Overall growth in specialty pharmacy today is significantly outpacing traditional pharmacies and will soon make up approximately half of total pharmacy spend. As one of the fastest growing segments in pharmacy, specialty pharmacy may be an appealing business opportunity for pharmacy owners.
To be successful, there are several considerations prospective owners should keep in mind when starting their own specialty pharmacy.
In part 1 of this 2-part series, we discussed considering stakeholders, business focus, and deciding on a pharmacy location. In this article, we take a closer look at accreditation, using technology and data, and licensure and payer contracts for specialty pharmacies.
Having 1 or multiple accreditations used to be simply nice to have in the specialty pharmacy field, but now it’s becoming more of an expectation. Accreditations may add value to a pharmacy, especially a newly operating one, by helping to identify areas where the pharmacy may put programs in place to improve based on accreditation standards. Accreditations drive quality, compare pharmacies to one another, improve patient care, and often serve as a way for third parties to validate pharmacy services. The process of getting accredited involves applying to an accrediting organization, reviewing the required standards, going through a desktop review and/or onsite audit, fixing any correction actions, and then going through a panel review where accreditation is decided/awarded. Once accredited, the pharmacy must ensure all standards and procedures are kept up in order to be reaccredited.
There are many accrediting bodies available to specialty pharmacies, and many pharmacies will choose to be accredited by multiple bodies, known as dual accreditation. Accreditation processes, prices, and so on vary from group to group. For example, some accreditations may require pharmacist(s) to be certified specialty pharmacists, whereas others may not. A key consideration when making decisions regarding accreditation involves third parties as many of them will require accreditation for reimbursement, and some will even require a specific accreditation. When opening a specialty pharmacy, it is very important to consider all accrediting bodies to make the appropriate decision for your business. Many pharmacies will consider partnering with a consulting firm to help assist with these decisions and the overall process. See below some of the most popular accrediting bodies:
URAC: Historically been viewed as the gold standard for specialty pharmacy accreditation and is used by many payers for validating quality
ACHC (Accreditation Commission for Health Care): Accredits multiple different areas in health care for quality and excellence and has deeming authority from Centers for Medicare and Medicaid Services
CPPA (Center for Pharmacy Practice Administration): A relatively newer accrediting body affiliated with the American Society of Health-System Pharmacists
The Joint Commission – Typically seen as the gold standard for long-term care, compounding, and home infusion pharmacy and, therefore, not specifically focused on specialty pharmacy
The Compliance Team – Although they do have a specialty pharmacy focused program, this body is focused more on longer term care pharmacy and the dispensing of durable medical equipment
Technology and Data
A critical piece of opening a new specialty pharmacy that should not be overlooked is technology. It is imperative that specialty pharmacies have robust and capable pharmacy information systems as the specialty drug dispensing process requires not only the ability to adjudicate claims, but also the ability to process and store significant patient documentation. Whether for prior authorizations, adherence counseling, accreditation requirements, or many other tasks, the system must be able to track and store all necessary workflow items for the pharmacy to be successful. There are many common players in the marketplace such as WellSky (CPR+/CareTend), ScriptMed, Rx30, QS/1, PioneerRx, Keycentrix, Brightree, and more for the pharmacy to consider depending on what their goals are for the software. Retail-based pharmacy systems may work for a short time, but would require manual tracking of patient care management items and would not be ideal long term for a specialty pharmacy looking to grow. Certain products can “wrap around” the dispensing component, like TherigySTM or Asembia1, to capture this ancillary patient care data, but may not fully integrate with the dispensing side.
Another factor that should not be overlooked is data. Collecting and analyzing multiple data points throughout the workflow can be crucial for improvement of patient care, enhancement of customer service, cost savings, and increased pharmacy efficiency. Having the ability to capture data in all facets of the pharmacy dispensing process from specific patient information to time stamps of prescription workflow steps will allow the pharmacy to improve much more rapidly and likely see far more value.
Licensure and Payer Contracts
Like any pharmacy, specialty pharmacies will need to be licensed. If the specialty pharmacy wishes to dispense in multiple states, which is quite common, the pharmacy will need a primary license in the state where their physical location resides and then also a non-resident license in all states where patients receiving prescriptions reside. It is not uncommon for a specialty pharmacy to opt to get licensed in all 50 states. What differs for specialty pharmacy is that most states do not currently recognize specialty as a class of trade, from a licensing standpoint that is. Therefore, the pharmacy will likely need to get licensed as a different type of pharmacy (eg community, mail order, long term care, etc.). This class of trade dilemma often comes in to play with wholesaler contracts for specialty pharmacies as well causing many new specialty pharmacies to open with a retail type contract.
Payer contracts are yet another complexity. Like the other licenses/contracts, many specialty pharmacies will open with a retail-like contact. In these contracts, payers will often set geographical limits, for example stating that the pharmacy may only dispense to locations within a 50-mile radius. As the specialty pharmacy grows over time, it will likely start to dispense more National Drug Codes that seem like specialty drugs, have a much higher brand to generic ratio, and/or dispense too many prescriptions outside the allowed geographic range. At this point, payers will likely require the pharmacy to change the reimbursement structure of the contract as specialty medications tend to have a much higher cost and therefore payers would want to reimburse at lower margin rates. Something a pharmacy may consider at this point is operating with 2 different National Provider Identifier numbers so that the pharmacy can have 2 different contracts (one for retail-type prescriptions and the other for specialty medications). Depending on the focus and trend of dispensing, this would of course only make sense for some pharmacies. Another complexity to consider with payer contracts is related to state government-funded payers who may only reimburse pharmacies located within their state.
About the Author
Molly Gombos earned her Doctor of Pharmacy degree from the University of Pittsburgh in 2014 and is currently enrolled at Pitt in the Master of Pharmacy Business Administration (MPBA) program, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines. Molly has spent the last 7 years working in community pharmacy, initially as a pharmacist and pharmacy manager and most recently working in pharmacy operations. Her current role is working in the patient safety and clinical space with focus on clinical decision support.