Q&A: A new twist on specialty Rx
Specialty pharmacy is expanding beyond its traditional base as a central-fill and mail-order distribution model for patients. A new, community-driven model is emerging, led by a fast-growing network of integrated,
community-based specialty providers based in Drexel Hill, Pa.
The four-year-old company is called Community Specialty Pharmacy Network. Gerry Crocker, a veteran of Cardinal Health, took over as CEO of CSPN in June 2010 after a three-year stint as CEO of Alexandria, Va.-based CARE Pharmacies. Nick Calla joined the company in April as VP industry relations, after forging a career with Walgreens Specialty Pharmacy, Eckerd Health Services and Oncology Pathways.
In late June, Drug Store News spoke with the two leaders about CSPN’s community-based approach to specialty pharmacy and its role in a more integrated patient care model.
DSN: What is CSPN’s mission in the healthcare market, and how is it different from a traditional specialty pharmacy operation?
Gerry Crocker: Four years ago, I was with Cardinal Health … and in my customer base of some 200 retail independent and long-term care pharmacies, there were a few individuals who had been in the specialty space since the ’80s with the onset of HIV.
One of those individuals, Ed Dillon [now CSPN’s president], was kind of a visionary. He saw some challenges coming to community pharmacy in continuing to have access to specialty lives — and more importantly, with the erosion of access to specialty lives as an operator in that space [and being] able to get into participating network contracts as a specialty pharmacy.
These significant specialty businesses were in danger of being uprooted by [pharmacy benefit managers] operating their own specialty pharmacies. So Ed asked me to put together a group of peers from my customer base. I put him together with six other owner-operators who were in the specialty space. They all agreed they had a common challenge, and they knew they had to find a way to contract as a specialty provider network on a national level.
The first step was to put the network together and measure the capabilities we would have to have as a network to participate in contracts on a national level with PBMs, payers and the [managed care organization] community.
DSN: Without the network, you’re saying it would have been impossible to compete for those national contracts.
Crocker: Right. They were all very successful, but that success can be diminished if there’s difficulty accessing these specialty networks. And with control of [oncology patients] being consolidated more and more into a few PBMs and plans, they saw they had to get something together to allow them to contract, which would give them the permanency they were looking for.
DSN: Once this network of independent specialty pharmacies was created, how did it make its presence known as a national provider network that could go head to head with the PBMs?
Crocker: Today, there are 180 locations operating in 42 states, but we cover 49 states through our relationship with OncoSource [a division of Cardinal Health that provides mail-order and limited-distribution specialty meds and support services]. That’s one component that allows us to contract on a national level because we have national coverage capability.
The process was about finding and identifying the most successful owner-operators out there in specialty and having a credentialing process for them to join the network. Being approved meant they had certain capabilities, like 24/7 clinical support, private consultation rooms, prior-authorization insurance specialists to help with specialty claims and the ability to go out and market directly with prescribers in their area. Those are the fundamental criteria, and these operators have made significant investments to [provide these services].
DSN: How big is the CSPN operation?
Crocker: Through our 180 locations, we do a total of $2.2 billion in total Rx sales and $600 million in specialty. We are actively servicing 45,000 specialty lives.
Nick Calla: That makes us the 10th largest provider of specialty products in the country. Now, we’re trying to gather up all the good work by these high-level, high-touch pharmacies and present them as a collective unit that’s quite powerful.
DSN: It sounds like thus far it’s been under-the-radar as a national entity.
Calla: It has been. But at this point, we feel we’re on the cusp of breaking out with this model. We’re at the stage of proving out the concept and the value proposition to all the different stakeholders in the market. From our standpoint, a lot of that involves the managed care organizations and the manufacturing community.
DSN: How successful have you been so far in reaching the manufacturing community and changing their view of the company as an integrated national network of high-touch, fully engaged pharmacy providers? Have you been able to fully leverage this network so far in terms of setting up purchasing contracts and other objectives?
Calla: The response has been very positive. We’re already working on distribution agreements with all the major specialty stakeholders, and we’re in discussion to launch some patient management initiatives. We’re having multiple discussions with manufacturers about assistance with co-pay programs and various other patient assistance programs. We’re also talking with them about our data capabilities.
DSN: Talk about those data capabilities and what you’re trying to achieve with your data-gathering efforts.
Calla: We have a relationship with ProMetrics [a data and analytics provider to the specialty community]. They’re our back-end data aggregator and have allowed us to represent ourselves as a single entity … in terms of structuring data agreements, patient management pull-through agreements and distribution agreements. And that’s perceived as a big positive by the manufacturing community.
We’ve even begun discussions about getting our pharmacies involved in distribution programs for products with limited access — like those that carry heavy [risk evaluation and mitigation strategy] requirements.
We will soon be able to deploy standard clinical protocols across our network.
DSN: Will these capabilities enable CSPN to compete on a more level playing field?
Crocker: It is our goal to look and feel like one entity to our contracting partners in the specialty arena. We’re matching the capabilities of our mail-order [and] central-fill competitors, while we leverage our high-tech, high-touch solution in a network of “Centers of Excellence.”
DSN: How does CSPN’s care model work?
Crocker: All the initial consultations are performed in a face-to-face setting providing the optimal environment for initiating a patient on therapy. We believe this environment provides the best possible opportunity to impact patient compliance and adherence.
Obviously, there’s refill reminders, proactive calls, 24/7 clinical support for the patients [and] assistance programs from a financial standpoint — it’s a comprehensive wraparound service.
Calla: What we bring is that localized touch and feel. In our model, the patient by and large can walk into their pharmacy, receive their product, have the face-to-face counseling and have that comfort level to know that their pharmacist, who is very aware of their conditions and the issues around their conditions, is right there and ready to help. It’s a high-tech, high-touch model.
DSN: As opposed to patients just having access to pharmacists via the phone. Does that message resonate with payers, particularly those that aren’t under binding contractual arrangements that keep them from using alternate networks?
Calla: We’re not looking to take the place of the large central-fill pharmacies. There’s certainly a place for that kind of model. What we’re looking to do is create an alternative to that model where appropriate. It’s a hybrid: a higher level of patient interaction than a traditional retail outlet, and we think we can fit this network side by side in a lot of managed care networks with the larger specialty pharmacy operations.
Crocker: What we offer is the ability to manage and improve compliance across complex disease states. We believe that it’s going to be a major advantage for us as we develop our technology capabilities and align them with our clinical expertise across 180 locations, with an average of five pharmacists per pharmacy. We’re also working on some pharmacist credentialing programs for specific disease state management.
A significant problem in specialty pharmacy today is that 15% of all original scripts never get filled. The contributing factors typically are high co-pay levels, the severe side effects and the lack of consultation and drug review. We can offset these factors through face-to-face consultations and personalized benefit investigation.
DSN: Have you signed any national contracts yet?
Crocker: Our first is with [PBM] MedImpact Healthcare Systems … [for] a local specialty pharmacy provider solution. We’ll be going to their clients and prospective clients as the alternative to mail-only.
It’s exciting news for us to get that level of support and for them to realize that there is a need for an alternative to a mail-only solution. They’re one of the largest PBMs in the country, with about 30 million lives.
DSN: Does CSPN focus most heavily on a specific set of disease states for specialized care?
Calla: Some of the core disease states we’re concentrating in today cover the HIV population, the hepatitis C population, oncology, rheumatoid arthritis and multiple sclerosis. Also, transplant [rejection] figures very prominently in our portfolio.
We’re also trying to structure a role for community pharmacy even in some of the orphan disease states, which traditionally have been more of a central-fill activity.
35,000 users networking with Pharmacist Society
Pharmacist Society — which Drug Store News introduced at the National Association of Chain Drug Stores’ 2010 Pharmacy and Technology Conference in San Diego and launched in November 2010 under a partnership with professional networking website developer Skipta — has grown to more than 35,000 members and combines networking, job searching, continuing education and other services in a regulated user environment. Pharmacists, pharmacies and pharmacy schools can create private pages for their employees, while pharmacists can store documents and drug companies can provide members with product education.
“Pharmacist Society is quickly becoming the primary destination where pharmacists collaborate, communicate and connect,” DSN publisher Wayne Bennett said.
Upcoming features include mobile apps that will allow pharmacists to engage and communicate at any time during their day.
“It’s exciting to see the engagement from pharmacists from across all areas of pharmacy, from hospitals to retail to clinics,” Skipta president and CEO Ted Search said. “This site is becoming the true voice of pharmacy.”
And even with the rapid growth in membership, the site has continued to grow.
“We have seen terrific growth in the utilization in Pharmacist Society. Our overall traffic in July was greater than the entire first quarter 2011 period,” Bennett said. “We are seeing more retailers and suppliers coming on board, and Pharmacist Society is quickly becoming the No. 1 destination for pharmacist social networking.”
Back-to-school deals target shoppers looking for low costs
Retailers, expecting thrifty behavior from consumers, are starting the back-to-school season with early promotions. “Retailers are already running door-buster promotions,” said Perry Smith, an analyst with the NPD Group. “The consumer has been holding out for last-minute shopping hoping for the best deals. In some cases, people are shopping after school starts.”
PriceGrabber’s “Back-to-School Shopping Forecast” revealed that 49% of back-to-school shoppers plan to make purchases in August, compared with 38% in 2010. Only 14% said they would begin shopping in June, versus 26% in 2010, and 41% would visit retailer websites to print out coupons.
In an effort to discourage consumers from cherry-picking items on price, some retailers have created loyalty shopping programs. Staples issued a 15%-off pass for the entire season, and Kmart in July launched its “Epic Year, Epic You!” campaign offering customers the ability to reserve purchases by making payments throughout the summer and pick up purchased items at a Kmart store near students’ college campuses. Grocer H-E-B signed celebrity Jennette McCurdy, co-star of Nickelodeon’s “iCarly,” to promote its back-to-school campaign.
Smith said consumers have been sticking to their school lists and that sharp-priced basics are the category stars. Smith also highlighted 3M’s tape dispensers in stiletto heel or apple shapes, and folders and notebooks that can be colored in with markers.
The article above is part of the DSN Category Review Series. For the complete Back To School Buy-In Report, including extensive charts, data and more analysis, click here.