With specialty drug spending soaring 60% in the past five years, large health systems have jumped into the specialty pharmacy business to assert some control over those costs by dispensing the drugs to their patients and covered employees.
Health systems say those pharmacies help them better manage outpatient drug costs. A growing number of insurance contracts and Medicare initiatives tie payments to quality metrics that reach beyond hospital stays to hold providers accountable for patients' total medical costs, including drugs.
It's also a robust business for those systems that can successfully negotiate with manufacturers and health plans so they can compete with the bigger players.
“It you want us to be responsible for the total cost of care, allow us to be able to care comprehensively for these patients,” said Dick Schirber, a spokesman for ExceleraRx Corp., a for-profit specialty pharmacy services company owned by six health systems. Comprehensive care, Schirber said, includes managing the very expensive prescriptions that patients take at home for cancer or chronic diseases, so that providers have more control over waste as well as complications.
ExceleraRx provides services to system-owned specialty pharmacies, such as negotiating with drugmakers and handling data reporting.
Phoenix-based Banner Health started its own specialty pharmacy last year, taking its business away from Premier, which acquired Commcare Specialty Pharmacy in 2010 for $35.9 million. Banner employees enrolled in the system's health plan were the pharmacy's first customers.
“For everyone, everywhere, the pharmacy expense is increasing,” said Pam Nenaber, Banner's CEO of pharmaceutical operations.
Banner Health hired three clinical pharmacists, three patient advocates and three staff members to support operations. The system also spent $1 million on a drug-dispensing robot for the specialty pharmacy's new home-delivery service. The robot fills pill bottles, which are verified by a pharmacist before being shipped. Clinical pharmacists also talk to patients at home to answer prescription questions.
In the first year, Banner shaved about 1% off its specialty drug spending for about 1,200 workers and their families covered by the system's employee health plan.