Specialty pharmacy

Specialty pharmacy refers to distribution channels designed to handle specialty drugs — pharmaceutical therapies that are high cost, high complexity or high touch. High touch refers to higher degree of complexity in terms of distribution, administration, or patient management which drives up the cost of the drugs. In the early years specialty pharmacy providers attached "high-touch services to their overall price tags" arguing that patients who receive specialty pharmaceuticals "need high levels of ancillary and follow-up care to ensure that the drug spend is not wasted on them." An example of a specialty drug that would only be available through specialty pharmacy is interferon beta-1a (Avonex), a treatment for MS that requires a refrigerated chain of distribution and costs $17,000 a year. Some specialty pharmacies deal in pharmaceuticals that treat complex or rare chronic conditions such as cancer, rheumatoid arthritis, hemophilia, H.I.V. psoriasis, inflammatory bowel disease (IBD) or Hepatitis C. "Specialty pharmacies are seen as a reliable distribution channel for expensive drugs, offering patients convenience and lower costs while maximizing insurance reimbursements from those companies that cover the drug. Patients typically pay the same co-payments whether or not their insurers cover the drug." As the market demanded specialization in drug distribution and clinical management of complex therapies, specialized pharma (SP) evolved.„ Specialty pharmacies may handle therapies that are biologics, and are injectable or infused (although some are oral medications). By 2008 the pharmacy benefit management dominated the specialty pharmacies market having acquired smaller specialty pharmacies. PBMs administer specialty pharmacies in their network and can "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."

In the mid 1990s, there were fewer than 30 specialty drugs on the market, but by 2008 that number had increased to 200.

History

Specialty pharmacies initially served a limited number of people with a small number of high-cost, low-volume, and high-maintenance conditions, such as hemophilia and Gaucher's disease.

In 1991 the FDA approved the first version of Genzyme's orphan drug alglucerase, the only treatment for Gaucher's disease. At that time, according to Genzyme CEO Henri Termeer — a pioneer in the biotechnology industry business model — one treatment of Ceredase for one patient took 22,000 placentas annually to manufacture, a difficult and expensive procedure.