What’s So Special About Specialty Pharmacy? What Hospitals and Health Systems Need to Know About Specialty Pharmacy Integration
Health Law Alert 03/02/16 Simone Colgan Dunlap
Most of us are now familiar with the buzz surrounding specialty drugs. Although specialty drugs are only used by a small number of patients, these drugs result in a significant portion of overall drug spend in the United States and represent the fastest growing sector of pharmacy spending today. According to some PBM reports, specialty drugs represent only 1 percent of all U.S. prescriptions but represent 31.8 percent of the total drug spend. Due to price inflation and new drug approvals, experts predict that specialty drug use will surpass traditional drug spend by 2018. By 2020, it is predicted that specialty drugs will represent half of the total drug spend at a cost of $400 billion.
Many hospitals and health systems have not considered providing specialty pharmacy services for outpatients. Specialty products are expensive and specialty pharmacies can be extremely profitable—an appealing concept for health systems under increasing financial pressures. In addition, health systems may be able to utilize the 340B pricing program when they retain specialty pharmacy prescriptions.
The benefits of specialty pharmacy integration are not just economic—they also create real opportunities to advance patient care. Health systems are ideally positioned to coordinate care for patients that require ongoing high-touch pharmacy services, particularly for systems that include specialist physician practices or are a part of an ACO. A health care system that includes a specialty pharmacy can collect clinical data from a number of sources to demonstrate clinical outcomes and quality of care, more accurately report adverse events, and promote medication adherence. Further, health system pharmacies can offer other valuable patient benefits. For example, system pharmacies could coordinate prescription pick-up with visits for lab services or provide in-person injection training. This type of data sharing and care coordination among different types of providers cannot easily be duplicated by standalone specialty pharmacies and will likely give hospital and health systems an edge when competing for spaces in increasingly narrow specialty distribution networks.
Indeed, a growing number of hospitals and health systems, including the Cleveland Clinic, Rush University Medical Center, St. Jude Children’s Research Hospital, the University of Illinois Hospital and Health Sciences System, Fairview Pharmacy Services, and Duke University Hospital, have or are in the process of integrating specialty pharmacies.
If you have questions about specialty pharmacy, please contact Simone Colgan Dunlap at (602)-email@example.com, or your Quarles & Brady LLP attorney. Want to know more about how we can help? Click here to view a description of our services specific to specialty pharmacy.
 Express Scripts Drug Trend Report, http://lab.express-scripts.com/lab/drug-trend-report, accessed February 29, 2016.
 CVS Health, Specialty Costs: Can They be Contained, accessed February 29, 2016; Artemetrx. Specialty Drug Trend Across the Medical and Pharmacy Benefit. http://www.artemetrx.com/docs/ARTEMETRX_Specialty_Trend_Rpt.pdf. Accessed February 29, 2016.