A rise in the use and cost of lifesaving specialty medications is forcing hospital leaders to consider new strategies to better manage them.
Hospital and health system leaders often believe that having an accredited specialty pharmacy is the best — or only — way to manage this growing area of their pharmaceutical spend, but there are other options hospital leaders should consider before taking on this demanding model, explained Michael Brown, RPh, vice president of Managed Services at Dublin, Ohio-based Cardinal Health.
Here, Mr. Brown highlights three fundamental questions that hospital leaders should ask before developing their outpatient specialty pharmaceutical strategy to better prime their organizations for success.
Editor's note: Responses have been edited for length and clarity.
Ask: "Have we first optimized our existing outpatient pharmacy model?"
Michael Brown: This is the first question I always start with. The reality is that a specialty pharmacy is much more complex than an outpatient pharmacy model. If your current outpatient pharmacy isn’t operating efficiently, it's going to be really difficult to manage, let alone optimize, a a specialty pharmacy. You must ensure that your core pharmacy is running well before engaging in an endeavor like jumpstarting a specialty pharmacy for several reasons.
A specialty pharmacy operation puts a premium on your workflow in terms of IT implementation and staffing excellence. It often requires staffing upgrades because there's a lot of clinical integration, patient support services and collecting and reporting of data that’s required. Put simply, there's just going to be a lot more management requirements compared to a traditional pharmacy operation and you really need to understand these requirements. Without the foundation of a strong outpatient pharmacy, you won't be able to manage the complexities of a specialty pharmacy operation. These are complementary models that should co-exist and not be treated as separate operations at your hospital.
Ask: "Have we thoroughly evaluated our patient population?"
MB: This question gets down to the business case for accreditation. Does it make economic sense for you to build a specialty pharmacy or expand your outpatient pharmacy to offer specialty services? Administrators need to consider things like their patient demographics, what prescriptions are typically written, what kind of disease states are common, etc. Oftentimes, I break it down and advocate for first starting with the employee population and then encourage administrators to think through several key questions like: Is there a cost-benefit opportunity with current staff? Are our employees a part of our health plan?
You also want to look at payer mix. Most of the facilities where there are opportunities for a specialty operation typically are eligible to participate in the 340B Drug Discount Program. If that's the case, then by definition, their payer mix is more of a Medicare-Medicaid model rather than commercial or self-pay. Eligibility for 340B really improves your return on an investment for a specialty pharmacy.
Ask: "Have we considered the other options — besides accreditation — available for customizing a specialty model that best complements our organization?"
MB: Specialty pharmacy offerings are really on a spectrum. There are other ways that your facility can offer specialty medications to patients and capture specialty pharmacy revenue. For example: Do you have strong contract pharmacy relationships in your current model, including specialty medications? Hospitals may be able to leverage these contract pharmacies to help support their specialty operations.
Another method in lieu of building a fully accredited specialty pharmacy is to solicit a pharmacy benefit manager (PBM) in becoming part of its network. While this is often difficult to do because PBMs make a lot of their money from their own specialty pharmacies, what you're trying to do is to avoid the expense of getting a fully accredited specialty pharmacy. Something to keep in mind, however, is that this approach also limits how much you can maximize your own specialty operation without accreditation. But again, your lens should be at trying to look at what's realistic and sensible for your unique organization.
A facility could also go directly to the drug manufacturers and bypass the PBM. A lot of studies demonstrate that hospitals and systems that are filling specialty prescriptions on site are increasing care continuity among patients and prescribers and therefore experiencing better patient outcomes. Manufacturers want to improve outcomes, so it’s another way of accessing specialty drugs that may have not been previously accessible, without pursuing specialty accreditation.
Conclusion
Before starting a specialty pharmacy operation, it’s crucial to thoroughly assess your current model and patient mix to evaluate accreditation alternatives that may more adequately address your organizational goals. You really need to do your due diligence to determine if it makes operational sense.
Learn more about customizing a specialty pharmaceutical strategy that is right for your organization in this April 29 webinar.