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The Growth of Specialty Pharmacy: What Is the Impact on Patient Relationships?

September 2012, Vol 5, No 6

The past decade has seen a dramatic upsurge in the utilization of specialty pharmacies for all types of therapeutic modalities, including those for cancer. The cost of cancer care may rise from about $125 billion in 2010 to $207 billion by the end of the decade. By that time, specialty drugs are predicted to account for 2 of every 5 pharmacy dollars spent.1 The purpose of this article is to explain the evolution of the specialty pharmacy and the functions it can serve in the treatment of cancer and to discuss the potential benefits and challenges of the system from the point of view of the patient.

The Evolution of Specialty Drugs and Specialty Pharmacy
There is a lack of consensus on the definition of a specialty drug. The US Food and Drug Administration has not defined the term. Initially, the label was virtually synonymous with biotechnology products, either proteins produced by recombinant DNA techniques or monoclonal anti­bodies produced with cellular hybridomas, but this is no longer the case. The 2007 Medicare Modernization Act defined a specialty drug as “a part D drug with plan-negotiated prices that exceed $400 per month.”2 Other health plans may define specialty drugs differently. In general, they are high cost, administered by injection or infusion, require special handling, or are used for complex diseases that require special monitoring. In oncology, however, the most common agents dispensed by a specialty pharmacy provider (SPP) are the newer targeted agents that are administered orally. After a systematic review of the literature, one academic group of authors proposed the most critical descriptors of a specialty drug to be3:

  • High cost (prescriptions cost more  than $600 per month)
  • Difficult medication delivery, such as
    – Special handling requiring strict temperature control
    – Restricted location for medication preparation or distribution site
    – Restricted location for medication administration
  • Complex treatment maintenance, including
    – Personalized or frequent dosing, dosing adjustments, and administration protocols
    – Clinical management or patient support programs to monitor for serious side effects and adherence

The EMD Serono Specialty Digest contains survey data from 93 health plans representing over 115 million covered individuals.4 This source lists high cost as the most common reason a plan would designate a drug as “specialty,” in that 80% of the plans ranked high cost as 4 or 5 on a 5-point impact scale. Self-administration of an injectable, office administration of an injectable, and treatment of a rare disease are other characteristics that are commonly considered when designating drugs as “specialty.”

Specialty drugs have been the fastest growing segment in the pharmacy benefit sector. The number of specialty drugs on the market in the United States has grown from about 10 in 1990 to more than 250 in 2010.4 From 2008 to 2009, spending per healthcare plan member per year increased by 19.5% for specialty drugs, compared with an increase of 4.8% for traditional drugs.5 Even though less than 3% of the private healthcare population uses specialty pharmaceuticals, they account for as much as 25% of all outpatient pharmacy spending.6 With more than 600 specialty agents in the research pipeline, it is not surprising that payers have been focused on methods to manage these costs most effectively.3 SPPs are a diverse group of companies involved in overseeing distribution, management, and reimbursement of specialty pharmaceuticals.6 These companies have their origins in a number of lines of business, including community pharmacies, chain pharmacies, home infusion companies, wholesale drug distributors, and pharmacy benefit managers (PBMs). In 2006, 78% of surveyed health plans had contracted with or were in the process of contracting with an SPP for specialty drug distribution.6 As of January 2011, 88% are utilizing SPPs, 7% manage the distribution of specialty drugs in-house, and only 5% have no contractual relationship with SPPs. Forty-three percent contract with a single SPP, a proportion that has been decreasing over the past 3 years.4 Mandatory use of an SPP for dispensing is in place for at least one therapy category in 59% of commercial payers, 64% of Medicare Advantage plans, and 71% of Medicaid plans.

How Health Plans Typically Cover Specialty Drugs.
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SPPs are often able to acquire drug products with a volume discount unavailable to most pharmacies, hospitals, and physician offices. Health plans are also able to implement formulary policies more easily with a few contracted SPPs than with hundreds of local pharmacies. Another commonly discussed strategy to manage specialty drugs is to move them to the pharmacy benefit, relying heavily on SPPs, rather than covering them under the medical benefit.7 This has been referred to as medical channel management.1 SPPs have the advantage to payers that claims are submitted via an electronic, real-time process, whereas medical claims are typically batched with no concurrent review. The strategy also allows plans to shift from the traditional physician reimbursement model of “buy and bill” to a more controllable system. One managed care organization with approximately 4.6 million members reported an estimated $15.5 million in savings in drug costs by converting 50 drugs to an SPP.8 The trends in this activity are shown in the Figure.4

Some health plans mandate that patients use a single, or one of a few, contracted SPPs for specialty drugs. Most in the EMD Serono survey agreed that such a mandate is an effective strategy for achieving their overall specialty drug management goals, and currently 59% use this approach for at least one therapeutic class.4 In some states, “Any Willing Provider” legislation and certificates of coverage prevent the practice in some situations. Health plans indicate that monitoring of health outcomes, such as decreases in disease progression and serious adverse event rates, for specialty drugs is of increasing interest. SPPs offer outcome measurements, predictive modeling, and comparative prescribing analysis, but health plans report the least satisfaction with these services. Based on these findings and the overall drug development landscape, it is apparent that SPPs will remain in the healthcare environment for the foreseeable future.

Specialty Drugs in Oncology
SPPs have growing significance for persons with cancer for several reasons.9 In a number of malignancies, the treatment paradigm is shifting from a single course of chemotherapy lasting a few months to one more analogous to treatment for a chronic disease involving long-term, daily therapy with transitions from one drug to another as the disease progresses. The breakthrough medications that have achieved this possibility are expensive: SPPs have growing significance for persons with cancer for several reasons.9 In a number of malignancies, the treatment paradigm is shifting from a single course of chemotherapy lasting a few months to one more analogous to treatment for a chronic disease involving long-term, daily therapy with transitions from one drug to another as the disease progresses. The breakthrough medications that have achieved this possibility are expensive: 90% of oncology drugs approved during the last 5 years cost more than $20,000 for a 3-month course of therapy.1 Oncolo­gy is currently dominating research and development in the pharmaceutical industry, with 125 drugs in phase 3 clinical trials, 38 of which are oral medications. Additionally, cancers are increasingly being characterized by complex tumor biomarkers which will, in some cases, guide treatment. The strategies used by health plans to manage these molecular diagnostic tests, which are themselves expensive, are evolving. Many have not implemented policies as of yet, but most plan to do so within the next 12 to 24 months.4

Oral Anticancer Agents Often Classified as Specialty Drugs.
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Currently, 77% of health plans classify oral oncology agents as specialty drugs, and they represent some of the most commonly used agents in the category.4 Spending on oral cancer agents more than doubled between 2002 and 2006.9 Examples of drugs dispensed through SPPs, with their most common oncology indications, are shown in the Table.4,10-25

Some health plans include injectable chemotherapy agents in the specialty drug genre under a medical channel management strategy, even though they are not self-administered. These include paclitaxel protein-bound particles, ixabepilone, cabazitaxel, mitoxantrone, bendamustine, pralatrexate, azacitidine, decitabine, ofatumumab, bevacizumab, cetuximab, panitumumab, trastuzumab, romidepsin, leuprolide acetate, aldesleukin, temsirolimus, and bortezomib.10 Injectable agents for supportive care of cancer patients, such as epoetin alfa, darbepoetin, sargramostim, filgrastim, and pegfilgrastim, are considered specialty drugs by 78% of health plans. In addition, 59% of the survey respondents currently place some palliative care and end-of-life therapies in the specialty category or plan to increase focus on this area in the future. Currently, approximately 40% of health plans require an SPP be used for some or all specialty drugs in the oncology category.4

Benefits and Challenges of Specialty Pharmacy to the Patient With Cancer
Learning of a cancer diagnosis and receiving treatment represent a series of stressful events for patients and their families. The entire diagnostic experience immerses them in an unfamiliar world of medical specialists, testing procedures, medical jargon, and health insurance rules. Often the cancer diagnosis was preceded by an insidious onset of vague symptoms in an otherwise healthy person, so patients may be relatively naive to navigating the healthcare system. Coexisting concerns about employment, child care, and other responsibilities add to the burden. Therefore, it is important for health professionals to be aware of benefits and challenges introduced by each type of service entity that is utilized in the care of the cancer patient, including SPPs.

Since most SPPs are in a location remote from the patient, the prescriber and/or the prescriber’s staff will usually communicate with patients electronically. The SPP would typically be more familiar with the particular specialty drug they have been contracted to provide than a general service pharmacy. Many prior authorization or reimbursement issues can be addressed by the SPP, prescriber, and health plan without direct involvement of the patient. In some cases, when high-cost specialty drugs that are administered by infusion are assigned to the pharmacy benefit, via an SPP, rather than to the medical benefit, the overall out-of-pocket expense to the patient can be reduced. Some SPPs have realized cost savings through dispensing customized quantities with close monitoring for regimen changes or discontinuation.26 However, this benefit may not be transmitted to the patient if the health plan requires a copayment each time a prescription is dispensed.

The drug product will subsequently be delivered directly to the patient’s home. This represents a valuable convenience for the patient who may be fatigued by disease, travel, and medical procedures. In many cases, the complicated nature of administration or possible adverse events with specialty drugs necessitate intensive patient monitoring. Most SPPs offer patient education and 24/7 support lines staffed by a pharmacist or nurse. Some provide proactive refill programs, while others monitor for adherence based on refill patterns. Better adherence to specialty drugs with SPPs than with community pharmacies has been described in poster presentations and Internet Web sites.1,27

While there are many potential benefits to patients with cancer when they utilize an SPP, a number of concerns have been raised by other healthcare groups. The National Comprehensive Cancer Network (NCCN), a not-for-profit alliance of 21 cancer centers that are designated at the highest level by the National Cancer Institute, conducts initiatives in order to “improve the quality, effectiveness, and efficiency of oncology practice so patients can live better lives.”28 In 2010, the NCCN convened a task force on the topic of specialty pharmacy. The majority of their recommendations involve communication, coordination of care, and pharmacy practice issues as described below.

When an SPP assumes the primary responsibility for delivering the anticancer medication, the potential for fragmentation of care between the SPP and the rest of the oncology care team arises. Questions regarding quantities dispensed, communication of dosage changes or modifications, and delays in treatment initiation may be difficult to resolve since each SPP and health plan will have different procedures. Even within a health plan, logistic procedures may be different for each drug or class of drugs, and solving a problem can consume considerable provider time. Better informatics systems are needed to facilitate information flow and delineation of roles between SPPs and the healthcare team, especially since oncology patients have a frequently evolving medication regimen.28 Other specific recommendations have been made by the NCCN Specialty Pharmacy Task Force to decrease the risk of patient frustration, adverse events, and waste. These include:

  • SPP practitioners who care for patients with cancer should have specific expertise in oncology
  • Distribution models for SPPs should minimize delay in initiating therapy, and an appropriate estimate of drug delivery should be given to the provider and patient; this is important because many therapeutic regimens involve multiple drugs on a precise schedule and should not be initiated if availability of a specialty drug will be delayed
  • SPP should dispense small quantities on the first fill without penalties to the patient
  • If a self-injectable medication is sent directly to the patient, the SPP or the PBM should have the responsibility to educate the patient regarding self-administration techniques
  • Only agents that can be safely and appropriately self-administered should be dispensed through the SPP model
  • Medications requiring sterile compounding before infusion or those that a patient cannot self-administer should not be distributed through an SPP, since the process of “brown bagging,” by which patients deliver drugs to the clinical setting, creates obvious risk to product integrity and additional burden on the patient
  • Preparation of injectables by the SPP and dispensing directly to the hospital, clinic, or physician office (“white bagging”) does not necessarily eliminate the concerns of brown bagging and creates potential waste when dose modification or discontinuation based on patient-specific data occurs
  • SPPs should develop and implement procedures for proper handling and disposal of chemotherapy agents they dispense
  • All pharmacies, including SPPs, should participate in national incident reporting databases to include medication errors, adverse events, and near misses

A roundtable convened by the American Society of Health-System Pharmacists outlined a number of additional concerns related to drug distribution and handling that impact patient welfare and the oncology workforce.29 One participant stated, “Specialty pharmacies provide a recipe for profound clinical problems for our patients as decisions are made to carve select components of the total care process out of our health-system setting.” A number of potential negative effects were noted:

  • Supply chain control is disrupted when a patient receives a drug from an SPP and brings it to the institution for the injection, leading to the possibility of improper storage and handling and introduction of counterfeit drugs into the system
  • Some drugs provided by an SPP are accompanied by an infusion device that local staff is unfamiliar with using or replenishing
  • These concerns lead many hospitals to adopt policies preventing such medications from being administered within the institution, creating frustration for the patient who may have been required to follow this approach by his or her health plan
  • Increases in bureaucracy, paperwork, and inefficiencies are created for clinic nurse managers, physicians, and pharmacy managers in determining where to obtain the drug for each patient
  • Patients become dissatisfied because of the disruptions and delays caused by the complicated process and difficulty obtaining accurate information about their out-of-pocket expenses

When patients are treated for cancer, an entire team of professionals oversees their care. Inclusion of an additional or different entity, such as an SPP, into the system increases the potential for missed information, frustration, and even devastating consequences. In order to realize potential cost and clinical benefits while also supporting patients through a devastating cancer diagnosis, it is imperative that professionals providing care are well informed about all of the elements of the healthcare system and effectively deliver necessary information, training, and services to their patients.

At the core of the debate around specialty pharmaceuticals is the question of value and control in healthcare. Clinicians have typically been trained to emphasize patient outcome with relatively little concern for costs. Coverage policies in health plans have not typically been designed to evaluate the therapeutic value of particular treatments relative to their direct or indirect cost. At times, patient demand for a new product that appears to be a therapeutic breakthrough swells to a level not justified by the available outcomes data. The intersection of these circumstances in the wake of high-technology cancer innovations will require investment of all groups in order to ensure that individuals with cancer receive care that has clinical value, financial value, and above all, humanistic value.


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