September 23, 2015

How Special are Specialty Pharmaceuticals?

by Beverley Herczegh, Director

This is a question worth consideration. Maybe you know someone who has his or her life back because of a life-restoring protein: when the body fails, it feels like a betrayal, and to be rescued from that edge is indeed special.

The definition of a specialty pharmaceutical depends on who you ask, but there seems to be some alignment on the following key characteristics:

  • High cost
  • Disease-modifying effects
  • Small target patient group
  • Small and knowledgeable prescriber base
  • Biological focus (often but not always)

While it is impossible to put a price tag on health, or on life itself, the cost of specialty pharmaceuticals is substantial. These therapies, with double-digit growth in spending, are disrupting the marketplace across many therapeutic areas as payers seek ways to fund these treatments. Both payers and manufacturers use specialty pharmacies to handle reimbursement and manage patient pathways, often with divergent objectives and, in some cases, with mutually exclusive networks.

While it may seem that the handling of specialty products is outside the realm of your typical community pharmacy, my experience in pharmacy challenges this preconception.

In the early 2000s, I worked in a typical community pharmacy located near a physician’s office that offered infusions. Our pharmacy provided the medication for most of the patients. This involved managing reimbursement, assignment of benefits, reminder calls, pre-infusion health screenings, and follow-up calls; we were providing a specialty service. The work became routine, and we had unfailing support from the manufacturer. It was rewarding to see patients’ lives changed.

The Conference Board of Canada’s 2013 document, Reducing the Health Care and Societal Costs of Disease: The Role of Pharmaceuticals, provides an analysis of projected prescription drug costs in Ontario for the next two decades. In regards to biologics, it reads as follows:

“For biologics, our analysis assumed that generics will not compete directly with branded biologics. However, the analysis did anticipate that the emergence of new biologics (including new biosimilars) will contribute to reducing the average cost of treatment by 62 per cent between 2012 and 2030.”1

Of course, this is an analysis. Who knows how right or wrong it is? But, this deflation should give industry pause. Depending on how current patient programs are funded and the nature of anticipated policy changes to public and/or private drug funding, there may be a need to examine some novel ways of supporting patients.

I would suggest that reimbursement, whether for specialty products or more traditional drugs, is not rocket science, and pharmacists are good at it. The same is true of compliance; this one is a challenge for everyone, but, if pharmacists want to engage patients, they can — they have the relationship. Some handholding will be needed for community pharmacy to participate, but the industry is good at supporting chosen health care providers. Some in the industry are testing the waters with retail pharmacy.

So, where does community pharmacy in Canada stand on specialty products? At this year’s Neighbourhood Pharmacy Association’s Conference, held in Quebec City from May 11 to 14, retailers, once again, demonstrated interest in participating in specialty pharmacy. After all, pharmacy profits have take a hit. We have heard this for a few years now. There are definitely retailers who have made the move towards specialty pharmacy, but it feels like the rest don’t quite know where to start. The single biggest issue for pharmacy in this area will be the provision of consistent service levels, which is an issue that affects the delivery of all pharmacist services.

Here are some factors that may mitigate the “specialness” of specialty drugs:

  • Drug delivery by injection has been demystified for pharmacists now that pharmacists across Canada can inject
  • Increasingly, biologics are available in ambient tablet form — no special storage or handling required
  • Electronic management of drug claims will simplify and direct the handling of reimbursement and support consistency of service through:

    • Automatic electronic authorization letters
    • Embedded guidelines
    • Electronic access to manufacturer support (both clinical and financial)
    • Step-by-step process guides
  • Growth in the volume of specialty drugs prescriptions may necessitate the use of the community pharmacy network in Canada

  • Patients do have the right to choose their pharmacy and, when possible, will exercise that right. This patient influence may, consequently, increase specialty product offerings in community pharmacies, excluding only the most specialized products
  • Precision medicine will be the new “specialty,” delivering us from treatment to cure

Might we see the specialization of specialty, whereby the products that require risk management programs, truly specialized handling, or timed reconstitution are also the products with limited and managed handling? This would leave a significant number of products moving at the community pharmacy level.

Employers in Canada may wish to pay for treatments needed by employees, but this is becoming a bigger challenge, and tactics around cost management will continue to evolve. Ultimately, the money has to come from somewhere, and some expect that an increase in patient co-pays will be necessary to manage plan sponsor premiums.

Aside from increased co-pays, expect to see a new selector: the patient who will decide based on price.

Reference: 1. Hermus G, Stonebridge C, Dinh Thy, et al: Reducing the Health Care and Societal Costs of Disease: The Role of Pharmaceuticals. The Conference Board of Canada, Ottawa, 2013.

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Originally published in Canadian Pharmaceutical Marketing June/ July 2015