Walgreens introduced this week that it’s expanding its specialty pharmacy choices to incorporate cell and gene remedy providers. The transfer may permit Walgreens to play a much bigger function in a rising market — research shows that specialty drugs now account for greater than half of the nation’s prescription drug spend, regardless of making up a small proportion of whole prescriptions.
With the announcement, the pharmacy big launched a newly built-in enterprise unit referred to as Walgreens Specialty Pharmacy. The unit encompasses most of Walgreens’ belongings within the specialty pharmacy area, together with specialty pharmacy subsidiary AllianceRx.
This unit will fall below Walgreens’ core retail pharmacy division. Alternatively, Defend 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 embody an 18,000-square-foot innovation middle in Pittsburgh, almost 300 neighborhood 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 response to Walgreens’ information launch.
Trade specialists weren’t shocked by Walgreens’ announcement, saying that it is sensible that an enormous pharmacy firm would wish to deepen its presence within the quickest rising phase of drug spend.
Pleasure Liu — CEO of Plenful, an organization that gives automation instruments for pharmacies — famous that healthcare is evolving, and Walgreens, similar to every other healthcare firm, wants revolutionary methods to remain aggressive.
“Specialty pharmacy providers 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 providers, 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 nicely Walgreens can “align its objectives throughout enterprise models and make the most of the very best instruments to streamline its workflows and seize development.”
One other trade 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 huge scale and the spectacular variety of folks it engages every day.
“Walgreens may be very nicely positioned to assist sufferers entry specialty drugs quicker, which could have vital constructive influence on healthcare outcomes,” he declared.
Many people who’re prescribed specialty medication should navigate a sophisticated course of to even entry their medicine, Ratliff famous. This course of usually entails prior authorization, verifying advantages protection and figuring out choices for monetary help.
Because of this specialty pharmacy providers aren’t at all times 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, akin to Walgreens, the worth proposition for these people will increase considerably — along with the truth that they are going to get on remedy quicker and achieve success of their medicine journey,” he stated.
Like Ratliff and Liu, Coresight Research CEO Deborah Weinswig additionally thinks that Walgreens’ determination to go deeper into the specialty pharmacy market may yield a number of strategic advantages.
Getting into this market gives substantial income alternatives because of the increased revenue margins related to specialty drugs in comparison with conventional medication, she identified.
“Contemplating the current challenges introduced to some in M&A, launching versus buying is perhaps the very best course to go proper now,” Weinswig wrote in an electronic mail. “As we have a look at developments inside healthcare, there’s a clear shift towards offering extra built-in healthcare options.”
She famous that this enlargement positions Walgreens to higher compete with key trade gamers which have already established specialty pharmacy providers, akin to CVS and Cigna’s Categorical Scripts.
Walgreens’ transfer may additionally assist the corporate diversify its buyer base, Weinswig added. By offering specialty pharmacy providers, Walgreens would possibly allow itself to each retain current prospects and entice new ones who require these complicated therapies, she defined.
And Weinswig believes Walgreens’ enlargement within the specialty pharmacy phase is more likely to affect a number of broader developments within the trade.
She thinks the addition of Walgreens within the specialty pharmacy market may intensify competitors, which may result in extra aggressive pricing and improved service high quality. Larger competitors may put strain on smaller specialty pharmacies, which may 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 remedy outcomes for sufferers, in addition to increase 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 phase but additionally positions the corporate for enhanced aggressive leverage and buyer engagement inside the evolving healthcare panorama,” Weinswig wrote. “This improvement is poised to have profound implications on the trade, selling aggressive dynamics, fostering innovation and probably catalyzing market consolidation.”
Photograph: Joe Raedle, Getty Pictures
