As you will note below, the specialty pharmacy industry remains quite diverse—despite the concentration of dispensing revenues within a small number of companies.
Our proprietary analyses have identified more than 1,200 locations that have achieved specialty pharmacy accreditation from one of the two major independent accreditation organizations.
Overall accreditation growth appears to be slowing. However, pharmacy locations owned by healthcare providers—hospitals, health systems, physician practices, and providers’ group purchasing organizations—now account for nearly 40% of all accredited specialty pharmacy locations.
Read on for a bite of our arithmomania.
LET’S COUNT, COUNT!
This post is adapted from Chapter 3 of our 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
Even DCI can’t count the total number of pharmacies that dispense specialty drugs, because any state-licensed pharmacy can designate itself as a specialty pharmacy. We therefore counted every pharmacy location that had been accredited by one of the two organizations that now dominate accreditation for specialty pharmacies: Other organizations offer specialty pharmacy accreditation, but they lag far behind ACHC and URAC.
Read on for a bite of our arithmomania.
LET’S COUNT, COUNT!
This post is adapted from Chapter 3 of our 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
Even DCI can’t count the total number of pharmacies that dispense specialty drugs, because any state-licensed pharmacy can designate itself as a specialty pharmacy. We therefore counted every pharmacy location that had been accredited by one of the two organizations that now dominate accreditation for specialty pharmacies: Other organizations offer specialty pharmacy accreditation, but they lag far behind ACHC and URAC.
- Since our previous analysis, the Center for Pharmacy Practice Accreditation (CPPA) has been disbanded. Separate accreditation services are now offered by two former owners of CPPA—the National Association of Boards of Pharmacy and the American Society of Health-System Pharmacists.
- The Joint Commission also offers accreditation for Specialty Pharmacy within its Home Care Accreditation program.
Most of the locations accredited by these three other organizations also are accredited by ACHC and/or URAC.
You can find additional information on our methodology at the bottom of this article.
ONE PHARMACY, TWO PHARMACIES…AH AH AH AH AH!
As of the end of 2020, we had identified 1,207 unique pharmacy locations that had achieved specialty pharmacy accreditation from ACHC and/or URAC. The 2020 figure marks a 14% increase over the 1,062 locations in 2019 and is more than triple the 2015 figure. However, growth in the number of accredited locations was the slowest since we began tracking it.
As we discuss at the bottom of this article, our methodology accounts for the growing share of pharmacy locations that have accreditation from more than one organization.
HOSPITALS ARE STILL BATTY FOR SPECIALTY PHARMACY
Pharmacies that compete to dispense specialty therapies are owned by a diverse set of organizations. These pharmacies are operated by pharmacy benefit managers, retail chains, health plans, pharmaceutical wholesalers, physician practices, hospital systems, and other organizations. There are also many independent specialty pharmacies.
The chart below quantifies this diverse specialty market participation by categorizing, per corporate ownership, the 1,207 unique locations that had achieved specialty pharmacy accreditation from ACHC and/or URAC.
Observations:
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Not everything that counts can be counted, and not everything that can be counted counts. But as our obsessive enumeration shows, the specialty boom is reshaping pharmacy market competition.
COMMENTS FOR COUNTS
A few comments on Drug Channels Institute’s counting:
You can find additional information on our methodology at the bottom of this article.
ONE PHARMACY, TWO PHARMACIES…AH AH AH AH AH!
As of the end of 2020, we had identified 1,207 unique pharmacy locations that had achieved specialty pharmacy accreditation from ACHC and/or URAC. The 2020 figure marks a 14% increase over the 1,062 locations in 2019 and is more than triple the 2015 figure. However, growth in the number of accredited locations was the slowest since we began tracking it.
[Click to Enlarge]
As we discuss at the bottom of this article, our methodology accounts for the growing share of pharmacy locations that have accreditation from more than one organization.
HOSPITALS ARE STILL BATTY FOR SPECIALTY PHARMACY
Pharmacies that compete to dispense specialty therapies are owned by a diverse set of organizations. These pharmacies are operated by pharmacy benefit managers, retail chains, health plans, pharmaceutical wholesalers, physician practices, hospital systems, and other organizations. There are also many independent specialty pharmacies.
The chart below quantifies this diverse specialty market participation by categorizing, per corporate ownership, the 1,207 unique locations that had achieved specialty pharmacy accreditation from ACHC and/or URAC.
[Click to Enlarge]
Observations:
- A minority of accredited specialty pharmacy locations are now independently owned businesses. This category includes private independent pharmacies, pharmacies owned by private equity firms, and independently owned franchise locations.
- Four out of 10 specialty pharmacy locations are owned by healthcare providers. This category includes hospitals, health systems, physician practices, and provider group purchasing organizations. Providers’ share of accredited specialty pharmacy locations has more than tripled, growing from 11% of locations in 2015 to 39% of locations in 2020. As I discuss in Hospitals Continue Their Startling Expansion into Specialty Pharmacy, nine out of 10 large hospitals now operate a specialty pharmacy.
- Location data do not correspond with the market share of specialty prescriptions or specialty dispensing revenues. As we show in Drug Channels Institute's list of the top 15 specialty pharmacies, the top four specialty pharmacies accounted for 75% of total prescription revenues from pharmacy-dispensed specialty drugs. These large pharmacies are fully or partially owned by one of the largest PBMs—which are themselves part of large vertically-integrated organizations.
Not everything that counts can be counted, and not everything that can be counted counts. But as our obsessive enumeration shows, the specialty boom is reshaping pharmacy market competition.
COMMENTS FOR COUNTS
A few comments on Drug Channels Institute’s counting:
- Our analyses are based on data we have independently gathered from the accreditation organizations.
- We analyzed pharmacy locations, not the number of companies. Many specialty pharmacy businesses have multiple locations, each of which is counted separately.
- Some pharmacies seek accreditation from more than one organization. As we note above, we accounted for potential double-counting when computing the total number of unique pharmacy locations with specialty pharmacy accreditation. We have identified these locations based on the pharmacy’s address.
- The data exclude locations with provisional, conditional, and expected accreditation.
- Some locations are accredited if they are “spokes” associated with a specialty pharmacy services hub within a retail chain. We excluded the individual spoke locations from our analysis to maintain comparability when counting the number of accredited specialty pharmacies.
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