What is a specialty pharmacy network?

Specialty Networks

Specialty Networks

A core PBM management tool is the establishment and maintenance of pharmacy networks. A network consists of pharmacies that have entered into an agreement with a PBM to dispense prescriptions to enrollees of the health plans that PBMs work with.

To maximize the patient benefit of drug treatments, preferred specialty pharmacy networks are used to deliver high-quality, accessible pharmacy services. By contracting with select pharmacies, PBMs can ensure consistent care manegement and access to specialty medications while promoting affordability in the specialty channel.

It is important to note the distinction between these PBM-managed preferred pharmacy networks and drug manufacturer-operated limited drug distribution networks. Both may similarly limit the number of pharmacies that may dispense and manage patients on a certain specialty drug. However, each has different motivations for doing so.

For a specialty pharmacy to be included in a PBM or payer-aligned specialty pharmacy network, the pharmacy must agree to meet criteria that ensure patients safely and appropriately use their medications, that payer benefit designs are supported, and desired clinical outcomes are achieved.

Network Requirements

Network Requirements

Payers rely on PBMs to identify the highest-quality and most cost-efficient specialty pharmacies. Due to the proliferation of specialty pharmacies now involved in the acquisition and distribution of specialty products, PBMs create quality standards and metrics to ensure that the specialty pharmacies they contract with offer the highest quality of care in the industry.

Through these processes, PBMs ensure that patients receive comprehensive patient care services that meet the highest industry standards. To maintain in-network status, specialty pharmacies are required to consistently demonstrate their ongoing ability to meet or exceed each standard while offering competitive rates. PBMs optimize drug distribution via specialty pharmacy networks to reduce inappropriate utilization, improve patient adherence, improve clinical outcomes, and reduce non-drug medical costs.

Patient Care Standards

Patient Care Standards

Credentialing criteria for specialty pharmacies related to patient care may include:

  • Adherence management: Specialty pharmacy staff contact patients before each scheduled fill to arrange the dispensing of their next dose, identify potential adherence barriers, and manage treatment effects.
  • Counseling: Pharmacists provide patients with relevant information regarding their specialty drug and disease state.
  • Pharmacy accessibility: Clinical staff members are available to speak with patients at all times of the day to answer any questions or concerns they have regarding their treatment.
  • Appropriate therapy: Specialized pharmacists verify the correct medication is being prescribed at the correct dose and frequency.
  • Care coordination: Specialty pharmacy staff provide patients with all necessary supplies, specialty drug administration training, and support.
  • Specialty clinical protocols: Pharmacists closely follow all disease state and drug-specific clinical protocols for dispensing, monitoring, and patient follow-up processes.
  • Patient education: Specialty pharmacies ensure multiple languages and methods of education are available to patients.
Operational Standards

Operational Standards

Credentialing criteria for specialty pharmacies related to pharmacy operations and logistics may include:

  • Accreditation: Specialty pharmacy is accredited by one or more independent specialty pharmacy accreditation organizations.
  • Organizational structure: Specialty pharmacy has a detailed organizational structure in place to support all necessary operations.
  • Ancillary supplies: Patients are provided with all necessary supplies needed to administer their medications.
  • Cold chain management: Specialty pharmacies have detailed cold chain management procedures that include thorough tracking requirements.
  • Patient assistance programs: Patients have access to financial assistance programs provided through drug manufacturers, foundations, and other organizations.
  • Specialty medication fulfillment: Specialty pharmacies ensure that specialty medications are stocked and readily accessible for patient dispensing as soon as requested.
Cost Savings

Cost Savings

The process of creating preferred networks often involves intense negotiation and competitive bidding. The degree to which preferred networks are managed efficiently has a significant effect on consumers’ cost sharing and premiums.

The Federal Trade Commission has argued in numerous reports and opinions that laws preventing preferred pharmacy networks lead to higher drug prices and higher premiums, hence removing an effective means of cost control from the system.

Over the next ten years, PBMs and specialty pharmacies will save Medicare, Medicaid, commercial payers, and consumers an estimated total of $250 billion on the cost of specialty medications and related non-drug medical costs when compared to what expenditures would be with limited use of PBMs and specialty pharmacies.

Resources & References

Resources & References

  • New Drug Plan Regulations Protect Pharmacies, Harm Consumers. National Center for Policy Analysis. April 2015.
  • Estimating the Budgetary Impact of H.R. 4577, the “Ensuring Seniors Access to Local Pharmacies Act of 2014”. Moran Company. July 2014.
  • Drugstore Lobby “Any Willing Pharmacy” Bill Would Increase Costs by $21 Billion. Pharmaceutical Care Management Association. February 2015.
  • The Impact of Preferred Pharmacy Networks on Federal Medicare Part D Costs, 2014-2023. Milliman. October 2013.
  • Medicare Part D Plans Provide the Average Beneficiary Convenient Access to Preferred Pharmacies with Significant Savings.Visante. December 2014.
  • Impact of the elimination of preferred pharmacy networks on the Medicare Part D program. Oliver Wyman. March 2014.
  • A Survey of Seniors on Their Medicare Part D Preferred Pharmacy Network Plan. Hart Research Associates. September 2014.
  • 2014 Premiums and Star Ratings for Medicare Part D Prescription Drug Plans with Preferred Pharmacy Networks. Avalere Health. December 2013.
  • How Pharmacy Networks Could Save Medicare, Medicaid, and Commercial Payers $115 Billion. Visante. January 2013.
  • White Paper: The Management of Specialty Drugs. sPCMA. February 2016.