The COVID-19 pandemic has altered life as we know it and impacted each of us in a very personal way. The scale and magnitude of the pandemic brought sudden and unexpected challenges and opportunities for all specialty pharmacy stakeholders. As we look to the future, we must consider the impacts the COVID-19 pandemic has had on the entire specialty pharmacy industry.
Specialty pharmacy was perfectly positioned to support the remote management of patients prior to the COVID-19 pandemic. Specialty pharmacy’s established business model and infrastructure supports centralized prescription fulfillment, including dispensing and delivery; remote patient and disease management; and patient-centric care coordination involving all stakeholders. When the pandemic was declared, safeguarding the health and safety of pharmacy staff was paramount to ensuring patients continued to receive their medications and critical clinical and product support services without interruption. An immediate evaluation of pharmacy access points was performed with mobilization of patient-facing, call center staff to work from home to mitigate the risk of exposure for pharmacy personnel who must be on site, and dispensing, shipping and delivery redundancies were built into operating processes. This was a significant change and challenge for most. The need for increased supply chain flexibility and the expanded use of technology to communicate with patients and health care providers was also quickly realized and implemented. The use of text messaging, portals and online and contactless services increased and continues to be refined to meet our rapidly evolving needs as the pandemic continues. These changes are likely to persist and transform the industry in the future.
As a result of the pandemic, other changes that may reshape the specialty pharmacy channel include:
- Specialty prescriptions and home infusions may increase. Shelter-in-place mandates and stay-at-home orders have been the catalyst for prescribers switching to oral agents, self-injectables and home infusions as opposed to office-administered medications. Patients have become accustomed to the convenience and appreciate the reduction of potential exposure in the clinic setting.
- Since the lockdowns began in March, millions of Americans have filed unemployment claims, and many have lost employer-sponsored insurance. This may result in a substantial spike in Medicaid enrollments and a shift in payer type for pharmacies, with potential implications on reimbursement and revenue.
- The administration issued guidance that expands the role of pharmacists, permitting them to order and administer COVID-19 tests. The administration also announced a partnership allowing pharmacies to administer COVID-19 vaccines when approved by the FDA.
- Commercial insurers and ehe Centers for Medicare and Medicaid Services have relaxed their historically strict rules, allowing 90-day fills in some cases, and prior authorization requirements during the pandemic. CMS has also allowed reimbursement for out-of-network pharmacies and home deliveries.
These changes have been positive and have allowed the specialty pharmacy industry to concentrate its focus on ensuring patients continue to receive their life-saving medications and essential product support services without interruption. However, the durability of these changes depends on federal, state and client guidance, as well as other factors.
In addition to managing the ongoing COVID-19 crisis, as specialty drug development and costs continue to increase, several ongoing and emerging trends present additional opportunities and challenges and will continue to have a substantial impact on the specialty pharmacy industry and National Association of Specialty Pharmacy members.
- Declining reimbursement rates and direct and indirect remuneration (DIR) fees. Though the specialty pharmacy industry has grown substantially, labor and drug costs have increased, and reimbursements from health insurers and pharmacy benefit managers continue to decrease. Another challenge faced by the industry is DIR fees. Some Medicare Part D plan sponsors and their PBMs collect retroactive clawback charges from specialty pharmacy providers and other pharmacies. These fees are collected months after the pharmacy has dispensed the drug and after a beneficiary has purchased the drug. CMS data shows that such fees on pharmacies grew more than 45,000% between 2010 and 20171.
- Limited distribution networks. These networks restrict the distribution channel for a specialty drug to one or a very small number of pharmacies. This strategy has advantages and disadvantages. It may help ensure the safe distribution of high-risk drugs to small patient populations, but it limits competition among specialty pharmacies and also creates access challenges for patients and health care providers.
- Managed care access and carve-outs. Health plans and payers continue to limit access to pharmacy network participation, as well as carve out and channel specialty drugs. Patients are forced to use specific specialty pharmacies, which can result in patients receiving medications from multiple pharmacies and not the pharmacy of their or their physician’s choosing. This can result in confusion and challenges for both patients and health care providers, who struggle to navigate complex health care benefits.
Though the industry faces many challenges, there are also many opportunities and advances that will improve the quality of patient care and continue to shape specialty pharmacy practice.
- Growth of the specialty pharmacy industry. Since the 1990s the number of specialty drugs available has increased exponentially and dominated new drug developments. This increase has been fueled not only by approvals in more common “specialty” diseases such as oncology and hepatitis, but in rare or orphan diseases as well.
- Drug pricing reform. Legislative and regulatory activity is under way to address the high cost of prescription drugs, including specialty drugs. Various policies under consideration would directly reduce drug costs at the point of sale — whether at the pharmacy counter or those directly provided to a specialty patient. For specialty patients, payment reform referred to as “pharmacy DIR reform” would bring immediate relief to specialty patients, reducing a senior’s co-pay costs on expensive therapies that do not have generic alternatives. Pharmacy DIR reform ensures all pharmacy price concessions are used by a plan to reduce a Medicare patient’s up-front cost. This reform also would promote quality and support specialty pharmacies’ continued ability to provide the high-touch, white glove support services that are needed to improve patient outcomes through drug management and that patients and providers have come to expect from specialty pharmacies.
- Generics and biosimilars and orphan drugs. Historically, there have been very few generic options for specialty medications. However, substantial investments in the development of generic specialty medications are being made, and it is expected within the next five years that alternatives to significant specialty drugs will be available. There are also many biosimilars in development. The availability of both biosimilars and generics will have a substantial impact on health care in general, and their use remains a potential strategy to lower drug costs.
- Orphan drugs. New treatments indicated for the treatment of rare diseases (also known as orphan drugs) are emerging at a pace much faster than most other drugs. Drugs for rare diseases now constitute a growing part of the pipeline and are expected to account for 22% of all prescriptions drug sales by 2024.3
While these treatments represent new and potentially life-altering options for the people who use them, they can be extremely expensive.
- Gene and cell therapies. Human gene therapy seeks to modify or manipulate the expression of a gene or to alter the biological properties of living cells to cure or treat disease. Cellular therapies are designed to replace or repair damaged tissue and/or cells may be used as part of a therapy or treatment for a variety of diseases and conditions. There are hundreds of cell and gene therapies at various stages of clinical development. By 2030, there could be 60 marketed cell and gene therapies treating about 50,000 patients per year at incredible cost with payers and employers scrambling to develop coverage logistics and financial solutions.
As the specialty pharmacy industry continues to evolve and change, one thing remains constant — the patient is at the center of all we do. Specialty pharmacies are integral members of the health care delivery team and will continue to adapt and evolve as needed, serving as medication and therapy experts ensuring patients living with chronic illnesses and complex medical conditions achieve superior clinical and economic outcomes, and expediting their access to care.
Sheila Arquette is the executive director at the National Association of Specialty Pharmacy.