Catalyst Corner

Specialty Pharmacy Sparks Concerns ––>

Finding and implementing solutions regarding specialty
pharmacy is taking on increased importance, as these products account
for a growing percentage of the annual healthcare spend. According to
Express Scripts 2016 Drug Trend Report,
based on 2015 data: “Today 37.7% of drug spend is for specialty
medications, with the number expected to increase to 50% by 2018 and
continue to grow from there.” This growth, which includes biosimilars,
is anticipated to continue for the foreseeable future. The combination
of new, expensive products used to treat chronic conditions experienced
by a large part of the population will have a significant impact on the
healthcare budget.


According to the National Association of Specialty Pharmacy (NASP):

A specialty pharmacy is a state-licensed
pharmacy that solely or largely provides only medications for people
with serious health conditions requiring complex therapies.

In addition to being state licensed and state
regulated, specialty pharmacies should be accredited by independent
third parties such as URAC, the Accreditation Commission for Health Care
(ACHC), the Center for Pharmacy Practice Accreditation (CPPA), or The
Joint Commission, to ensure consistent quality of care.

Specialty pharmacies connect patients who are
severely ill with the medications that are prescribed for their
conditions, provide the patient care services required for these
medications, and support patients who are facing reimbursement
challenges for these highly needed but also frequently costly

The term “specialty
pharmacy” has a variety of meanings. To some, it means expensive
medications; to others, it means a pharmacy that focuses on medications
to treat certain disease states. What we know is that there are
challenges facing all healthcare stakeholders when it comes to
“specialty.” The industry has not yet agreed upon definitions for
“specialty medication” or “specialty pharmacy,” although the definitions
that do exist have some consistent themes.

Regardless of the
definition, the issues surrounding specialty are impacting many
stakeholders and causing a flurry of industry activity. There are
conferences, webinars, and white papers devoted to the topic.

Insurance Plans’ Concerns

The pipeline is
replete with specialty and biosimilar products. Insurance plans are
looking for ways to manage the increasing trends, and are implementing
tools such as prior authorization, preferred provider networks, and
member cost-sharing programs. Insurance plans are also looking to
pharmacies to report on any coupon or co-pay assistance that may be
applied, so that the member’s cost share reflects his or her
actual out-of-pocket expenditure. They are also
looking at models that tie the financial terms of their agreements with
the manufacturer’s to clinical performance.

Pharmacy Concerns

New arrangements are
being formed between community pharmacies and specialty pharmacies,
allowing the community pharmacy to dispense the product and maintain its
patient relationships. This can be confusing to patients and
prescribers, who may not know that the community pharmacy has an
agreement with the specialty pharmacy, and has directed the prescription
to the specialty

Pharmacies are often
trying to obtain the prior authorization, yet with new ePA (electronic
prior authorization) requirements in place in some states, may not be
able to electronically submit the request or be notified of the outcome.

Many products have a
risk evaluation and mitigation strategy (REMS) associated with them,
which are FDA-required parameters that must be met prior to dispensing.
Identifying and complying with these requirements takes additional

requirements continue to evolve. Pharmacies often have to report a
number of metrics to the manufacturer, from dispensing data to care
coordination efforts. Some states now require the pharmacy to report the
dispensing of a biosimilar to the prescriber.

Manufacturers’ Concerns

Everyone working in healthcare today is accustomed to doing more with less, and recognizes that priorities are often set externally. Adapting to meet the needs associated with specialty pharmacy is no different.  

Manufacturers remain
focused on ensuring their products receive preferred formulary status,
and reducing or eliminating barriers to patient access. They have
invested heavily in resources to assist in getting the claim paid,
primarily through the use of hubs that facilitate obtaining prior
authorization and identifying financial assistance resources for
patients. They are also working with insurance plans to develop
agreements that incorporate clinical outcomes.

Patients’ Concerns

Many specialty
products have costs that range from several hundred dollars, to
potentially several hundred thousand. With the increase in high
deductibles and/or co-insurance plans, the patient financial
responsibility can be overwhelming or insurmountable. Patients may not
understand network limitations or know how to identify the financial
assistance available to them via manufacturer co-pay assistance programs
or charitable foundations. Patients have been able to use the financial
assistance programs without the payer knowing, but as efforts to report
those assistance amounts to the payer grow, patients may still struggle
to pay their annual cost share.

Technical Support


A Specialty Medication Can Be:

❑ A high-cost prescription medication used to treat complex, chronic conditions.
❑ Complex to manufacture.
❑ Difficult to administer.
❑ Biologic, biological,  biopharmaceutical, biotech.
❑ A high-cost injectable, infused product, oral agent, or inhaled medication.
❑ Require close supervision, monitoring, and handling.
❑ Be administered at home or in a provider’s office, infusion center, or hospital.
❑ Be available through exclusive, restricted,or limited distribution.

Adding to these
concerns are the operational inefficiencies and system deficiencies that
exist in the specialty arena. Prescriptions are rarely transmitted
electronically, as is common for ambulatory and inpatient medications,
but primarily via a faxed intake form. Prescribers don’t know if a prior
authorization is needed, or if the patient’s plan requires use of
certain pharmacies. Their system may not discretely capture information
needed to obtain payer approval, such as genomics data. REMS
requirements can vary by product, and determining the requirements can
be challenging. Pharmacies are verifying benefits via web searches and
telephone calls. Pharmacies may find themselves no longer able to
manually submit a prior authorization request, depending upon plan
constraints or regulatory requirements. Specialty products may require
supplies for administration, or patient education before treatment
begins, so multiple orders may be needed. Coordinating various orders
can be challenging for the pharmacy, especially if it has to work with a
homecare agency to determine when the medication can be provided to the
patient. All of these manual processes negatively impact speed to
therapy, operating costs, and stakeholder satisfaction.

Efforts are being made to address these concerns. A recent article in Specialty Pharmacy Times outlines some of
the work being done:

Even with the
industry coming together to develop solutions, implementation isn’t
imminent. If the solution involves a new standard, or a new version of a
standard, then regulations may need to be published that require the
industry to use the new standard. Programming to support the new
standard has to occur, followed by training for end users in workflow
changes. If the solution doesn’t involve system changes, or isn’t
required by regulation, the process and timeline could be more complex
and longer. Everyone working in healthcare today is accustomed to doing
more with less, and recognizes that priorities are often set externally.
Adapting to meet the needs associated with specialty pharmacy is no


Marsha K. Millonig, R.Ph., M.B.A., is president of Catalyst Enterprises in Eagan, Minn. The firm provides consulting, research, and writing services to the healthcare industry. The author can be reached at