Final week, we documented the substantial focus of shelling out revenues for specialty medicine. See The High 15 Specialty Pharmacies of 2023: Market Shares and Revenues on the Largest PBMs, Well being Plans, and Independents.
At present, we study how producers’ specialty networks contribute to this focus. In DCI’s unique evaluation beneath, we present that specialty pharmacies affiliated with pharmacy profit managers (PBMs) play an outsized function in manufacturer-designated shelling out networks.
A typical community incorporates about 5 specialty pharmacies—however one in three specialty merchandise with a manufacturer-designated community incorporates solely a single specialty pharmacy. In these unique networks, impartial and smaller specialty pharmacies are the massive winners.
Learn on for DCI’s up to date profile of specialty networks—and ponder why smaller pharmacies are profitable the battle for unique networks.
MEMBERS ONLY
Producers usually restrict and handle the specialty pharmacies eligible to dispense specialty medicines. A producer can undertake one in all three fundamental pharmacy channel methods for its patient-administered specialty medicine:
- Open distribution. This channel technique doesn’t explicitly distinguish between specialty and conventional medicine. All pharmacies have entry to open distribution merchandise as a result of they are often bought from a full-line wholesaler. Subsequently, wholesalers can stock, promote, and distribute these specialty merchandise as they’d conventional, nonspecialty medicine. By way of open distribution, the producer doesn’t restrict the variety of pharmacies that may dispense its product.
Retail and different pharmacies have the best entry to such open distribution specialty merchandise as a result of they are often bought from a full-line wholesaler. Well being plans and PBMs, nevertheless, sometimes restrict retail pharmacies’ capacity to dispense these open distribution merchandise.
- Restricted shelling out community. On this strategy, pharmaceutical producers restrict the variety of specialty pharmacies approved to dispense their specialty merchandise, by specifying the pharmacy areas eligible to dispense its product. Producers choose pharmacies with the distinctive capabilities required to serve sufferers, suppliers, and payers effectively and successfully. Pharmacies which can be excluded from a producer’s community are unable to buy and dispense a specific specialty product.
- Unique shelling out community. In some instances, the producer could designate just one pharmacy to dispense to the complete affected person inhabitants. An unique community is usually used when the affected person inhabitants is small, the sufferers want intensive product-specific companies, or the product has important questions of safety.
For extra on the specialty pharmacy market and the methods behind producers’ community selections, see Chapter 3 of our 2024 Financial Report on U.S. Pharmacies and Pharmacy Profit Managers.
BEHIND THE VELVET ROPE
To characterize producers’ specialty pharmacy networks, we relied on IPD Analytics’ Entry Hub platform, which features a Restricted Distribution Drug Community Monitoring providing. This distinctive database tracks a broad universe of specialty medicine and their pharmacy networks. To the bext of our data, there isn’t any comparable useful resource accessible for analyzing specialty pharmacy networks. To find out about this database and how one can get entry, please contact Tim Powers (tpowers@ipdanalytics.com).
As of January 2024, IPD Analytics tracked 364 specialty medicine with a manufacturer-defined restricted or unique specialty pharmacy community. We analyzed these knowledge to establish the quantity and id of specialty pharmacies in every product’s community. Merchandise with a number of routes of administration or formulation, e.g., capsule vs. pill, had been handled as a single product. In all instances, the specialty pharmacy networks had been similar no matter drug formulation.
IN THE CLUB
The chart beneath summarizes the specialty pharmacy community measurement for 364 specialty medicine.
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In step with our earlier evaluation, the common manufacturer-defined community has 5 specialty pharmacies.
Nevertheless, this common disguises substantial variability in community measurement:
- One in three specialty medicine (33%) have unique shelling out networks, with solely a single specialty pharmacy.
- An extra 34% of networks have small, however nonexclusive, networks with two to 4 pharmacies.
- Multiple in 5 specialty medicine (22%) have networks with 5 to 10 specialty pharmacies. The common community measurement for these merchandise is seven pharmacies.
- About one in eight merchandise (12%) have a comparatively bigger community of 11 to 25 specialty pharmacies. The common community measurement for these merchandise is 15 pharmacies.
VIP STATUS
There have been greater than 150 distinctive pharmacies that participated in at the very least one of many 364 specialty medicine’ networks.
Exhibit 63 of our 2024 pharmacy/PBM report reveals the ten specialty pharmacies with the best entry to specialty medicine with a manufacturer-defined restricted or unique specialty pharmacy community.
In contrast, smaller and impartial specialty pharmacies have a lot larger illustration in producers’ unique specialty pharmacy networks. The chart beneath identifies the businesses designated as the only real specialty pharmacy community participant for the one-third of merchandise with unique networks.
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As you’ll be able to see, the 2 largest PBMs had entry to solely one-quarter of all merchandise with solely a single specialty pharmacy.
Nevertheless, a majority of merchandise with an unique community depend on a specialty pharmacy that isn’t affiliated with a PBM. McKesson’s Biologics and RxCrossroads pharmacies accounted for 17% of the exclusive-network medicine, whereas PANTHERx Uncommon Pharmacy accounted for an extra 11% of those merchandise. AllianceRx Walgreens Pharmacy, BrightSpring’s Onco360, and different non-affiliated pharmacies accounted for an extra 38% of the medicine.
TIP THE BOUNCER
After producers set up a specialty community, well being plans and plan sponsors usually additional slender the community by requiring sufferers to make use of the specialty pharmacy that the plan or PBM owns and operates. This additional contributes to the focus of shelling out revenues with the biggest PBMs, particularly when mixed with producers’ shelling out community methods proven above.
However when a producer makes use of an unique community, the smaller pharmacies have to be included in a PBM’s community. Constructing the capabilities and methods to service an unique community has allowed some smaller specialty pharmacies to retain community place and develop extra shortly than the general market.
When requested for recommendation on easy methods to be well-known, Steve Martin as soon as opined: “Be so good they cannot ignore you.” Sage recommendation for getting right into a nightclub or a producer’s specialty pharmacy community.
