Dignity Health is the latest health system to enter the specialty pharmacy market.
Dignity launches its own specialty pharmacy
The not-for-profit provider launched its own program to distribute medications for more than 20 complex diseases, and it plans to expand services to its broader national network of CommonSpirit Health.
Peggy Sanborn, vice president of strategic growth, mergers and acquisitions, and partnership integration at Dignity Health, said the health system began its specialty pharmacy program at the end of last year in its Phoenix market and has since expanded into Sacramento, Calif. It will enter six more of its service markets over the next few months.
The specialty pharmacy located at Dignity Health's St. Joseph's Hospital and Medical Center in Phoenix will serve as the central hub for the program and will service all Dignity Health locations.
"We're really looking at overall patient demand and opportunities to provide services that may be challenging to acquire in a particular geography and where really there's an unmet need that we are going to be able to come in and address," Sanborn said.
Ultimately, the health system wants to grow the program across CommonSpirit's network, which was formed when Dignity and Catholic Health Initiatives merged in February making it the second the largest not-for-profit health system with 142 facilities and more than 700 care sites across 21 states.
The specialty pharmacy program is a joint venture with Shields Health Solutions, a company that helps hospitals set up specialty pharmacies.
Currently, the system has no plans to expand the pharmacy's scope to dispense nonspecialty drugs, and it's focusing on expensive, specialty drugs in part because orders can take several weeks to get to patients.
A recent analysis on prices for specialty drugs in Medicare Part D and Medicaid found that in 2015 brand-name specialty drugs accounted for 30% of total net spending on prescription drugs in both programs while making up only 1% of all prescriptions dispensed in each program.
Specialty pharmacies were once the sole domain of health insurance companies and pharmacy benefit managers, but a growing number of hospitals in recent years have opted to form their own specialty pharmacies in an effort to reduce the cost burden of such drugs.
A 2016 national survey of pharmacy practices in hospital settings conducted by the found that 9% of the more than 1,100 hospitals surveyed reported having a specialty pharmacy but that they were more common among large hospitals, with 47% of facilities with 600 or more staffed beds reporting having a specialty pharmacy.
Matt Conway, executive vice president of client operations at Shields, said hospitals have become increasingly interested in specialty pharmacies over the past three years as therapies have become costlier and more complex.
He anticipated more hospitals will look into forming their own specialty pharmacies as they follow larger systems that are setting the trend.
"It's a topic that's become top of mind for pretty much every hospital that we speak to," Conway said.
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