The Evolving Landscape of the Specialty Pharmacy Market and the Implications for the 340B Program

Ben H.

Ben H.

Dec 14, 20233 min read

0

The Evolving Landscape of the Specialty Pharmacy Market and the Implications for the 340B Program

Introduction:

The specialty pharmacy market has witnessed significant transformations in recent years, marked by a surge in demand, financial challenges, and rising costs. Concurrently, the 340B program, designed to provide discounted medications to eligible entities, has expanded its reach. This article aims to explore the intersection of these two domains and shed light on their implications for the pharmaceutical industry and healthcare providers.

1. The Growing Discrepancy in Captured 340B Claims:

One notable finding in a new paper on 340B contract pharmacy reveals that less than half of the claims prescribed by 340B-affiliated clinicians are captured by 340B pharmacies. This discrepancy suggests a potential loss or risk to pharmaceutical companies, as a significant proportion of claims that could have qualified for discounted pricing are not being captured. It highlights the need for improved coordination and efficiency within the 340B program.

Simultaneously, the proportion of 340B claims within the Medicare Part D system has been steadily increasing. From 1.7% in 2013, it rose to 9.6% in 2020. This upward trend signifies the growing utilization of the program and its impact on the pharmaceutical landscape. Pharmaceutical companies must adapt to this shifting landscape and devise strategies to navigate the expanding influence of the 340B program.

2. The Genesis Lawsuit and Potential Implications:

The Genesis lawsuit brought to light an intriguing revelation - entities affiliated with the 340B program may not be required to issue prescriptions for their patients within a specific timeframe or sequence of service. This finding adds another layer of complexity to the 340B program's operations and calls for a closer examination of the compliance and oversight mechanisms in place.

Moreover, the 340B program takes precedence over the government for Multiple Fee Schedule Pricing (MFP) claims. This prioritization could result in a significant shift of savings from the Medicare program to 340B entities. As this financial redistribution occurs, pharmaceutical companies must evaluate the impact on their revenue streams and explore potential strategies to mitigate any adverse effects.

3. The Durability of the Specialty Pharmacy Market:

Despite the challenges faced by the specialty pharmacy industry, including tightening margins and rising expenses, it has proven to be durable. The unmatched demand for specialty medications has contributed to the market's resilience, as patients increasingly rely on these specialized therapies for complex medical conditions.

Pharmaceutical companies operating within the specialty pharmacy market must adopt innovative approaches to optimize their operations and maintain profitability. This could involve streamlining supply chain processes, investing in technology infrastructure, and exploring strategic partnerships to enhance efficiency and cost-effectiveness.

Actionable Advice:

Based on the insights gathered from the intersection of the 340B program and the specialty pharmacy market, here are three actionable recommendations for pharmaceutical companies:

  • 1. Strengthen Collaboration and Communication: Enhance coordination between 340B-affiliated clinicians and pharmacies to improve the capture of eligible claims. Implement robust systems that facilitate seamless information exchange and streamline the prescription process.
  • 2. Review Compliance and Oversight Mechanisms: Conduct a thorough evaluation of compliance procedures within the 340B program to ensure adherence to regulations and mitigate potential risks. Implement mechanisms to monitor prescription issuance timelines and sequence of service to maintain program integrity.
  • 3. Foster Innovation and Efficiency: Embrace technology solutions to optimize supply chain processes and reduce operational costs. Explore opportunities for strategic partnerships to leverage economies of scale and enhance cost-effectiveness in the specialty pharmacy market.

Conclusion:

The evolving landscape of the specialty pharmacy market and the expanding influence of the 340B program present both challenges and opportunities for pharmaceutical companies. By understanding the discrepancies in captured claims, the implications of the Genesis lawsuit, and the durability of the specialty pharmacy market, companies can navigate this complex terrain more effectively. By implementing actionable advice such as strengthening collaboration, reviewing compliance mechanisms, and fostering innovation, pharmaceutical companies can position themselves for success in this ever-changing environment.

Want to hatch new ideas?

Glasp AI allows you to hatch new ideas based on your curated content. Let's curate and create with Glasp AI :)