Hospitals and health systems are rapidly expanding into specialty pharmacy, doubling their footprint over the past several years as they seek greater control over high-cost drug distribution and revenue streams, according to a May 5 Drug Channels report.
The shift reflects broader vertical integration strategies, as providers move to internalize pharmacy services amid changes to the 340B program and increasing competition from pharmacy benefit managers and retail chains.
Here are six notes from the report:
- Hospital- and health system-owned specialty pharmacy locations grew from 106 in 2017 to 553 in 2025.
- Providers now account for 28% of all accredited specialty pharmacy locations, up from 15% in 2017.
- Independent specialty pharmacies have declined significantly, dropping from 59% of locations in 2015 to 29% in 2025.
- Hospitals are using specialty pharmacy as both a revenue driver and a strategic hedge against external pharmacy and payer pressures.
- The market remains highly concentrated, with the top three companies (CVS Specialty, Accredo/Freedom Fertility and Optum Specialty Pharmacy) generating about two-thirds of specialty prescription revenues.
- Growth is tied in part to the 340B Drug Pricing Program and shifting manufacturer policies around contract pharmacies.
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