What makes specialty pharmacies 'special'?

Pharmaceutical CommercePharmaceutical Commerce - May/June 2015

The growing number of certifications has become a competitive issue for SPPs bidding for Pharma's business

Drug distribution in the United States is in something of a state of upheaval, caused by the flow of high-cost specialty pharmaceuticals into the market. High-priced drugs, in some cases costing tens of thousands of dollars for rare (and some not-so-rare) conditions set payers on edge, but at the same time attract the interest—and rewards—of the investment community for up-and-coming drug developers, especially new biologics.

Specialty pharmaceutical manufacturers generally prefer—or require out of necessity—specialty pharmacies to dispense their drugs to patients. At the same time, while some specialty pharmaceuticals are in general distribution (i.e., any local pharmacy), some manufacturers restrict the dispensing channel to a “limited distribution” set of mail-order or specialty pharmacies. Such restriction serves multiple purposes: drugs accompanied with a REMS (risk evaluation and mitigation strategies) program sometimes require pharmacists to be trained in appropriate dispensing; certain infused drugs require compounding; and extra care must be taken for the storage, dispensing and follow-on treatment of the drug and the patient receiving it.

But here’s the catch: other than stating that they are a “specialty” pharmacy (SP, or often, “specialty pharmacy provider,” or SPP), there is little in a regulatory or policy context to distinguish SPPs from all other pharmacies. You are what you say you are. This gap is being addressed by a number of accreditation agencies, most of which have been around for years, but in one case, relatively new and yet to accredit its first SPP.

“There’s a simple reason for the attention being paid to SPP accreditation,” says Quintin Jessee, a partner at D2 Consulting, which assists pharmacy clients in obtaining accreditation. “Payers require it for handling complex therapies, because they want to ensure the best possible patient outcome to justify the expense of these drugs.” In a like manner, manufacturers want to ensure that appropriate care is given to patients; a wave of avoidable adverse-event reports or poor patient adherence could quickly affect patient health and, ultimately, the commercial success of the drug.

From the pharmacy-business perspective, accreditation does serve an additional purpose: to position an SPP better in the competition for limited distribution products. And the motivation for that is to gain access to the larger revenue stream that specialty pharmaceuticals represent. “A typical retail pharmacy fills hundreds of low-cost generic prescriptions and makes a few percentage points on each fill; with high-cost specialty pharmaceuticals, that same percentage can generate tens of thousands of dollars annually for a pharmacy,” notes Jesse.

Diplomat Specialty Pharmacy, which has gone from a small regional provider to a national, publicly traded star of the SPP trend, gained its accreditation from the leading organization, URAC (Washington, DC), five years ago, says Atheer Kaddis, PharmD, SVP of sales and business development. “We initiated the process not necessarily to win contracts, but to ensure that we had appropriate, consistent internal processes to meet patient needs, and trained staff that followed those processes to the letter.” The first time through the review, he says, was a “heavy lift” for the organization; accreditation stays in place for three years, and then renewals are based on a review of standing procedures, and documenting compliance with them.

URAC originated in the 1980s as an evaluator of “utilization review” processes within healthcare organizations; now, with more than 30 separate accreditation programs in place, it calls itself “one of the fastest growing healthcare accreditation organizations in the world.” Some 240 pharmacies have earned, or applied for, specialty pharmacy accreditation (see Tables 1-2); new applicants are showing up at a rate of a handful per month.

But it is not the only accrediting body at work. Another is the Accreditation Commission for Health Care, Inc. (ACHC; Cary, NC), which has a group of standards focused mainly around patient care providers (home health, hospice and including specialty pharmacy). It, in turn, is an authorized “Medicare Deeming Authority,” which figures in CMS processes. In addition to a “specialty pharmacy” accreditation, it provides for infusion pharmacy, long-term care pharmacy, community pharmacy and others, and administers the accreditation of the Pharmacy Compounding Accreditation Board (PCAB). ACHC has around 1,000 pharmacies listed under one or another of these pharmacy-related categories.

Then there is the newly established Center for Pharmacy Practice Accreditation (Madison, WI), which was formed by three pharmacy professional organizations: the American Pharmacist Assn., the National Assn. of Boards of Pharmacy and the American Soc. of Health-System Pharmacists, and was founded in 2012. It delivered community-practice accreditation standards in 2013 and the accreditation program was opened in 2014. A year later, in January 2015, CPPA announced the availability of a specialty-pharmacy accreditation process. A handful of retail pharmacies have already earned the community pharmacy accreditation; several specialty pharmacies including Diplomat are currently going through the accreditation process.

“The door is open,” notes Lynnae Mahaney, executive director of CPPA. “Our standards are focused on recognition of specialty pharmacy practices, which provide care that enables patients to reach cost effective, therapeutic outcomes. She notes that the various committees overseeing standards development includes input from pharma manufacturers, as well as PBMs, payers and healthcare providers.

Each of these organizations accredits pharmacy enterprises; there is a Specialty Pharmacy Certification Board (Alexandria, VA), which has established individual certifications for specialty pharmacists. SPCB is an offshoot (but now independent of) the National Assn. of Specialty Pharmacy (NASP; Alexandria, VA), which calls itself the “unified voice of specialty pharmacy in the United States.”

Another organization with a stake in specialty pharmacy accreditation is The Compliance Team, Inc. (Spring House, PA), which certifies “Exemplary Provider” status for pharmacies (including community, specialty, long-term care and compounding pharmacies), rural health clinics, medical equipment suppliers and several other categories. It has CMS Deeming Authority for rural health and durable medical equipment (DMEPOS). Its website, www.TheComplianceTeam.org, lists hundreds of certified entities, but there appears to be little overlap with URAC or ACHC.

But wait… there’s more

Specialty pharmacies can be as small as the local store, run by an individual, independent pharmacist, but they can also be massive players in the healthcare industry. Diplomat, which went public last year, is the “private label” specialty pharmacy service behind 13,000 local pharmacies, as well as maintaining relationships with health systems. When Catamaran, the PBM now merging with United Health, acquired Salveo Specialty Pharmacy (St. Petersburg, FL) in January, the purchase price was $260 million. Specialty pharmacy is a multibillion-dollar activity of major players, such as Express Scripts, AmerisourceBergen Specialty Group, McKesson Specialty Solutions, Cardinal Specialty Solutions, Omnicare and others.

In this overlap with drug wholesaling, some SPPs have also garnered certification from NABP as Verified Authorized Wholesale Distributors (VAWD), a program run by NABP; some have also garnered the VIPPS (Verified Internet Pharmacy Practice) accreditation from that organization as well. For manufacturers, these certifications provide assurance that the storage, transportation and distribution activities of the pharmacies meet the toughest distribution standards.

Certification is a “ticket to entry” in handling specialty pharmaceuticals, observes Nick Calla, now VP of industry relations for Cardinal Health Specialty Solutions (Dublin, OH). Past president of the National Assn. of Specialty Pharmacies, and former member of the steering committee at CPPA, he notes that URAC certification is especially important for pharmacies working with PBMs, while ACHC is valued by insurers (through its OncoSource specialty pharmacy, Cardinal has URAC certification). CPPA has “a strong approach, but it will take a while to get a foothold” among manufacturers and drug distributors, he says.

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