Walgreens introduced this week that it’s increasing its specialty pharmacy choices to incorporate cell and gene remedy companies. The transfer might enable Walgreens to play a much bigger position in a rising market — analysis reveals that specialty medicines now account for greater than half of the nation’s prescription drug spend, regardless of making up a small share of complete prescriptions.
With the announcement, the pharmacy big launched a newly built-in enterprise unit known as Walgreens Specialty Pharmacy. The unit encompasses most of Walgreens’ property within the specialty pharmacy house, together with specialty pharmacy subsidiary AllianceRx.
This unit will fall below Walgreens’ core retail pharmacy division. However, Protect Well being Options — Walgreens’ subsidiary that helps well being system pharmacies — will stay below Walgreens’ U.S. healthcare division.
As a newly rebranded enterprise unit, Walgreens Specialty Pharmacy will embrace an 18,000-square-foot innovation heart in Pittsburgh, practically 300 group specialty pharmacies, 4 central specialty pharmacies and greater than 1,500 specialty-trained pharmacists. The unit additionally has a rising roster of 240 restricted distribution medicine, in line with Walgreens’ information launch.
Trade consultants weren’t shocked by Walgreens’ announcement, saying that it is smart that a large pharmacy firm would wish to deepen its presence within the quickest rising section of drug spend.
Pleasure Liu — CEO of Plenful, an organization that gives automation instruments for pharmacies — famous that healthcare is evolving, and Walgreens, identical to another healthcare firm, wants progressive methods to remain aggressive.
“Specialty pharmacy companies are profitable and in excessive demand given medical developments and an getting old inhabitants,” she wrote in an electronic mail. “That is an thrilling step for each Walgreens itself and the sufferers below their care.”
By increasing its specialty pharmacy companies, Walgreens can diversify its choices. This might result in the corporate enhancing its worth proposition and relationships with sufferers, payers, suppliers and pharmacy profit managers, Liu defined.
In her view, success will depend upon how effectively Walgreens can “align its targets throughout enterprise items and make the most of the perfect instruments to streamline its workflows and seize development.”
One other trade chief — Rick Ratliff, CEO of MedAdvisor Options, which gives affected person engagement options to pharmacies — stated he wasn’t stunned about Walgreens’ announcement given the corporate’s large scale and the spectacular variety of folks it engages every day.
“Walgreens may be very effectively positioned to assist sufferers entry specialty medicines sooner, which may have important optimistic influence on healthcare outcomes,” he declared.
Many people who’re prescribed specialty medicine must navigate a sophisticated course of to even entry their medicine, Ratliff famous. This course of typically includes prior authorization, verifying advantages protection and figuring out choices for monetary help.
Because of this specialty pharmacy companies aren’t all the time accessible to the sufferers who want them, Ratliff defined.
“If folks have a capability to undergo these processes with [a brand] they know and belief, resembling Walgreens, the worth proposition for these people will increase considerably — along with the truth that they may get on remedy sooner and achieve success of their medicine journey,” he stated.
Like Ratliff and Liu, Coresight Analysis CEO Deborah Weinswig additionally thinks that Walgreens’ choice to go deeper into the specialty pharmacy market might yield a number of strategic advantages.
Getting into this market gives substantial income alternatives as a result of increased revenue margins related to specialty medicines in comparison with conventional medicine, she identified.
“Contemplating the current challenges introduced to some in M&A, launching versus buying could be the perfect path to go proper now,” Weinswig wrote in an electronic mail. “As we take a look at tendencies inside healthcare, there’s a clear shift towards offering extra built-in healthcare options.”
She famous that this growth positions Walgreens to higher compete with key trade gamers which have already established specialty pharmacy companies, resembling CVS and Cigna’s Categorical Scripts.
Walgreens’ transfer might additionally assist the corporate diversify its buyer base, Weinswig added. By offering specialty pharmacy companies, Walgreens would possibly allow itself to each retain current prospects and appeal to new ones who require these complicated therapies, she defined.
And Weinswig believes Walgreens’ growth within the specialty pharmacy section is prone to affect just a few broader tendencies within the trade.
She thinks the addition of Walgreens within the specialty pharmacy market might intensify competitors, which might result in extra aggressive pricing and improved service high quality. Better competitors might put stress on smaller specialty pharmacies, which might probably result in a consolidation inside this area of interest of the market, Weinswig identified.
She additionally predicted {that a} extra aggressive specialty pharmacy market would possibly spur improvements in medicine administration and affected person care packages — which might enhance therapy outcomes for sufferers, in addition to enhance effectivity for the higher healthcare ecosystem.
“Walgreens’ transfer to ascertain a specialty pharmacy enterprise is a strategic initiative that not solely seeks to capitalize on a profitable section but in addition positions the corporate for enhanced aggressive leverage and buyer engagement inside the evolving healthcare panorama,” Weinswig wrote. “This growth is poised to have profound implications on the trade, selling aggressive dynamics, fostering innovation and probably catalyzing market consolidation.”
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