Specialty pharmacy startups are again at the forefront of discussions based on a recent article just released by HealthLeaders Magazine (a division of Simplify Compliance). The study states that commercial pharmacy spending in the USA has risen to a new rate that greatly exceeds the five year average of a 14% increase. In fact, the rate increased by over 18%, far exceeding what optimistic economic projection analysts were both expecting and hoping to see. While oncology and immunotherapy drugs were noted in the report as the most significant drivers of the higher spending seen, the most important factor revealed in the new study was this: Specialty drug spend accounted for greater than 91% of the total overall drug spend increase!
Specialty Pharmacy Growth & Projections
Specialty pharmacies have become the fastest growing segment of the pharmacy industry over the past few decades. This is based on the number of new specialty pharmacies opening up nationally, plus the ever increasing rise in the number of existing pharmacies expanding their operations via the addition of specialty pharmacy services. With a projected annual growth rate of about twenty percent (20%) per year according to the AMCP (American Society of Managed Care), many entrepreneurs are focusing on the continuing success of specialty pharmacies as a lucrative business operation to startup. Yet the industry is still in its infancy according to many experts. Spending on specialty pharmacy and services was almost $87 billion in 2012. However, Drug Channels estimated that in 2014 alone, “retail, mail, and specialty pharmacies dispensed about $78 billion in specialty pharmaceuticals.” Although we must keep in mind that it is virtually impossible to come up with an exact number for pharmacies dispensing specialty medications, estimates project that this will quadruple by the end of next year (2020), with sales reaching above $400 billion (or slightly less than 10% of the total US health spending). Factor into this that of the twenty-seven (27) new drugs approved in 2013 by the FDA, fourteen (14) were specialty medications. Many experts are calling the phenomena the “Specialty Pharmacy Gold Rush”, reminding many of the famous California Gold Rush of 1848. It is clear that the potential for success regarding starting up a specialty pharmacy obviously exists, but perhaps it may be directly proportional to the number of specialty pharmacies “panning for the gold” that is expanding so very rapidly that caution and planning are definitely required.
An analysis in 2012 by United Healthcare revealed that about fifty-one percent (51%) of all spending on specialty drugs is for the treatments of cancer, rheumatoid arthritis, and multiple sclerosis. These are followed by HIV, hepatitis C, respiratory conditions, anticoagulants, growth deficiency, and transplants. Originally, the pharmacies that were classified with the “Specialty Pharmacy” designation were primarily dealing with the preparation of IV and injectable medications. This however quickly expanded into many other types of specialty pharmacies that have proven to be successful business models (compounding, mail-order, oncology, respiratory, Cystic Fibrosis, etc. to name just a few).
Is Starting Up a Specialty Pharmacy Harder Than Other Pharmacies?
Opening and starting up a specialty pharmacy requires both expertise and experience to result in a successful business operation. Yes, it is similar in many respects to starting up a “traditional” retail pharmacy. However, in addition to the list of steps followed in the planning and execution of more “traditional” pharmacies, there are numerous equipment, policies, procedures and operational considerations. How a business owner chooses to get into the specialty pharmacy market is sometimes a very tough investment decision to make. While more and more pharmacies are entering the specialty pharmacy market, the market is not without its challenges. With more and more pharmacies entering the specialty pharmacy market, many experts are wondering if the marketplace is becoming saturated. Associated with high cost medications and the historical domination of the Specialty Distributors (SD), the startup of a specialty pharmacy is becoming more complicated and challenging than ever before.
Let HCC Help!
Are you considering opening or starting a Specialty Pharmacy? Perhaps expanding or turning a portion of your existing Pharmacy business into a specialty pharmacy? Let a nationally renowned Pharmacy Consulting firm like Healthcare Consultants help you get the most out of your investment and guide you through the entire process.
Healthcare Consultants has helped plan and open more specialty pharmacies nationally than perhaps any other Pharmacy Consulting firm in the industry. Plus HCC offers the additional advantage of Pharmacy Staffing and Pharmacy Management, being in the business for over 29 years and being recognized as one of the premier Pharmacy Consulting agencies in the nation. With a proven track record and a history of success, HCC can plan and execute a strategy to win in the Specialty Pharmacy arena. Contact us online or call us today at 800-642-1652 to discuss how we can help you.
Specialty pharmacy startups require both expertise and experience to result in a successful business operation. Similar in many respects to starting up a traditional retail pharmacy, specialty pharmacy start-ups have additional requirements that must be taken in consideration and present additional challenges in both the planning and the ongoing operations of the pharmacy. In addition to all the steps involved in the starting up and opening of a new pharmacy, there are numerous equipment, policies, procedures and ongoing operational considerations that must be dealt with.