Many of today’s most effective specialty drugs are distributed through limited networks of specialty pharmacies, ranging in size from exclusive (one to two pharmacies) through limited small (two to five pharmacies) and limited large (six to 15 pharmacies). A new white paper from Avella Specialty Pharmacy reports that with 79.2% of manufacturers managing their specialty products through a limited distribution (LD) model, these LDs are shrinking even more, consisting of fewer pharmacies than they did just a decade ago.
Drug manufacturers are “carefully selecting pharmacies that have the expertise and capabilities needed to promote the best possible patient outcomes,” stated the report, titled “Limiting Distribution with Unlimited Potential,” which was released this week. “While limited distribution networks for these drugs used to commonly include upwards of 25 or 30 pharmacies, today they on average include one to three. Yet these small networks have launched many very successful drugs in the past decade.”
Despite this contraction, smaller, independent specialty pharmacies continue to make inroads into these LD networks. “In the past, it was typically large PBM [pharmacy benefit manager]-owned specialty pharmacies that got into most LD networks, but we’ve seen a shift in that paradigm in many areas, including oncology, inflammation and orphan disease states,” Eric Sredzinski, PharmD, Avella’s executive vice president for clinical affairs and quality assurance, told Specialty Pharmacy Continuum. “One of the first drugs for which we saw this was ibrutinib [Imbruvica, Johnson & Johnson/Pharmacyclics]. The manufacturer originally selected five non–PBM-owned specialty pharmacies for the LD network; it now includes four non–PBM-owned SPs. After that, we started seeing other manufacturers shifting those decisions and looking at non–PBM-owned specialty pharmacies.”
The report notes that manufacturers are looking for enhanced services that independent specialty pharmacies are able to provide to patients or providers, such as enhanced data capabilities and patient services.
“There are a number of key factors they’re looking for,” Dr. Sredzinski said. “Does the partner have a current relationship with providers, and a patient population already in that therapeutic category or something related to it, so they have contacts and expertise in managing those patients appropriately? Do they have good payor coverage across Medicare, Medicaid and commercial plans? Do they have the clinical infrastructure to manage patients, from pharmacists to technicians to nurses? Can they provide support services, such as financial assistance programs? And can they capture all the data to tell the story of what’s going on with the product throughout the drug’s life cycle?”
The LD market in specialty pharmacy is dynamic and will continue to evolve, Dr. Sredzinski said. “I do think the larger PBM-owned SPs are recognizing that they need to change their service models, which is good, because it’s all ultimately about the patient. The ball is in every specialty pharmacy’s court to show that they are differentiated, beyond just the minimum requirements manufacturers are asking for, including items and options they might not even have thought about yet.”