Specialty drugs treat complex or rare conditions such as multiple sclerosis, rheumatoid arthritis and cancer. Such drugs differ from traditional pharmaceuticals because they pose unique distribution and administration challenges, require tailored follow-up patient care to ensure strong outcomes, and are often defined1 as costing $600 or more per month.
Specialty drugs also reflect the leading edge of healthcare innovation and can provide meaningful therapeutic advances over existing treatments. As an example, for many years the available drugs for hepatitis C were not very effective and required long, complex treatment regimens. Left unchecked, hepatitis C is a progressive disease that destroys liver function leading to liver transplant or death. Today, there are specialty drugs that can cure most patients with hepatitis C. However, at around $30,000 per patient, these medications are expensive. If taken correctly, they can offer patients a lifetime cure. However, if not taken properly, the high cost of treatment is wasted.
The delivery of these medications, done through specialty pharmacies, once occupied only a small niche. However, in recent years it has grown substantially according to a report from the HDA Research Foundation2. As of 2016, specialty product sales rose to $181 billion and made up 40 percent of the overall $450 billion U.S. pharmaceutical market. According to Pew Research3, there were only 10 specialty drugs on the market in 1990. By 2015 there were more than 300, with hundreds more in development.
Coinciding with cost increases is the growth of specialty pharmacies that dispense these high-cost, high-touch drugs and provide much of the follow-on care management associated with the treatment. Both pharmaceutical manufacturers and payers want assurances that high priced specialty medications will be effectively managed, and they often require rigorous payment prior-authorization procedures, inventory management, treatment protocols and patient follow-up. Specialty pharmacies must meet one or more accreditations verifying their capabilities before being approved to dispense the most advanced specialty drugs.
To meet the demands of these new, expensive and complex medications, drug manufacturers and payers have traditionally limited distribution of the newest, most expensive drugs to a small number of pharmacies. In theory, limited distribution helps ensure controls are in place to manage these complex medications effectively. These specialty pharmacists work within a variety of settings, including the national big-box pharmacies, super-regional specialty pharmacies and boutique pharmacies dedicated to specific therapeutic areas. Traditionally, hospitals and health systems have not had a significant presence in dispensing limited distribution specialty pharmacy medications.
An unintended side-effect of the limited distribution approach is that the care provided by these pharmacies is largely disconnected from the care provided by the patient’s regular physicians. Patients undergoing treatment with specialty medications frequently have multiple conditions that require coordination and management. When specialty treatment protocols are managed by a specialty pharmacy unrelated to the prescribing physician, it increases the risk of care fragmentation, poor coordination and gaps in care that can result in product waste, medication errors and problems with medication adherence.
To help ensure care is effectively managed across all care settings, health systems and provider groups have organized their physician clinics, hospitals and post-acute care services into Integrated Delivery Networks (IDNs) that coordinate all activities through a shared electronic health record. Given the growing prominence of specialty medications in health care delivery, IDNs are pursuing solutions to help ensure that the care associated with specialty medications is also integrated with other healthcare services.
IDNs that employ large numbers of specialty physicians are making investments in systems, processes, staffing and certifications that have traditionally been the province of limited distribution pharmacies. Their goal is to meet the requirements of limited distribution specialty pharmacy care, while also seamlessly integrating specialty medications into other IDN care management services. Where it is not feasible for IDNs to dispense specialty medications through their own specialty pharmacy, IDNs are contracting with selected limited distribution specialty pharmacies that agree to provide data back to the IDNs to enable monitoring of adherence rates and clinical outcomes for their patients.
Once IDN specialty pharmacies have met the accreditation requirements, certifying that they have the necessary systems and procedures in place to dispense specialty medications, they may still face barriers in gaining access to specialty distribution. Payers, manufacturers, prescribers and patients want evidence that the integrated care model provided by IDNs can exceed the standards for cost, quality and controls of established limited distribution channels.
Intuitively, IDNs should be extremely well positioned to provide seamless care coordination between prescribing physicians and pharmacists through a shared electronic health record. IDNs also have access to encounter, clinical and cost data that can provide payers and manufacturers with a complete picture of medication efficacy and treatment outcomes in a real-world setting. However, data alone is not enough.
IDNs require concrete, actionable insights enabled through advanced analytics. The data collected by IDNs throughout the patient’s care journey may reside in some combination of electronic health record systems, claims data, dispensing systems and specialty care management systems. These data sources also need to be augmented with external sources, such as community fill data and best practice benchmarks to provide insights into key success measures such as time between diagnosis and treatment, medications orders that were written and not filled, the time between orders and fills, and medication adherence rates. In addition, IDNs need to correlate how treatment protocols and adherence rates impact clinical measures such as readmissions, hospitalization rates, ED visit rates and episode costs on a risk adjusted basis. Different specialty medications may further require the tracking of therapy-specific outcomes that integrate lab results and other outcome data found in the electronic health record.
In summary, IDNs are well positioned to deliver the kind of comprehensive care necessary for successful management of specialty patients. Inclusion of specialty medication management will be of increasing importance to IDNs – particularly as they assume more risk-bearing contracts under value-based care. IDNs have the clinical data across care settings and medical specialties to reduce the risk of miscommunications and information gaps that can otherwise contribute to medication adherence failure. If effective collaboration is combined with analytics and outcomes, IDNs have the potential to deliver superior outcomes and increase the value to patients, payers and manufacturers.
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Loopback Analytics enables health systems to proactively identify at-risk populations, match patients to appropriate services and evaluate the impact of interventions on outcomes. The Loopback platform allows provider organizations to selectively and securely share data with network partners across care settings to coordinate care beyond the walls of their owned facilities while protecting data that should not be shared. Real-time data analytics monitor patients as they move across the care continuum and predictive analytics flag patients of rising risk for early intervention. Data collected from patient engagement loops back into machine learning models to provide timely visibility into what is working and what is not, to enable continuous improvement.
1 http://www.pewtrusts.org/~/media/assets/2016/12/specialty_drugs_and_health_care_costs.pdf
2 https://www.hda.org/news/2017-12-12-hda-research-foundation-releases-2017-specialty-pharmaceutical-distribution?&p=1
3 http://www.pewtrusts.org/~/media/assets/2016/12/specialty_drugs_and_health_care_costs.pdf
