Capturing specialty market is essential for growth

Specialty drug market worth $42.8 billion in 12 months ended June 2012

WHAT IT MEANS AND WHY IT'S IMPORTANT — Specialty pharmacy is one of the fastest-growing segments of pharmacy today, but only a minority of specialty drugs that end up in patients' hands are dispensed through retail pharmacy channels.

But with the growing importance of specialty due to the aging population and the commoditization of the market for primary care drugs, more retailers want in on the action, so it wouldn't be in their interest to have PBMs conquer too big a share of the market.

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And it makes sense for a reason other than their bottom lines: Studies repeatedly have shown that patients who engage in face-to-face interactions with pharmacists show better medication adherence than those who don't. Still, while chain retailers such as Walgreens, Costco Wholesale and Hy-Vee have a presence in specialty, mail-order pharmacies - including those run by pharmacy benefit managers - command the largest share of the retail specialty market and account for the fastest growth.

According to IMS Health, the specialty drug market was worth $42.8 billion during the 12-month period ended in June. Of that, nearly 30% went through mail service, while 10.1% went through chain and mass-merchandise stores, 5.7% went through independents, and 1.6% went through food stores. Meanwhile, mail service has seen the highest growth among all retail channels, 23.6%, followed by 12.9% among independents, 3.1% among chain and mass, and 2.2% among food stores. The remaining 52.7% of the market went through institutional channels, such as clinics, hospitals and long-term care centers.

At the same time, brick-and-mortar retailers account for a majority of dispensed prescriptions for HIV and other antiviral drugs and gastrointestinal anti-inflammatory drugs, as well as a significant percentage of systemic anti-arthritic drugs. IMS VP industry Doug Long said during a presentation at the National Association of Chain Drug Stores' Pharmacy and Technology Conference in Denver that future growth in biosimilars would open up opportunities as well, as would treatment of autoimmune disorders.

The importance of specialty is evident from recent trends in drug innovation. According to Long's presentation, drugs for specialty indications, such as types of cancer, chronic viral infections and autoimmune diseases have accounted for a significant portion of new Food and Drug Administration approvals. Because of that, whoever can best capture the patient populations that depend on specialty drugs will be in the best position for future growth.

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