10 Top Trends in Specialty Pharmacy

6. The Specialty Blockbuster Drugs Are Coming
Expect to see a shift from blockbusters in primary care to specialty blockbusters.

“Tomorrow’s best-sellers are more likely to target smaller patient populations than have the blockbusters of the past,” said Fein. “The world is changing, so manufacturers’ commercial and channel strategies will be changing, too.” (Figure 2.)

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While Lipitor has been lauded as the biggest blockbuster drug of all time, garnering $141 billion since its launch, Humira, a specialty drug, is poised to surpass Lipitor in terms of total revenue. Forbes contributor Simon King wrote, “Based on cumulative revenue performance for the subsequent 5 years of availability (ie, years 11 to 15 on the market), Humira is forecast to outperform Lipitor with global revenues of $69 billion versus $63 billion. Furthermore, Humira is forecast to record higher cumulative sales during this subsequent 5-year period, compared to its first 10 years of availability.”¹³

King’s prediction relies on the 2016 patent expiration date of Humira. “With Humira’s biologic status set to insulate the franchise from a steep generic-driven decline, it is likely that by 2020, AbbVie’s product will have broken more sales records [than Lipitor],” said King.

7. Biosimilars Face Challenges
Biosimilar treatments are gaining popularity in the European Union, but face challenges in the United States.

The biologics on the US market, as yet, lack any real competition in terms of price. Although in some cases there are handfuls of specialty therapies for some of the most common chronic conditions, most of these drugs are branded medications and are in competition with one another. As a result, they are typically priced in a similar manner.

The prospect of using biosimilar drugs in place of expensive branded biologics has been promising, especially since spend in the specialty category continues to rise each year. According to a report by Grant Thornton, between 2009 and 2019, nearly 21 biologics with an estimated market value of more than $50 billion will lose patent protection in the United States.  Many of the drugs scheduled to lose patent protection are among the most expensive therapies in the autoimmune and oncology categories.¹⁴

One of the proposed specialty medication cost-cutting methods is the widespread adoption of biosimilars. There is, however, no unified regulatory framework for the use of biosimilars. Europe has the most defined guidelines compared with those of the United States, India, China, Japan, and Latin America. European Medicines Evaluation Agency (EMA) guidelines demand a “detailed demonstration of quality, safety, and efficacy of biosimilar products”—but they do not require a biosimilar product to be interchangeable with the branded version. Substitution is not a core principle of discussion in the EMA’s guidelines.

Despite the numerous challenges associated with launching biosimilars, such as interchangeability, biosimilar naming conventions, inference of lower quality, and recent state-specific substitution regulations, biosimilars are projected to produce a 20% discount from originator biologics.

Sharon Frazee, vice president of research analytics at Express Scripts, told SpecialtyPharmacyTimes.com that the real issue is that “We really need to look at the biosimilar provision in the Affordable Care Act and try as a nation to make some changes or at least try to make it easier for people to actually invest in the development of biosimilars.”¹⁵

“Although the ACA establishes a pathway for biosimilars, essentially the provision mandates that a biosimilar manufacturer hand over their complete dossier and all of their intellectual property to the originator manufacturer to ensure that there will be no litigation down the road,” Frazee continued. “If you have to give up all of your intellectual property in order to get the provisions, pharmaceutical companies will be less likely to participate.”

In addition, the FDA has yet to provide thorough guidelines on when a drug may be considered “similar enough” to an originator product, and there is still uncertainty surrounding the manufacture, safety, and reimbursement of these products.

8. Specialty Organizations Are Proliferating
There has been an explosion in specialty pharmacy trade organizations and accreditation companies in the past 18 months.

Several different accrediting agencies have programs specific to specialty pharmacy. Four of the most well-known specialty pharmacy accreditation programs are from the Accreditation Commission for Health Care, URAC, The Joint Commission, and the Community Health Accreditation Program.

Two major specialty organizations have sprouted up in support of the industry—the Specialty Pharmacy Association of America (SPAARx), an organization formed by Armada Health Care, and the National Association of Specialty Pharmacy (NASP). Other organizations, such as the Pharmacy Benefit Management Institute (PBMI) and the Academy of Managed Care Pharmacy (AMCP), have started producing specialty-focused annual meetings or program offerings and have offered educational tracks specifically geared toward the practice of managing specialty drugs on medical and pharmacy benefits.

Although specialty pharmacy accreditation is not technically mandatory, many manufacturers will not enter into distribution contracts with specialty pharmacies unless those businesses are able to demonstrate proof of their capabilities—and for most request for proposals issued by payers and pharmaceutical manufacturers, accreditation is increasingly becoming a required component.

“The specialty market’s projected growth is drawing even more pharmacies into the business of dispensing specialty drugs,” Fein pointed out. “Unfortunately, the legacy pharmacy trade associations aren’t meeting the new market’s needs. This creates big opportunities for new organizations.”

9. PBM Consolidation Will Accelerate
Pharmacy benefit manager consolidations are expected to continue.

Pharmacy benefit manager (PBM) consolidations—such as Catamaran’s acquisition of competitor Restat, Express Scripts’ acquisition of Medco, and TPG’s deal for PBM EnvisionRx—are predicted to continue in the coming years.

Independent specialty pharmacies and smaller PBMs will likely be scooped up by the larger players, predicts Fein, and larger PBMs will have more negotiating power with pharmacies. “PBM consolidation will accelerate, driven by scale economies and bargaining power,” he said. “As the employer-sponsored insurance market shrinks, PBMs will be repositioning their business toward managed care and the exchanges.”

“The consolidation will not have a great impact short term on either management or distribution of specialty drugs,” commented F. Randy Vogenberg, PhD, principal of the Institute for Integrated Healthcare. “Over the longer term (3 to 4 years), the consolidation and changes taking place in the market will have more impact on patient management as well as who is doing the patient management,” he said. “For example, [there will be] more centralized versus community-based patient management as part of mainstream pharmacy capabilities.”

Some think that further PBM consolidation is a looming political problem and could cause some real concern among patients and the general public. In addition, it also may create some issues surrounding restraint of trade.

“On the integration side, are people really comfortable with 50% of their drugs coming from just a handful of providers?” said Rob Shelley, vice president, TRICAST, Inc. However, he noted, specialty pharmacies must try to glean as much patient data as they can from PBMs: “Integrated PBMs potentially can provide a wider frame of patient support because they have the full realm of client data.”

10. Retail Pharmacies Face Challenges
The “specialty by retail” model will continue to take shape as the larger chains enter the specialty pharmacy marketplace.

Retail pharmacies face significant challenges when entering the specialty pharmacy space. Product pricing information, inventory, and reporting demands for specialty drugs are often more stringent than for primary care medications, and reimbursement issues can introduce new challenges for members of the retail staff. Clinical programs to keep patients compliant with high-cost specialty drugs are also not typically part of a retail pharmacy’s strategy. In addition, manufacturers often limit the number of pharmacies authorized to dispense their specialty drugs through the use of a limited distribution model.

In response to these access hurdles, many retail pharmacies have been looking to specialty pharmacies to help them expand their offerings. Companies such as Diplomat Specialty Pharmacy and the Community Specialty Pharmacy Network support retail community pharmacy’s dispensing of specialty drugs by providing contracting, clinical support, and other services.

However, some question the ability of retail pharmacies to meet the needs of specialty patients. “Retail pharmacies lack the requisite services and technology infrastructure to compete for the business of dispensing specialty drugs with limited networks,” Fein said. “That’s why larger pharmacies and wholesalers are offering to provide back-end clinical services and care management.”

The role of specialty pharmacies will continue to evolve, and this could mean more involvement with retail pharmacies. “With increased utilization of specialty pharmacy medications, it can be anticipated that access to innovative specialty pharmacy medications will be streamlined for greater patient care and access,” noted SPAARx’s Alder. «

References

1. The White House Blog. The Affordable Care Act helps America's uninsured. www.whitehouse.gov/blog/2010/09/16/affordable-care-act-helps-america-s-uninsured. Accessed September 9, 2013.
2. Express Scripts. 2012 drug trend report. www.drugtrendreport.com/docs/ExpressScripts_DTR_0320.pdf. Accessed March 21, 2013.
3. Johnson S, Gunderson B, Bowen K, Starner CI, Gleason PP. Specialty drugs are forecasted to be 50 percent of all drug expenditures in 2018. http://cdn2.content.compendiumblog.com/uploads/user/e7c690e8-6ff9-102a-ac6d-e4aebca50425/accf0d87-0d14-4aa7-bbf3-193b90c8d68c/File/1f8476cb4a60eb472893ddf381c9c3ec/prediction_that_by_2018__more_than_50_percent_of_all_drug_expenditures_will_be_specialty.pdf. Accessed September 10, 2013.
4. Fein A. 2012-13 Economic report on retail, mail, and specialty pharmacies. January 2013.
5. Thomson Reuters. The economic power of orphan drugs. http://thomsonreuters.com/products/ip-science/04_013/1001450.pdf. Accessed September 13, 2012.
6. Clarke T. US drugmakers cheer “speed lane” for breakthrough therapies. www.reuters.com/article/2013/07/24/usa-fda-drug-therapies-idUSL1N0FU1XZ20130724. Accessed July 24, 2013.
7. Tendler CL. Dr. Tendler on Breakthrough Designation for Ibrutinib. www.onclive.com/onclive-tv/Dr-Tendler-on-Breakthrough-Designation-for-Ibrutinib. Accessed September 11, 2013.
8. Hawthorne S. Mining the pipeline: leading investigational products and areas of unmet need. www.kantarhealth.com/docs/press-articles/mining-the-pipeline---leading-investigational-products-and-areas-of-unmet-need.pdf  Accessed September 12, 2013.
9. Hernandez R. FDA’s new expedited approval program provides major communication breakthrough for industry. www.specialtypharmacytimes.com/news/FDAs-New-Expedited-Approval-Program-Provides-Major-Communication-Breakthrough-for-Industry. Accessed August 1, 2013.
10. Abboud C, Berman E, Cohen A, et al. Price of drugs for chronic myeloid leukemia (CML), reflection of the unsustainable cancer drug prices: perspective of CML Experts. Blood. Prepublished online April 25, 2013. doi: 10.1182/blood-2013-03-490003. http://bloodjournal.hematologylibrary.org/content/early/2013/04/23/blood-2013-03-490003.full.pdf.
11. Artemetrx. Specialty drug trend across the pharmacy and medical benefit. www.artemetrx.com/docs/ARTEMETRX_Specialty_Trend_Rpt.pdf. Accessed September 17, 2013.
12. Hernandez R. Avella Specialty Pharmacy: overcoming oncology adherence barriers. www.specialtypharmacytimes.com/news/Avella-Specialty-Pharmacy-Overcoming-Oncology-Adherence-Barriers. Accessed June 18, 2013.
13. King S. The best selling drugs since 1996: why AbbVie's Humira is set to eclipse Pfizer's Lipitor. www.forbes.com/sites/simonking/2013/07/15/the-best-selling-drugs-since-1996-why-abbvies-humira-is-set-to-eclipse-pfizers-lipitor/. Accessed August 1, 2013.
14. Grant Thornton. Bio-dynamism: Insights into the biosimilars market: an overall perspective. www.grantthornton.in/assets/BioAsia_2013.pdf.  Accessed September 17, 2013.
15. Hernandez R. Adoption of biosimilars should alleviate high specialty drug prices. www.specialtypharmacytimes.com/news/Adoption-of-Biosimilars-Should-Alleviate-High-Specialty-Drug-Prices. Accessed September 17, 2013.

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About the Author
Randi Hernandez, MS, is associate editor/online for SpecialtyPharmacyTimes.com and writes on trends, clinical updates, and news from the specialty pharmacy industry.

The website complements Specialty Pharmacy Times, the bimonthly journal published by Pharmacy Times, which features articles on the business and practice of specialty pharmacy authored by industry leaders and experts in their field.