Walgreens introduced this week that it’s expanding its specialty pharmacy choices to incorporate cell and gene remedy companies. The transfer might permit Walgreens to play a much bigger function in a rising market — research shows that specialty medicines now account for greater than half of the nation’s prescription drug spend, regardless of making up a small proportion of complete prescriptions.
With the announcement, the pharmacy large launched a newly built-in enterprise unit referred to 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 underneath Walgreens’ core retail pharmacy division. However, Defend Well being Options — Walgreens’ subsidiary that helps well being system pharmacies — will stay underneath Walgreens’ U.S. healthcare division.
As a newly rebranded enterprise unit, Walgreens Specialty Pharmacy will embody an 18,000-square-foot innovation middle 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 medication, in accordance with Walgreens’ information launch.
Business specialists weren’t shocked by Walgreens’ announcement, saying that it is smart that an enormous 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 some other healthcare firm, wants progressive methods to remain aggressive.
“Specialty pharmacy companies are profitable and in excessive demand given medical developments and an getting older inhabitants,” she wrote in an e-mail. “That is an thrilling step for each Walgreens itself and the sufferers underneath 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 rely upon how properly Walgreens can “align its targets throughout enterprise items and make the most of the most effective instruments to streamline its workflows and seize progress.”
One other business chief — Rick Ratliff, CEO of MedAdvisor Solutions, 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 could be very properly positioned to assist sufferers entry specialty medicines sooner, which may have vital optimistic influence on healthcare outcomes,” he declared.
Many people who’re prescribed specialty medication must navigate a sophisticated course of to even entry their treatment, Ratliff famous. This course of typically entails prior authorization, verifying advantages protection and figuring out choices for monetary assist.
Which means that 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, equivalent to 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 treatment journey,” he stated.
Like Ratliff and Liu, Coresight Research CEO Deborah Weinswig additionally thinks that Walgreens’ resolution 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 greater revenue margins related to specialty medicines in comparison with conventional medication, she identified.
“Contemplating the current challenges offered to some in M&A, launching versus buying may be the most effective route to go proper now,” Weinswig wrote in an e-mail. “As we have a look at traits 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 business gamers which have already established specialty pharmacy companies, equivalent to CVS and Cigna’s Specific Scripts.
Walgreens’ transfer might additionally assist the corporate diversify its buyer base, Weinswig added. By offering specialty pharmacy companies, Walgreens may allow itself to each retain present prospects and appeal to new ones who require these advanced remedies, she defined.
And Weinswig believes Walgreens’ growth within the specialty pharmacy section is more likely to affect a number of broader traits within the business.
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. Higher competitors might put strain on smaller specialty pharmacies, which might doubtlessly result in a consolidation inside this area of interest of the market, Weinswig identified.
She additionally predicted {that a} extra aggressive specialty pharmacy market may spur improvements in treatment administration and affected person care packages — which might enhance therapy outcomes for sufferers, in addition to increase effectivity for the larger healthcare ecosystem.
“Walgreens’ transfer to determine a specialty pharmacy enterprise is a strategic initiative that not solely seeks to capitalize on a profitable section but additionally positions the corporate for enhanced aggressive leverage and buyer engagement throughout the evolving healthcare panorama,” Weinswig wrote. “This growth is poised to have profound implications on the business, selling aggressive dynamics, fostering innovation and probably catalyzing market consolidation.”
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