Specialty pharmaceuticals, specialty distribution and specialty pharmacies are all the rage in the US biopharma industry today; the generally accepted notion is that specialties will represent half of industry revenue by the end of the decade, if not sooner. But in discussions with pharma clients and their distributors and service providers, a new twist to this is emerging, which might be called Alternative Specialty Lite or just Specialty Lite, according to Rob Brown, VP, business development at Omnicare Specialty Care Group (Cincinnati), which is one of the companies in the specialty-distribution and specialty pharmacy space.
Speaking at the Customized Pharma Distribution Strategies conference (May 20–21; organized by CBI), Brown noted that specialty pharmaceuticals are themselves defined by a long (and growing) list of necessary delivery services: working through prior authorizations; coordinating injections with outpatient clinics; follow-up patient services; mandated outcomes reporting and more (Pharmaceutical Commerce, Mar/Apr, p. 3). Manufacturers with products in the same therapy class are now competing in arranging (or paying for) these services with the specialty distributors and pharmacies dispensers they work with. In broad economic terms, these ancillary services are most commonly utilized for products that cost more than $1,000 per month to the payer.
But what about the under-$1,000 products that themselves have a complicated pathway from the manufacturer to the patient? Those are candidates for Specialty Lite: a limited set of services, such as clearing a prior-authorization requirement (which might pertain only selectively to patients in certain payer plans) or a patient welcome call at initiation of therapy. In conventional, “open” distribution (where the product is dispensed at a local retail pharmacy), even a small hitch like this can create significant problems in successfully starting a patient on therapy and getting a product to a patient. Result: lost sales. Another example is direct-to-patient distribution, which is difficult to handle in conventional wholesale channels.
Manufacturers have known about these potential problems for a long time, but what is changing now is that the growth of specialty distribution and specialty pharmacy has created a methodology for handling the lower-cost, limited-services types of drugs. Increasingly, manufacturers will have the option of using conventional distribution and making arrangements with a third-party services provider, or building a Specialty Lite model to service the patient.