Growth of specialty lite may create challenges for Rx stakeholders

By George Van Antwerp, managing director, Deloitte Consulting LLP

A few months ago, I led a panel discussion at a pharmacy conference that explored the growth of specialty lite drugs. Attendees included a mix of retail and specialty pharmacies, health plans, pharmaceutical manufacturers, technology companies, wholesalers, and group purchasing organizations (GPOs).

While there is no standard definition, specialty lite typically refers to pharmaceuticals that meet a certain wholesale acquisition cost (WAC) threshold of at least $500 a month but less than $2,500 (between $6,000 and $30,000 a year) and have specific service-level requirements.¹ Like specialty drugs, specialty lite products are generally managed by payers and most, if not all of those products, require a prior authorization². Although specialty lite drugs are expensive, they don’t meet the definition of a “specialty” product and are usually filled at retail pharmacies. However, there are three key challenges in filling specialty lite medications at retail pharmacies:

• Most retail pharmacies are already dealing with staffing shortages,³ and specialty lite medications require prior authorization and clinical discussions with patients;⁴
  
• These medications are often written by primary care physicians instead of specialists whose office staff might not be as familiar with prior-authorization requirements from payers; and
• These medications often have additional storage requirements, which can mean higher inventory costs.

Challenges, and potential solutions, for specialty lite drugs

Despite the challenges, drug manufacturers continue to produce products that fall into the specialty lite category (e.g, certain migraine medications, anti-psychotics, dermatology products, and GLP-1s).⁵ But, if these medications are too expensive for retail—and not costly enough for specialty or for traditional hub services—how can stakeholders help ensure a pleasant experience for consumers who need these medications?

Here are four potential solutions that were discussed during the conference session:

1. ePA: While electronic prior authorization (ePA) has been around for years, an increase in prior authorizations, combined with more focus on the burden it tends to cause, has driven renewed interest in using interoperability and artificial intelligence (AI) to help streamline the process.⁶
   
2. e-BV: Benefit verification is one of the big challenges for specialty drugs. The ability to digitize benefit verification could be essential for driving technology and AI investments.⁷
3. Digital: For all medications, the ability to engage the consumer for adherence purposes can be a challenge. A high-cost, high-touch solution is generally not feasible for specialty lite products. However, highly personalized digital tools, if created at scale, could be effective in meeting patient needs.
4. Dedicated hubs: The traditional hub-services model can be too costly for specialty lite medications. This appears to have created an opportunity for an effective lower-cost model that leverages ePA, e-BV, and digital solutions.

Conclusion

When specialty lite emerged as a category over a decade ago, the average prescription was about $1,500. As more products have fallen into this category, the average cost has increased significantly. Specialty lite could continue to be a growth category, which would likely spur innovation by operating in a challenging niche for pharmacies, payers, and service providers.

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Endnotes:

^{1_{Defining ‘Specialty Lite', Managed Healthcare Executive, April 29, 2024}}

^{2_{Specialty lite model goes beyond improving adherence, Pharmacy Times, April 30, 2019}}

^{3_{Pharmacies are struggling to refill their own ranks, Axios, February 6, 2024}}

^{4_{Specialty lite model goes beyond improving adherence, Pharmacy Times, April 30, 2019}}

^{5_{Adding might to ‘specialty lite’, Pharmaceutical Commerce, April 8, 2022}}

^{6_{Specialty lite and emerging distribution models, July 12, 2023}}

^{7_{Adding might to ‘specialty lite’, Pharmaceutical Commerce, April 8, 2022}}

^{8_{Jump into ‘specialty lite’ while you still can, National Community Pharmacists Association, September 2, 2022}}

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