What IDN and IHS leadership needs to know before launching an integrated specialty pharmacy

Senior leadership of integrated delivery networks and health systems believe there is value in in-house specialty pharmacy, based on numerous, ongoing attempts to create their own.

According to Adam Fein, 47% of hospitals with more than 600 beds operated a specialty pharmacy in 2016.

However, before an IDN, IHS, hospital board or CEO directs his or her CFO or COO to build an integrated specialty pharmacy, here’s what they should know.

Build a robust, long-term patient engagement and care management plan
Once a patient leaves the friendly confines of your hospital or other health system location, their adherence levels to prescribed therapies will almost certainly fall off to the national average. Excellence in adherence has long been tied to improved outcomes. Keep them adherent and keep them from contributing to increases in your readmission rates. Are you prepared to track adherence measures? How many staff members, and what types - including PharmDs - will you need to stay connected with those patients so that they take their prescriptions as indicated?

According to the frequently cited study that first appeared in the Annals of Internal Medicine, up to 30 percent of medication prescriptions don’t get filled and up to 50 percent of patients fail to take their medications as prescribed. The result: poor outcomes and as much as $300 billion in wasted healthcare spending.

30 percent gains in adherence over the standard of care like the ones we deliver for a cohort of IBD patients at Johns Hopkins do not come easily, and Johns Hopkins has their own integrated specialty pharmacy. Here’s something else to consider: do you know how many CMS quality measures relate directly to pharmacy and pharmacy services? Hint: it’s more than 10.

Given your connection to the patient, IDNs and health systems have more control over their access to and relationship with the patient. Pharmacy adds a labor-intensive layer of complexity if it is to succeed in terms of improving patient health outcomes, improving quality metrics and making a positive financial impact.

Your entry into specialty pharmacy is a double-edged sword for pharmaceutical manufacturers
For obvious reasons, getting as close as they possibly can to prescribers is a boon for specialty pharmaceutical manufacturers. But for those considering building an integrated pharmacy, carefully evaluate how much time and treasure it takes to attain and retain the requisite URAC and ACHC accreditations to operate in the specialty pharmacy space, as well as what it takes to participate in limited distribution networks.

Of equal importance to ask, with so many specialty drugs on limited distribution lists, will you actually be able to fill the prescription as written? Pharmaceutical manufacturers use limited distribution networks of select specialty pharmacies in part to help balance patient access with patient safety. Once established, manufacturers strongly dislike adding to these networks as, in addition to potentially loosening tight reins on patient safety, it creates a dilution of value and margin reduction for the specialty pharmacies that are often just scraping by.

Expect immense pressure internally for bringing your IHS- or IDN-integrated specialty pharmacy into the network but realize this puts manufacturers at risk of alienating their current distribution partners.

The problem with PBMs for IDN & IHS specialty integration: it’s all about access for patients
There is a significant difference between getting a prescription written and getting it filled. Patient access to medication therapy has everything to do with the PBM. Just because a doctor in your health system writes a prescription for a specialty drug does not mean your health system’s specialty pharmacy will get to fill it. It’s all about what’s on formulary and those limited distribution networks.

The integration of specialty pharmacy into hospitals and IDNs is materially changing the field for every party concerned. Will hospitals build, buy or partner when adding specialty pharmacy services? With so many entities opting to “build,” the impacts on patient outcomes and bottom lines will be fascinating to see given the associated hefty risks and requirements. How will manufacturers neutralize the impact on existing limited distribution partners of adding hundreds of hospitals and hundreds of thousands of patients? And will PBMs be forced into paying more for prescriptions that originate from a hospital with its own specialty pharmacy?

We don’t know the answer to many of these questions, but health system and IDN leaders who venture into the specialty pharmacy operation business should do so cautiously and thoughtfully. It is a grind through which value is derived by putting the patient at the center of every conversation and focusing on adherence to deliver value-based results for all parties concerned.

About the author:
Marc O’Connor is chief operating officer for Curant Health. Curant Health provides medication management, patient support, care coordination and pharmacy fulfillment services for patients nationwide.

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