Kroger announced Thursday it will acquire the outstanding shares of Axium Pharmacy Holdings, a leading specialty pharmacy, and merge the two companies. By now, it should be clear that specialty is becoming an increasingly important part of the retail pharmacy mix, having grown more than sixfold in revenues between 2000 and 2011, with everyone from Rite Aid to Costco to Hy-Vee biting off a piece for themselves.
As Specialty Pharmacy magazine reported in its fall 2012 issue, specialty drug development is starting to play a much bigger role in drug development overall than traditional pharmaceuticals. According to the IMS Institute for Healthcare Informatics, seven of the top 20 drug therapy classes will be in specialty by 2016, including cancer, autoimmune disorders and antivirals, and specialty and bioengineered drugs remain one of the few growth centers in the drug industry in 2012. And according to Express Scripts, the market for specialty and bioengineered drugs is expected to grow from 2011's 17.1% to 22% by 2014.
A quick look at the state of the drug industry shows where things are going as well. While many branded drug companies have shifted significant development into specialty — with Pfizer, Merck and Bristol-Myers Squibb serving as prominent examples — generic drug makers are looking to get into the action with biosimilars. In October 2012, Sandoz started a phase-3 trial of a biosimilar version of Amgen's anemia drug Epogen (epoetin alfa) and is conducting trials of other biosimilars, while Teva won Food and Drug Administration approval for Tbo-filgrastim, a biosimilar of Amgen's Neupogen (filgrastim), used to treat reduced white blood cell counts in patients on chemotherapy, in August 2012.
In other words, whether doing it through mergers and acquisitions, like Kroger, or through partnerships, like Hy-Vee's deal with Amber Pharmacy, retailers that don't take advantage of specialty pharmacy have little to gain and much to lose.