Biotechnology Healthcare - July/August 2008 - (Page 51)

SPECIALTY PHARMACY says Thom Stambaugh, RPh, chief pharmacy officer for CIGNA Pharmacy Management, in Bloomfield, Conn. “We’ve been preparing for several years for specialty costs to drive pharmacy trend, and 2007 was the first year that actually began to occur.” CIGNA Pharmacy Management uses an integrated medical, pharmacy, and behavioral approach not only to improve the health of members who require specialty medications, but also to control healthcare costs for both members and plan sponsors. “We deliver a ‘return on health’ through clinical integration,” says Stambaugh. dustry’s profitability grew exponentially. Today’s marketplace is dominated primarily by traditional pharmacy benefit managers that have merged with previously existing specialty pharmacies, or those that are retail-based or insurer-owned. These organizations typically have the muscle to negotiate better prices and frequently offer a complete menu of specialty pharmaceuticals and related services to serve as an attractive “one-stop shop” for health plans and employers. EVOLVING MARKETPLACE Despite the U.S. Food and Drug Administration’s apTHE EARLY YEARS parent increased caution in its approval of new biotech In its infancy, specialty pharmacy was truly a niche indrugs, no one foresees the specialty pharmacy marketplace dustry, serving a limited number of to slow down in the near future. The patients with a small number of highcomplexity of specialty pharmacy — 5 PARTS THIS, cost, low-volume, and high-mainteand the dollars attached to it — means 37 PARTS THAT nance conditions, such as hemophilia that payers at every level will need to In 2007, the 14 percent increase in and Gaucher disease. Companies like examine their overall specialty pharspecialty drug trend was attributed Stadtlanders emerged, in some cases, macy spending trends and make smart to three factors: due to timing and good fortune. decisions about key sticking points, New medications As expensive lifesaving therapies including the following: 4.9% became available, paperwork and The “value” of value-added serIncreased treatment costs posed an issue to pavices. Since its infancy, specialty costs 37.4% tients who retrieved these prescrippharmacy providers have attached tions from retail stores. Locations did high-touch services to their overall not always have these costly drugs in price tags. The rationale goes that paIncreased stock, and most requested that patients who receive specialty pharmautilization 60.4% tients pay for their drugs up front and ceuticals will need high levels of ancomplete insurance paperwork — in cillary and follow-up care to ensure most cases, for Medicare — to sethat the drug spend is not wasted on Source: Express Scripts 2007 Drug Trend Report cure reimbursement. Even in cases, them. But as more and more of these for example, where patients needed services are piled on, how do you figimmediate access to therapies to prevent organ rejection, ure out which are worth the investment and which are most did not have the money for such payments, nor did merely a waste of money? they have the expertise they needed to complete the forms. Does size matter? What does a benefits manager at a Specialty pharmacies like Stadtlanders responded by 5,000-employee company need to know about specialty filling out the paperwork for patients and coordinating pharmacy and how should he or she go about getting the benefits to eliminate the potentially enormous out-ofnecessary information? How about at a 500-employee pocket costs. The pharmacies also coordinated referrals company? A 50-employee company? from hospital discharge planners and delivered the mediSqueezing out the little guy. Small independent specation to the patients’ homes to allow therapy to begin imcialty pharmacies drove the initial growth of the industry, mediately upon hospital discharge. These pharmacies but the Stadtlanders of the world are largely a dying species. grew through word of mouth; nurses and physicians heard Is there a niche still left for creative entrepreneurs in spefrom their patients about the “special services” provided cialty pharmacy? Does the little guy still have any value to by these pharmacies and started to refer patients in simipayers? lar predicaments. In future issues, we will take an in-depth look at each of Several cities in the United States had their “Stadtthese topics to help readers pick through the complex web landers” — companies that saw an opportunity in an of specialty pharmacy. Current trends mandate that it is no emerging market and rode the wave of growth. Although longer an area anyone can ignore. niche independents still exist in certain markets, the majority of smaller specialty pharmacies were, over the years, Scott Kober is a freelance writer in Philadelphia specializing in medical issues. gobbled up by a variety of national competitors as the inJULY/AUGUST 2008 · BIOTECHNOLOGY HEALTHCARE 51

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

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.