty Pharmacy to contract with and network modeling (open, closed, exclusive, limited) could help realize an efficient distribution network.
Tailoring the Services to the Patient
Specialty Pharmacies have the incentive and the capability to tailor their services to better serve the needs of a patient. What a SP can and will do, is at the discretion of those who know how to leverage it. In addition to the typical services such as compliance and adherence monitoring, SPs also offer therapeutic area specific services for patients, such as CVS Caremark’s Fertility Care Program in which the SP helped patients with pre-verification program and support in egg donor services. Others such as Accredo Specialty Pharmacy provide Personalized Medicine programs that consult on evidence-based care decisions for Oncology patients. This program even provides information for physician to make prescribing decisions.
These programs are therapy and product specific and are tailor made for patients in collaboration with the drug manufacturers. If a specific capability does not exist, Specialty Pharmacies are more than willing to build the capability to suit patient needs. According to the Genentech report, only 23.5% of the surveyed SPs provide pharmacogenomic support to managed care clients, but an additional 58.8% of the SPs are planning to do so in 2012 or are investigating the potential to do so. The services offered are constantly changing and evolving. The key is to know how to use it to advantage to better patient experience.
It is important to recognize and differentiate between these two different types of physicians. For the experienced oncology practices, minimal guidance may be required. But for those with less expertise, the focus should be educating the physicians on the availability of services to help them with the potentially complex reimbursement process – this is where SPs could potentially come in. Specialty Pharmacies do and continue to increase their services offered directly to prescribing physicians. In 2011, 65% of Genentech survey SPs reported offering consultation, education, and / or support services to physicians, and an additional 6% plan to do so in 2012. Specifically, SPs will train physicians regarding patient discussion on finances / payment. Additionally, SPs could help these physicians with pre-populating PA forms, e-sign PA forms on behalf of physicians, would greatly lighten the load.
As the distribution landscape evolves with the increased importance of SPs, pharmaceutical companies have the opportunity to provide patients with a more targeted and efficient approach to care. The use of this channel creates great opportunities to better understand the patients and caregivers and ensure better product uptake and continued use of prescribed drugs by patients.