Editor’s Note: This is a three-part blog series is covered by channel expert Bill Roth, Senior Vice President and General Manager of Consulting (also founder of Blue Fin Group). Bill Roth explores how specialty pharmacy has evolved and their take on the current landscape and insights for pharmaceutical organizations. From the rising costs of specialty pharmacy distribution and dispensing obstacles to the growing presence of digital pharmacies, direct distribution, and alternative networks, pharmaceutical organizations are trying to pivot in this new environment. Next in the series, we’ll discuss Industry Fragmentation & Disruption.

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Changes in Specialty Pharmacy Distribution

Asembia is, without doubt, the biggest and best conference in the pharmaceutical industry from the perspective of location, attendees, and how it is organized and managed. 

We began attending Asembia a decade ago. What strikes me most is the comparison and contrast of how the event and the learnings have varied over the years. In the early days, we all viewed with awe the differences between classic retail pharmacy and specialty pharmacy. In many ways, specialty pharmacy was simply “mail order on steroids” as we used to refer to it. Today, specialty pharmacy means a lot of different things to a lot of different companies and people. At its core, the legacy view of specialty pharmacy meant a pharmacy that focuses on a specialty area, the biggest three being oncology, immunology, and neurology. Today, specialty pharmacy means a pharmacy that leans in against the headwinds of getting a patient onto therapy that otherwise would face obstacles with complexity with prior authorization, step edits, statements of medical necessity, administration of the therapy, and financial hurdles for the patient. 

In Asembia hallways, meeting rooms, and auditoriums, pundits gathered to discuss upcoming reforms of the Inflation Reduction Act, the removal of the Medicaid rebate cap, the pending Medicare out-of-pocket cap, the optimism and hope of specialty generics and biosimilars, the impacts of moving forward in a world without significant price increases, and most notably the fact that the hurdles that once just faced specialty products have not trickled down to “specialty lite” products – products priced between $5K and $25K annually and even to regular brands that were once distributed by brick-and-mortar pharmacy. So the definition and use of specialty pharmacy have definitely changed. 

We’d like to dive deeper into this subject because of what it means to pharma manufacturers, the commercial success of their products, and how this impacts channels and service providers in the space. More and more the traditional lines of pharmacy are not just blurring but evaporating in front of our eyes. Let’s look at the data.

In oncology, for example, typically a third of the volume goes through in-office dispensers, a third through hospital specialty pharmacies, and the remaining third through a small network (usually two to three independent specialty pharmacies with a payer-aligned specialty pharmacies thrown in if the patient population and indication drug class are large enough). Oncology is not controlled by payer-aligned pharmacies the way that immunology or neurology has taken shape. 

In our recent webinar, Dave Weiss, VP of Industry Solutions and I took a deeper dive into the various forms of pharmacy and what is going on with a backdrop to the new product archetypes, shifting reimbursement, and the onset of new pharmacy types. We also explored two under-the-radar pharmacy segments that are well worth noting in today’s environment. If you’re interested in learning more, please reach out to ic@integrichain.com, and stay tuned for our next update!

Learn About Specialty Pharmacy