Biotechnology Healthcare - July/August 2008 - (Page 50)

SPECIALTY PHARMACY The Evolution of Specialty Pharmacy Scott Kober, Contributing Editor I n 1992, Donald Vidic, RPh, MBA, began his career sidered to be — and may still be today — ‘acute’ condiin specialty pharmacy as one of the first handful of tions,” he continues. “The cost- and return-to-work results employees for Stadtlanders Pharmacy, a grassroots that we see with our employer group and insurance plan company that had recently moved to the fifth floor of customers of all sizes are dramatically improved after we a seven-story office building near Pittsburgh. In reality, he implement specialty pharmacy programs among their was coming in on the ground floor of a burgeoning inmemberships.” dustry. At the time of Vidic’s arrival, the menu of conditions TREND IS CLEAR seen among those patients that Stadtlanders served was While nonspecialty drugs plod along with year-to-year small — a few that were ancillary to primary therapy to spending increases of between 2 and 6 percent, specialty manage side effects, as well as HIV, transplant, and a new drug costs are zooming forward more than 10 percent angrowth area, multiple sclerosis (MS). That was pretty nually. An Express Scripts report projects the share of drug much it. spending devoted to specialty pharESPECIAL-TY STRONG TREND Unlike retail stores, the Stadtmaceuticals to increase from apTrend=utilization increases + price inflalanders model was focused more proximately 19 percent in 2006 to tion + market entry of new medications on chronic conditions with higher26 percent by 2010. As a result of PROJECTED TREND, 2008 TO 2011 than-average prescription prices, higher utilization owing to exNonspecialty Specialty and consequently, the company panded indications and to a blosachieved healthier revenues than soming pipeline, specialty phar25% many retail drugstores with high macy expenditures are expected to 20% volumes in lower margin drugs. reach $100 billion annually by 15% Several years later, the company 2010. If current trends continue, 10% expanded into a few more areas, by 2030, specialty pharmacy costs including growth hormones. In will exceed $1 trillion a year and 5% time, revenues surpassed $100 account for as much as 44 percent 0 million — and kept growing. By of a health plan’s total drug ex2008 2009 2010 2011 the time it was bought by CVS in penditures. Source: Express Scripts 2007 Drug Trend Report 2000, Stadtlanders was one of the Historically, specialty pharmalargest employers in Allegheny County. ceuticals have been loosely defined as any drug that reThat sort of growth really is an allegory of specialty quires “high-touch” service in the forms of distribution, adpharmacy itself. A decade ago, health plans and employer ministration, or patient management — all factors that groups were still pretty much able to ignore that little drive up costs for the purchaser or consumer. Over-theflag waving in their periphery because it had not yet sigcounter aspirin, for example, does not fit the definition of nificantly affected their overall spend. Each year since a specialty pharmaceutical, but interferon beta-1a (Avonex) then, however, specialty pharmacy has become harder — a $17,000-a-year product used to treat MS that requires and harder to ignore. And today, it is a semaphore that cana refrigerated chain of distribution — clearly does. not be avoided. Whereas in the mid 1990s, when fewer than 30 specialty “Payers and employers are becoming acutely aware of drugs were on the market, there are more than 200 spewhat the specialty spend does to their overall trend,” notes cialty pharmaceuticals available today. Some treat relaVidic, now vice president of operations for McKesson tively common conditions, such as rheumatoid arthritis, Specialty Pharmacy, headquartered in Pittsburgh. “The hepatitis C, and MS; others treat uncommon conditions, adage of ‘1 percent of the population, 30 percent of the such as pulmonary arterial hypertension and severe comdrug costs’ is something that will affect even a 200bined immunodeficiency. A decade from now, more than employee company. It might just be 2 people out of 200 400 specialty products are expected to be handled by spewho drive those costs, but depending on the therapy, those cialty pharmacies. There’s that semaphore again. costs could be significant to their bottom line. “We’re seeing more interest and questions about spe“People are going to live longer with what were concialty pharmacy from employers and their consultants,” 50 BIOTECHNOLOGY HEALTHCARE · JULY/AUGUST 2008

Table of Contents Feed for the Digital Edition of Biotechnology Healthcare - July/August 2008

Biotechnology Healthcare - July/August 2008 Openers Contents Editorial/David B. Nash, MD, MBA Drug Track Health Plan Confidential Rheumatoid Arthritis A Decade of Trial, Error, False Starts, and Hope What Path Will Comparative Effectiveness Research Take? RA Therapies in Development: A New Generation of Relief Assessing the Full Impact of RA on Employers and Payers Stem Cells: Health Insurance You Can Bank On Specialty Pharmacy Employer to Employer Personalized Medicine Trends Clinical Briefs

Biotechnology Healthcare - July/August 2008

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