Archive: A Year in Specialty Pharmacy: A Look Back at 2016's Top 5 Developments

2016 was an eventful year for specialty pharmacy and its providers. The industry continues to boom as more pharmaceutical companies and health systems see growing value in the market. In fact, Drug Channels predicts that by 2020, the pharmacy industry will be worth more than $483 billion – with most of its growth coming from specialty drugs.

Take a look at some of the key trends and impactors that are shaping the specialty pharmacy trajectory.

The Year of U.S. Biosimilar Approvals

2016 was a breakthrough year for biosimilars. To date, four biosimilars have been approved in the U.S. and three of those approvals occurred in 2016. In 2015, Sandoz gained approval for Zarxio, its version of Neupogen (filgastrim) from Amgen.

In 2016, the following were approved for multiple inflammatory diseases:

  • April 5: Inflectra, Pfizer/Celltrion’s version of Remicade (infliximab)
  • August 30: Erelzi, Sandoz’s version of Enbrel (etanercept)
  • September 23: Amjevita, Amgen’s version of Humira (adalimumab)

While approvals are progressing, launching seems to remain an issue due to litigation and navigating the regulatory pathway. All in all, the biosimilars industry has made considerable headway and is set to flourish in the coming the years.

President Trump’s New Administration2016's Top 5 Developments-02

According to one of the core tenets of his campaign last year, Donald Trump proposed repealing and replacing President Obama’s Affordable Care Act (ACA), aka Obamacare. While there are still a lot of uncertainties as to what action will be taken, health industry experts are preparing for big changes.

In the event that the ACA is repealed, there will likely be changes to pharmaceutical pricing, access, and medical and pharmacy benefit changes. As a result, health systems and pharma companies may seek cost-saving measures and associated partnerships to help navigate these changes.

Major Mergers and Acquisitions

As specialty dispensing revenue makes up an increasing share of the pharmacy industry, it’s no wonder that specialty pharmacy companies are being bought and sold swiftly. Last year saw 14 major M&A transactions, including the purchase of BioMatrix Specialty Pharmacy by ACON Investments and Triton Pacific Capital Partners, and Avella Specialty Pharmacy’s acquisition of Advanced Pharma Inc. and Oncology Plus – just to name a few.

Visit Drug Channels to see an extensive list.

Accreditation Is Nearly Mandatory

In the past, accreditation acted as more of a differentiator for specialty pharmacy providers (SPPs). Now, however, it’s practically a requirement to succeed in the industry. While still not legally required, many contracts aren’t even an option for an unaccredited SPP.

Utilization Review Accreditation Commission (URAC) remains the prevailing accreditation organization, followed by a few other top names in the space such as Accreditation Commission for Health Care (ACHC), The Joint Commission, and Community Health Accreditation Program. While the accreditation process varies, the ideas are shared: SPPs must exhibit reliable and consistent patient care and accountability.

2016's Top 5 Developments-03The Health System Boom Is Still Booming

For the past couple of years, we’ve seen a big movement of health systems to expand their pharmacies and include specialty drugs. These systems are finding that they have a unique and lucrative opportunity to utilize the resources they already have in place while earning revenue that they would otherwise be sending to independent SPPs. Furthermore, expanding gives these systems the ability to better manage patient care and outcomes.

A Bright Outlook for 2017

With a strong performance in 2016 and considerable growth and development across sectors, we’re excited to see what 2017 brings for the specialty pharmacy industry. If you’re looking to expand into an SPP or optimize the way your specialty pharmacy operates and delivers care, contact us to learn more about how we can help.