Increased Demand for Specialty Pharmacies Due to Chronic Illnesses

As prevalence of chronic disease continues to increase, demand for targeted medications to treat these diverse conditions also goes up, but the gap between need and access separates many patients from the medicine they need. Specialty pharmacies have emerged as a strategic solution to improve patient access and adherence to complex treatments by dispensing highly specialized medications and providing high-touch, coordinated care to help them manage their treatment plan and complicated reimbursement issues.

Chronic Disease: A Complicated, Costly Problem

An estimated six in 10 Americans live with chronic diseases such as heart disease, diabetes and cancer, and four in 10 manage more than one chronic disease.¹ This number is rising: By 2030, an estimated 171 million Americans will have one or more chronic disease.² Chronic disease is the leading cause of death and disability in the United States.¹

The term “chronic disease” is broadly defined as conditions lasting one year or more that require ongoing medical attention, interfere with daily living or both and include familiar conditions such as heart disease, cancer, hypertension, diabetes, arthritis and Alzheimer’s disease. But beneath the umbrella of chronic disease are autoimmune diseases (those in which immune cells mistakenly attack the cells they are meant to protect) and rare diseases. In the United States, rare diseases are classified as any disease that affects fewer than 200,000 Americans. Collectively, rare diseases affect 25 million Americans and include conditions such as primary immunodeficiency, cystic fibrosis and Lou Gehrig’s disease, among many others.³

Chronic disease is responsible for $4.1 trillion in U.S. healthcare costs annually.¹ An estimated 84 percent of healthcare costs are attributed to the treatment of chronic disease.⁴ Pharmaceutical expenditures in the U.S. grew 7.7 percent in 2021 compared to 2020 for a total of $577 billion. Nearly half of this spending is attributed to specialty medications used by only one to two percent of these patients.⁵ Further, prescription drug spending is expected to rise four to six percent in 2022, with specialty and cancer drugs expected to be two of the driving forces.⁶

The Promise of Specialty Drugs

Because chronic disease states are complicated, the drugs needed to treat the rarest of them are scarce. Of the 7,000 recognized rare diseases in the U.S., an estimated 90 percent of them do not have an approved treatment.⁷ Encouragingly, 58 percent of all new drug approvals in 2020 were designated for rare diseases, and more than 1,000 therapies are in the pipeline.⁸ For those living with chronic illnesses — especially rare ones — specialty drugs offer real hope.

But the promise of highly targeted specialty drugs comes at an exorbitant cost. On average, major pharmaceutical companies spend approximately 17 percent of their revenues on research and development for new drugs. And this number is expected to keep increasing, with costs expected to grow by three percent each year, reaching over $203 billion by 2024.⁹ Not surprisingly, these costs are passed on to patients. According to the American Association of Retired Persons’ latest Rx Price Watch Report, which looked at 180 widely used specialty prescription drugs, the average annual cost for one specialty medication used on a chronic basis was $84,440 in 2020.¹⁰

Further, specialty drugs come with other complexities, too, including the way they are administered, the management of side effects, the diseases or conditions they treat, special access conditions required by the manufacturer, payer authorization or benefit requirements, patient financial hardship or any combination of these.²

While specialty drugs are life-improving — and in some cases lifesaving — their extremely high price tag makes them cost-prohibitive for patients to initiate, let alone maintain. Patients with more than one chronic disease must manage multiple medications at once, choosing which to take and when, stretching what they do have and skipping some altogether because they simply cannot afford them. Prior authorizations make an already complicated problem worse. Deciding whether a prescribed medication will be covered by the insurance payer is a lengthy process, one that often involves complex transactions that impact patient access and delays or interrupts treatment.¹¹ Clinical outcomes are negatively impacted by limited access and nonadherence to the medication(s) they need.

Improved access to specialty drugs is only part of the solution. Since treatment plans for chronic disease are often complicated, patients can easily feel overwhelmed by them and may need extra support to implement and maintain them. They need help understanding how and when to take their medications, and why.

Specialty Pharmacies: A Strategic Solution

Specialty pharmacies emerged as a strategic solution that addresses patient access, affordability and adherence. They are a unique subset of pharmacies that dispense high-cost, high-touch, specialized medication to treat a wide variety of rare, complex diseases while also partnering with the entire care team to help patients remain adherent to their medication regimens.⁴

According to the National Association of Specialty Pharmacy, specialty pharmacies “provide services that include training on how to use these medications, comprehensive treatment assessment, patient monitoring and frequent communication with caregivers and the patient’s physician or other healthcare providers. The expert services that specialty pharmacies provide drive adherence and persistency, proper management of medication dosing and side effects and ensure appropriate medication use.”² They accomplish this by partnering with patients, helping them adhere to their highly specific treatment plans through advocacy, education and reimbursement assistance.^2,8 Also, specialty pharmacies often have distribution infrastructure already in place.

Exponential Growth

Before 1970, specialty pharmacies were little-known to the average American since they served the small population of chronically ill patients with rare diseases (such as hemophilia, cancer and the like) that needed highly specialized medications.¹² But by the 1990s, drug manufacturers had made ground-breaking headway into identifying new drug classes, differentiated molecular entities and unique delivery mechanisms for a wide range of disease states.¹² The Orphan Drug Act (ODA) of 1983 helped make this possible by incentivizing drug manufacturers to research and develop drugs for rare diseases through tax credits, market exclusivity agreements and research grants.¹³ The ODA helped make specialty drugs profitable for manufacturers, so they are increasingly investing in research and development efforts to bring new medications to market quickly.¹⁵ Over time, the increase in highly specialized drugs necessitated a new dispensing model.

Today, specialty pharmacies are better-known and increasingly used. In fact, over the past six years, specialty pharmacies have grown an astounding 315 percent from 378 in 2015 to 1,570 in 2021.14 Approximately 50 percent of therapies approved by the U.S. Food and Drug Administration in 2018 and 2019 were considered specialty medications.1

What Makes Specialty Pharmacies Different

Since retail pharmacies lack the training and expertise to dispense complex medications, unique, highly focused pharmacies are well-positioned to offer collaborative care that supports patients in a way retail pharmacies simply cannot. Specialty pharmacies improve access to highly complex medications not only by dispensing them, but also helping patients find programs to help offset co-pays, which makes medication more affordable. They also improve patient adherence through a comprehensive approach to the management and implementation of treatment plans. Specialty pharmacies prioritize:^8,16

• Offering high-touch care emphasizing patient support through specialty pharmacists, clinical nurses and nonclinical patient support specialists, including insurance and reimbursement specialists.
• Coordinating special handling needs, including refrigeration, overnight delivery and shipment tracking.
• Communicating with care providers to coordinate continuity of care.
• Educating patients about their condition, medication, expected clinical outcome and potential adverse events.
• Addressing potential side effects with urgency, compassion and personalized care.
• Tracking patient medication cycle and identifying issues between refills that could negatively impact adherence.

Solving Complex Problems

A specialty pharmacy’s model is designed to provide comprehensive, coordinated care, achieve superior clinical and economic outcomes and expedite patient access to care.¹⁷ Specialty pharmacies are typically subsets of large health insurance providers, retail providers or pharmacy benefit managers that coordinate these services. Independent specialty pharmacies also exist.¹⁷

One such example is Nufactor, a specialty infusion company that provides infusion medications for patients with a variety of conditions, including bleeding disorders, movement disorders, immune deficiencies and many autoimmune conditions such as immune mediated neuropathies, autoimmune mucocutaneous blistering diseases and more. Nufactor helps patients navigate complicated insurance requirements, obtain prior authorizations, find co-pay assistance programs and appeal denials.

Like so many specialty pharmacies, Nufactor has experienced significant growth over the past decade. Chief Operations Officer Leslie Vaughan, RPh, IgCP, CSP, attributes this growth largely to high-touch service offering: “Patients like the level of service they receive. Each patient is assigned a single point of contact throughout their time on service with us. They like being able to directly reach someone who can help them navigate any issues from reimbursement to clinical concerns.”

Further, not only does Nufactor employ specialized pharmacists and nurses that consistently monitor patients, but it also assigns each patient a unique client service specialist (CSS) who contacts them monthly to discuss adherence and any problems with the medication (including side effects, clinical concerns and reimbursement issues). The CSS then coordinates care with the appropriate team member should concerns arise. Vaughan says the high-touch, patient-centered model makes patients happy. In fact, she reports a 99 percent patient satisfaction rate year after year. “If patients are forced to leave us (for instance, to find new insurance when we are out of network), they may select a different insurance the subsequent benefit year just to be able to come back to our service,” explains Vaughan. “Our people are what makes us special and successful. [We] value patient care.”

Targeted Help Offers Patients Hope

As chronic illnesses continue to rise, specialty pharmacies will continue to serve this diverse patient population by improving access and adherence to life-changing medications. Targeted, expensive treatments are a complicated source of both frustration and hope for patients. They can be life-changing, but barriers to access limit patient adherence. Specialty pharmacies offer tangible hope by prioritizing high-touch, personal care, supporting patients through each step of their treatment journey.