Home infusion enhances specialty pharmaceutical distribution
With partial support from manufacturers themselves, home health services are emerging as a critical channel for specialties
Patients, payors and healthcare providers are discovering that many healthcare services traditionally delivered in a hospital, long-term care facility or even outpatient facility can be delivered just as effectively—if not more so—in the patient’s home. “Home health” as a type of medical service includes skilled nursing, hospice care, geriatric services and pain management, among others; and while home health providers dispense many types of medications, this distribution channel is critically important to injectable specialty drugs.
For patients, home health services offer convenience (no travel), safety (no unnecessary exposure to hospital infection) and potential quality-of-life improvement. For payors, home health represents a significant cost savings. According to Russell Bodoff, president and CEO of the National Home Infusion Association (NHIA; Alexandria, VA), delivery of infusion therapy in the home is significantly less expensive than within a hospital setting.
The 30-year-old home infusion industry has experienced healthy growth the past few years and is somewhere between a $9-11-billion dollar field, Bodoff says. NHIA currently has about 400 members representing 2,000 sites of care nationwide. “Our members range from small to large national and regional infusion organizations, as well as single site independent or hospital-based providers.” The industry also has been subject to consolidations, with the past three years seeing “very significant M & A activity,” according to Bodoff. For example, Walgreens acquired Crescent Healthcare (Anaheim, CA) earlier this year, and late last year CarePoint Partners (Cincinnati, OH) purchased the home infusion and enteral division of Pediatric Health Choice (Tampa, FL).
Another group of players in the home health space are the specialty pharmacies that dispense not just infused drugs but also high-cost oral and injectable therapies directly to patients in their home. They, too, are experiencing tremendous growth, as the drug pipeline continues to pump out expensive, high-touch specialty therapies for serious medical conditions.
This year, Diplomat Specialty Pharmacy (Flint, MI) is expected to dispense close to one million oral products or self-injectables to 100,000 patients in their homes, according to Phil Hagerman, Diplomat CEO. The company’s revenue for 2011 totaled $780 million (for all types of dispensing, not just home health), after hitting $500 million in 2010. Diplomat’s biggest source of recent growth has been its specialty infusion division, which grew 200% last year, after the company “made an aggressive play to move into home infusion as new indications and new products opened up new opportunities,” Hagerman says.
The company relies on an extensive nursing network of 500 agencies to administer home infusions and deliver other patient services nationwide. While many of the company’s patients are still in Michigan, Diplomat is becoming better known as a national specialty pharmacy: “We’re doing business in every state, and in every disease state,” Hagerman says.
Oncology is Diplomat’s largest sector of business, followed by immune deficiencies and rheumatology. The company maintains seven so-called centers of excellence—like oncology, immunology, HIV and hepatitis—and patients are assigned to one based on their condition. Each center is staffed with patient care coordinators, reimbursement specialists, pharmacy technicians and other support personnel—all of whom understand the commonalities and challenges of that particular disease state.
While Diplomat deals with volume, an example on the other end of the spectrum is Centric Health Resources (Chesterfield, MO), which dispenses a handful of drugs to patients suffering from rare and orphan diseases (typical patient populations are under 6,000).
Instead of purchasing the drugs wholesale from the manufacturer and then selling them to patients, Centric is not involved in the buying or selling of product, in an effort to keep the costs of already expensive therapies down. “When you think about it, drug companies outsource the manufacturing—we’re just extending that all the way to the patient level,” Kephart says. “You can now contract services to get your product to your patient without having to go through a ton of intermediaries.”
Centric maintains its own network of nurses, who, Gephardt says, provide a higher level of expertise around these types of specialty products, but most large, national payors require the company to contract with specific nursing networks.
According to Michelle Hefley, COO of Centric, ensuring the quality and skill level of the nurses that actually go and administer care is one of the biggest challenges facing specialty pharmacies that work in the home health space. “It takes someone with a certain level of experience and skill set,” she says. “And that goes beyond needing a strong clinical skill set. They have to be able to work independently, since they’re generally moving from place to place.”
Like most specialty pharmacies, Centric Health Resources offers reimbursement assistance and patient education and support, in addition to the actual dispensing and administering of the drugs. And after merging with Dohmen last fall, the company has added pharmacovigilance and adverse event reporting to its offerings.
Other specialty pharmacy companies include: NuFactor, the subsidiary of FFF Enterprises (Temecula, CA) that specializes in infused therapies for hemophilia, immune deficiency and neuromuscular disorders; and Walgreens, the chain pharmacy giant that earlier this year purchased specialty pharmacy assets—including 30 community specialty pharmacies and a central fill facility, mostly for HIV, oncology and transplant patients—from BioScrip (Elmsford, NY) in a $225 million deal. Armada Healthcare (Florham Park, NJ), meanwhile, plays a unique role in the specialty pharmacy industry. Dubbing itself a “channel management company,” Armada designs and implements patient-focused specialty drug programs. In addition, it serves as the point of contact between the drug companies that make the 20,000 specialty drugs and devices Armada has on contract and the specialty pharmacies that dispense them.
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