Drug costs, and specialty drug costs in particular, keep rising faster than inflation, testing hospitals’ capacity to continue to treat patients with chronic, rare and orphan conditions. Partnering with an experienced specialty pharmacy such as Lumicera can help health systems rein in unsustainable costs.
These were insights shared during Becker’s 16th Annual Meeting at an executive roundtable discussion sponsored by Lumicera Health Services. The discussion was led by Eric Huckins, Lumicera’s Chief Growth Officer.
Here are three key takeaways from the session:
1. Health systems pharmacies face multiple challenges
Hospitals and health systems face multiple challenges. Among them are margin compression, especially for 340B entities. There are new regulations, fewer patients covered by Medicaid, reduced Medicaid payments, rising expenses and decreased reimbursement.
Research shows that more than 75% of health system specialty pharmacy leaders cite payor network lockouts as the number one barrier preventing the ability to care for their own health system’s patients through their in-house specialty pharmacy program.
“We’re seeing fewer and fewer levers that health systems can pull to take care of their patients,” Mr. Huckins said. “Health system pharmacies are doing all the work — referral coordination, prior authorization, wraparound care and management of the patient, but then can’t even dispense the medication to their own patients.”
2. Hospital pharmacies are rethinking their specialty drug strategies
Historically, hospital and health system leaders viewed pharmacy as a cost center, operating out of the spotlight, perhaps in the hospital’s basement. But increasingly, pharmacy is being seen as strategically important and as a revenue and growth opportunity.
That’s because the patient journey has changed, with innovative new specialty drugs often provided on an ongoing basis for patients with chronic diseases. According to Mr. Huckins, more than 50% of U.S. drug spending — $435 billion out of $805 billion — is on specialty drugs. Additionally, specialty drug spending is growing 9-10% per year and 80% of new drugs in the pipeline are specialty drugs.
“Less than 2% of the patients your organization services will likely need specialty treatments, yet they will account for more than half of your drug spend,” said Mr. Huckins. “The opportunity is massive.”
The spending and growth of specialty drugs is causing hospitals to view this as an opportunity to rethink their strategy. The most common ways organizations are pursuing this opportunity are through strategic partnerships, transactional outsourcing and building their own programs.
3. Lumicera helps health systems achieve specialty pharmacy success
Lumicera’s health systems services are framed in the core principles of transparency and stewardship. Lumicera partners with and helps health systems grow their specialty pharmacies, increasing access to specialty medications and affordability. Lumicera has extensive operational and accreditation expertise, leverages advanced technologies and helps health system pharmacies create customized, integrated specialty pharmacy programs. Lumicera helps health systems turn their pharmacy program from a cost center into a profit center, all while enhancing patient outcomes and quality.
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