Specialty Pharmacy

The old Utilization Review Accreditation Committee, now known as URAC, validates the quality of various health care providers and organizations.  In many arenas it is viewed as a kind of seal of approval.  URAC has turned its attention to the burgeoning specialty pharmacy area and issued a report in support of its accreditation program.   (URAC Report)   The paper points out that today specialty drugs account for about 17% of drug spend, but that is projected to grow to 40% by 2020.  About 70% of overall growth in cost and utilization of drugs results from specialty pharmaceuticals.  Already FDA approvals reflect the focus on specialty compounds and in future years they will be the bulk of NDAs.

What makes a specialty drug is a subject of confusion, but generally they have a non-oral route of administration, require special handling and/or special patient tracking, are high cost and often have small, highly specific patient populations.  Because of their complexity, many are covered under the medical benefit, because they originally were administered in a physician’s office.  Now most payers require that patients use a specialty pharmacy for many of these compounds and most payers have a variety of ordering, reimbursement and management requirements surrounding their use.  Most payers have realized that they need a single point of management across the medical and drug benefits.

On the one hand this paper can be viewed as a puff piece for URAC to encourage people to avail themselves of its accreditation programs, which earn it fees.  On the other hand, it does summarize the issues well and draws further attention to an important cost and quality control issue.  Because of the complexity of specialty pharmaceuticals it will be important who is used to distribute and manage these drugs and having an independent assessment of the quality of the specialty pharmacy firm is valuable, especially for smaller payers.