The pharmaceutical industry is in transition. Research-based drug makers are finding it increasingly difficult to create breakthrough products using traditional small-molecule technology, even as generics suppliers continue to increase their already dominant market share in terms of prescriptions dispensed. As a result, biopharmaceuticals have become the focal point for many research and development programs and emerged as the fastest-growing part of the business.

A recent report by CVS Caremark projects that annual spending on specialty drugs will quadruple to exceed $400 billion before the end of the decade.

Biologics and other specialty medications frequently require methods of handling and administration that are far more complex than those used for traditional drugs, resulting in new imperatives for retail pharmacies and drug distributors that want to capitalize on the sector’s potential.

The Center for Healthcare Supply Chain Research, a foundation that bills itself as the knowledge partner of the Healthcare Distribution Management Association, is one of the organizations intent on helping those entities and other health care stakeholders understand what the market’s evolution will mean to them.

“Our research shows that trends are converging,” notes Karen Ribler, the center’s executive vice president and chief operating officer. “If you look at the HDMA Factbook [the annual benchmark for the drug distribution industry, now in its 84th year], you’ll see that specialty is expanding just within the space of our traditional distributors. As a matter of fact, there is more specialty pharmaceutical sales volume going through traditional distributors than through specialty distributors.”

That said, the center, which last year issued “Specialty Pharmacy: Implications of Alternative Distribution Models,” recognizes that the complexity of biopharmaceuticals is likely to result in a variety of viable approaches.

“We operate in a dynamic industry, where things change rapidly,” Ribler notes. “But at this point, when we look at various models, drugs that are infused or injected and require on-site dosage adjustment are probably best handled on a buy-and-bill basis, meaning products go from specialty distributors to physicians’ offices.

“If a patient is using a specialty medication that does not require that kind of adjustment, then ‘white bagging’ or direct delivery is probably a very appropriate way to handle that product, which is going through either a traditional or a specialty distributor.”

Some community pharmacies, CVS Caremark and Walgreens among them, are already embracing the opportunities presented by biopharmaceuticals. Advances in product delivery systems are likely to make it easier for more retailers to get involved.

“With more oral treatments in the product pipeline, there could be entirely different ways of handling specialty distribution, including retail and mail order,” says Ribler. “One can’t predict the future, but we know our industry is pretty resilient and pretty dynamic. Our distributors do a very good job of figuring out how to help their business partners serve the patient.”

While recognizing that the characteristics of different medications may dictate a limited or exclusive method of distribution, Ribler asserts that pharmacists will be an important part of the overall equation.

“With their ability to see the complete record of a patient, pharmacists have a very strong role to play in the specialty pharmacy space,” she says. “Community pharmacists are now trying to figure out how they fit in. That’s one of the reasons that, in the specialty pharmacy trends book that’s coming out within the next couple of months, we lay out distribution models in detail and discuss how a supplier decides what form of distribution to utilize. Manufacturers have to think about things like the size of the patient population, the shelf stability of the drug and how it should be administered.”

The Center for Healthcare Supply Chain Research’s mission is to foster such understanding. In publications, presentations to industry groups and slide decks designed for use in pharmacy schools and other venues, the foundation works to give health care providers a solid factual foundation on which to act.

“The people who purchase our research reports run the gamut of the industry — distributors, manufacturers, pharmacy operators, PBMs, the government, analysts, schools — you name it, they’re buying our information,” notes Ribler. “I’m thrilled by that because we’ve gained their trust by ensuring that our data is empirically based and thoroughly vetted. We work with a variety of groups to make certain that the quality of our research is strong. That’s always been one of our goals.”