First, what exactly is Specialty Pharmacy?

Specialty pharmacy can be defined in many ways. The National Association of Specialty Pharmacy (NASP) defines it as "Specialty Pharmacy's patient-centric design provides a comprehensive and coordinated model of care for patients. The medications and expert services that specialty pharmacies provide expedite patient access to care, ensure appropriate medication use, and achieve superior clinical and cost-effective outcomes." (nasp.org) Yet, Medicare uses a monthly cost of $670 or greater to designate a specialty medication. To add more confusion to the mix, The Academy of Managed Care Pharmacy (AMCP) points out distinctions of specialty to traditional pharmacy services with "Specialty pharmacies are distinct from traditional pharmacies in coordinating many aspects of patient care and disease management. They are designed to efficiently deliver medications with special handling, storage, and distribution requirements with standardized processes that permit economies of scale. Specialty pharmacies are also designed to improve clinical and economic outcomes for patients with complex, often chronic and rare conditions, with close contact and management by clinicians." https://www.pharmacytimes.com/publications/specialty-pharmacy-times/2013/nov_dec-2013/what-is-a-specialty-pharmacy

So, what is the correct definition and how do we further interpret this?

Really, they are all correct as there is not one single source of truth for the definition. Specialty pharmacies do all the services noted above for those patients that are chronically ill, covering a wide range of disease states and the costs of these medications can vary greatly. However, not all specialty pharmacies operate in the same way. Some specialty pharmacies can support all the disease states and service all 50 of the United States, while others might be more disease state focused or with just a regional ability to dispense. The differences in specialty pharmacies, the disease states they serve, and the associated definitions take on many shapes and sizes and is perhaps the reason it is so difficult to agree on one definition.

GROWTH
One thing that everyone seems to agree on is that specialty pharmacy is growing!

"Growth in revenue for specialty drugs is outpacing the growth in revenue for traditional drugs," according to data from IQVIA, and "U.S. specialty pharmacy industry revenues have grown from 34.9 percent of the pharmacy industry in 2014 to 45.4 percent in 2018", June 1, 2020.

The continued development of therapies for the chronic disease states has led to much of the growth in the specialty pharmacy segments.  These new drugs often require a higher tracking of patient clinical data, side effects and outcomes, all of which fall into the services that specialty pharmacies are designed to support.

How does Specialty fit into 340B?

Specialty pharmacies can also act as a 340B contract pharmacy, rendering savings for qualified patients back to the covered entity.  Because the costs of these medications are typically higher than in traditional retail pharmacy, the savings may also be greater.  As with any 340B contract pharmacy relationship, the covered entities must choose pharmacies that are being utilized by their patients to render savings back to their 340B program.

Covered Entities that have their own in-house specialty pharmacy may also support the entities’ 340B savings programs.  Whether an in-house or a contract pharmacy, the covered entity must ensure that proper policies and processes are in place to support the compliance of their 340B program.

Why is Specialty important to Covered Entities?

As specialty continues its upward market share of pharmaceutical spending, it will be a focal area for Covered Entities participating in 340B to include in their 340B programs.  Since more drugs will be specialty in the years to come, covered entities will be able to capture savings for qualified patients using these medications when contracted with specialty pharmacies.  Covered entities that have not already started to build a specialty contract pharmacy network may want to consider doing so to help their 340B program continue to thrive in the future.

For more information on how we can help, contact us or read more about Specialty.

The content in this blog is for informational purposes only and is not intended to be used in place of regulatory guidance. The opinions and views expressed herein are those of the authors and do not necessarily reflect the official position or opinions of SUNRx or any regulatory authority. Furthermore, some content may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner, but which we believe constitutes a "fair use" of any such copyrighted material as provided for in Section 107 of the US Copyright Law. We are making the information herein available in our efforts to advance understanding of the 340B program and its offerings. These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.