Where everyone wants to be ... but how to get there?
“I have 20 years in the retail sector, and I know that not every pharmacist can be a specialist in a retail environment. So we give the pharmacists a higher level of confidence by using technology to target specific [national drug codes]. If a limited- distribution product or a specialty script that they either don’t stock or they have never seen before comes across the counter, the computer directs them to Hy-Vee Pharmacy Solutions. Now they can tell the patient, ‘Yes,’ instead of ‘I’m not sure if I can help you,’ or ‘We don’t stock that medication.’”
That’s how Mike Agostino, president of Amber Pharmacy, described his company’s relationship with Hy-Vee, a chain of 230-plus supermarket pharmacies spread throughout the Midwest, during our annual DSN Industry Issues Summit/Specialty Pharmacy Roundtable in late November. The complete transcript is available online at DrugStoreNews.com/SpecialtyPharmacy — it’s a must-read for any one who needs to understand the critical issues facing specialty pharmacy today and in the years to come.
And according to OncoMed CEO Burt Zweigenhaft, another member of our panel, that includes just about everyone who makes their business in pharmacy: “Specialty pharmacy is 50% of the market; it’s 50% of the growth. It’s where everyone in pharmacy wants to be,” he implored his fellow panelists.
I‘ve been giving a lot of thought to these comments over the last several weeks, which have included a busy travel schedule. In 4-of-5 trips, the subject of specialty pharmacy was a major topic of conversation. Zweigenhaft is right: Specialty pharmacy is where everyone in pharmacy wants to be. The million-dollar question is how to get there?
According to IMS VP industry relations Doug Long, who spoke Feb. 6 at the National Association of Chain Drug Stores Regional Chain Meeting on current trends and forecasts for the U.S. pharmaceutical market, specialty pharmacy dollars are growing more than 10% on a 12-month moving annual total basis.
Where is that business landing? Mail order is the big winner, with about $20 billion worth of the market, and clearly pacing the growth in specialty pharmacy, with dollar sales up more than 16%, during the same 12-month period. In chain pharmacies, specialty pharmacy is worth about $8 billion, Long said, up about 1.6%. And while the base is much smaller at about $4.2 billion, independent drug stores were growing specialty pharmacy dollars at more than 5%.
There were 35 new drug approvals in 2011 — the second largest yearly amount in more than a decade, Long said, and most of these were specialty drugs. The current new drug development pipeline is expected to bring more of the same for many years to come. It will be critical for pharmacy retailers like the regional chain executives Long addressed in February, “to capitalize on as many of these opportunities [in specialty pharmacy] as possible,” he said.
That doesn’t mean that every pharmacy chain in America needs to make an internal commitment to specialty pharmacy. It doesn’t work in every store, and certainly not every pharmacist can be a specialist in some of these more advanced disease states. But business relationships like the partnership Amber has with Hy-Vee and the hundreds of providers that make up networks like the Armada Specialty Pharmacy Network, can facilitate the delivery of specialty pharmacy in a manner that is transparent to the patient; all they know is their preferred pharmacy continued to provide all of their pharmacy needs.
Long’s comments reminded me of something that I had believed for a long time — as the specialty pharmacy market continues to grow, the universe will continue to expand as well. Not every pharmacy will play the same role. Big pharmacy retailers like CVS and Walgreens will do it themselves. Retailers like Hy-Vee will find partners.
I agree with Burt Zweigenhaft: Specialty is where everyone in pharmacy wants to be right now. And this is how they are going to get there.
Rob Eder is the editor in chief of The Drug Store News Group, publishers of Drug Store News, DSN Collaborative Care and Specialty Pharmacy magazines. You can contact him at [email protected].