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Titans of Industry: Specialty Pharmacy Reloaded

In 2022 Mark Cuban founded Cost Plus Drugs. The goal was simple: tackle the drug supply chain head on to lower the cost of medications for patients. Healthcare insiders (myself included) were skeptical.

Haven Health – the venture formed by Amazon, Berkshire Hathaway, and JPMorgan Chase was disbanded 3 years after it’s inception despite having staggering combined market power and 1.2 million US employees. The reason for failure was chalked up to "a lack of bipartisan legislation and well-intended round table talks to bring industry change". In this way, Cost Plus Drugs felt destined to meet this far too-common fate.

Fast forward 13 months, and Cost Plus Drugs has served 2 million customers, without spending a dime on advertising. Most recently, they announced "Blue Shield’s Pharmacy Care Reimagined Initiative." where the plan anticipates $500 million in pharmaceutical savings by partnering with Amazon Pharmacy and Mark Cuban's very own Cost Plus Drug Company. Principally, Mark Cuban's Cost Plus Drugs is able to provide exceeding savings for generics by "eliminating" PBM's and receiving a flat fee.

As Drug Channels notes, there may be reason to “Curb our Enthusiasm” about the specifics of the program, but let’s also consider how utterly rare and unheard of that “shit gets done” to put dollars back in patient pockets. Amidst congressional pressure to infuse transparency into Pharmacy Benefit Managers (PBMs), Cost Plus Drugs stands as a testament to real, actionable solutions that the market is embracing—without the need for bipartisan legislation.

My takeaway - We have much to learn from Mark Cubans ability to move markets, generate

value, and provide clear direct savings to patients from Cost Plus Drugs. However if Cost Plus Drugs & Mark Cuban is our titan of choice for the retail & direct to consumer pharmacy market which represents 50% of the total pharmacy spend, who is our titan for the other ~50% of the pharmaceutical market - Specialty Pharmaceuticals?

In 2021, specialty pharmaceuticals surpassed 50% of the total drug spend and is still gaining market share. Unlike the generics market where the cost cutting ethos of Cost Plus Drugs provides patient value, the specialty pharmaceutical delivery space has a unique challenge of its own: the personalized & continuous delivery of high touch clinical and operational services throughout the entire lifecycle of a patient's condition without error. Simply put, managing specialty medication delivery and access channels is a different ballgame with different players.

As specialty pharmacy is more complex, more players have a hand in ensuring patients get on, and stay on therapy. For a given specialty drug, the pharmaceutical manufacturer is the maestro on center stage - they create unique patient support and patient assistance programs, designate Hub service providers, select a network of specialty pharmacies, while dealing a heavy hand in the services provided to patients at each stage. When done correctly, this can play a massive role in minimizing abandonment, and maximizing retention, and gaining market share through "postmarket" approvals, all which have massive revenue implications.

Further than selecting services that make it as easy as possible for patients to get on, and stay on therapy, manufacturers require a massive amount of subjective and objective data points from hundreds of discreet stages of the patient enrollment and retention continuum beginning with the moment the physician writes the script, to the moment the patient drops therapy for another product. (Just imagine stacks of excel sheets with columns in the hundreds & it's surprisingly hard to understand if a "Joan Waters" is actually one person getting many Rx's or many people named Joan Waters getting one prescription)

It turns out - this robust feed of data to manufacturers is incredibly necessary. The specialty pharmaceutical care delivery model is incredibly complicated and requires constant fine tuning, the identification of gaps that lead to patient drop-off, abandonment (Such as a high volume practice that consistently fails to submit prior authorizations), and the generation of real-world outcomes that ensures plans can support the formulary adoption of the asset.

Here's the catch: I'd be hard pressed to find any single manufacturer that is receiving enough quality information across the specialty patient journey to consider this effort a success. Why? Lets look at some of the key challenges:

  1. Market Access teams - despite increasing budgets to dedicate to advanced patient services, most are challenged with permissions to view the data they are receiving by data aggregators due to de-identification concerns, and compliance teams playing catch-up to approve the increasingly personalized content to deliver personalized medicine initiatives.

  2. Hub providers - Deliver patient onboarding activities across benefits verification, co-pay program administration, and prior authorization support. Rely largely on manual patient interaction. (This is changing to become more digital centric)

  3. Patient Support Programs (PSP's) - Assist in enrolling patients into financial assistance programs and support provided by the manufacturer. Often the assistance program availability outside of a given manufacturer program is non-standard and is open for short windows prior to fund depletion. PSP's also deliver counselling and support on behalf of the manufacturer. These largely occur without insight from other support channels.

  4. Specialty Pharmacies - Deliver the bulk of patient engagement services through the lifecycle of the patient care. Specialty Pharmacies can deliver hub services, yet are largely responsible for the retention of the patient and assistance of re-authorization of prior authorization and continued collection of adherence, PRO, and clinical measures to support the use of therapy. There is a massive variance in the types of services & reporting provided by a given specialty pharmacy. For example a specialty pharmacy associated with a health system may deliver exceeding integrated care and have access to EMR's to populate patient enrollment & prior authorization information yet provide no data to manufacturers for analysis. Inversely specialty pharmacies unaffiliated with health systems may possess field teams that develop relations with regional providers and offload administrative work from physicians to generate new specialty prescription volumes.

What can Elon Musk teach pharmaceutical Manufacturers?

Of all possible voices to explain the competitive advantage that Elon Musk has created, the CEO of Ford Motors offers a revealing glimpse into how Elon Musk creates a unified customer centric experience. In a recent interview, Ford's CEO highlighted Tesla's achievement of creating a unified software, data, and digital ecosystem that rapidly translates into value for end users:

How does this relate to specialty pharmacy? From the lens of a manufacturer let's consider a simple innovation that patients want and would provide valuable insights to manufacturers: Embed a series of personalized videos with an information gathering assessment prior to the video, and address each patients unique hesitations and challenges to their specialty treatment journey during the first fill and each fill thereafter.

For the manufacturer to implement this program, the brand & market access team would have to:

  • Generate the video content (typically outsourced)

  • Perform multiple medical legal reviews of the content generated by outsourced marketing team

  • Update their CRM to receive the output of the patient experience

  • Create a new contract with their Hub (Assuming the hub has the technology)

  • Create a new contract with the specialty pharmacy (Assuming the specialty pharmacy has the data and ability to align the video to the specific patient touchpoint. For reference most specialty pharmacies use a generic two way text algorithm.)

  • Update their contract and relationship with the data aggregator to receive this new information and populate the data into the CRM to determine the patient impact.

Sound familiar? The specialty pharmacy distribution network IS as fragmented as what the ford CEO describes.

Now let's consider what would happen IF pharmaceutical manufacturers could direct the patient experience. The ultimate application of this vision would be to provide brand and market teams with a single interface to manage each patient touchpoint and generate the ultimate experience for each stage of the specialty journey across patient support programs, hubs, co-pay assistance, free drug, and specialty pharmacy services regardless of the site or channel. Ultimately patients don't care about who is providing their service as long as they receive therapy.

If pharmaceutical manufacturers COULD adopt this strategy, it would immediately address the 94% of patients that greatly desire digital updates regarding care, accelerate turnaround time, generate drug specific PRO for post-marketing and enhance retention. Just as Tesla drivers experience a seamless integration of software that enhances their driving experience, patients could navigate their complex medical journeys with unprecedented ease.

Transparency receives a much-needed boost. Patients can track every step of their pharmaceutical journey, while manufacturers gain insights into the effectiveness of their medications in real-world scenarios. The same transparency that Elon Musk's Tesla has brought to the automobile industry can revolutionize the pharmaceutical sector, promoting trust and patient-centric care.

Where are we today?

CassianRx is helping specialty pharmacies, hubs, and manufacturers build the infrastructure to make this a reality. Instead of a single player coming in to save the day (Or until Cassian joins teams with Elon), we are well positioned to progress towards this vision in a stepwise fashion.

Step 1 - Give Specialty Pharmacies the ability to customize & personalize the specialty treatment journey through digital technology. (Many Specialty Pharmacies are completely beholden to the limitations of their dispensing software)

Step 2 - Provide manufacturers the ability to embed brand and therapy specific support within the engagement channel through transparent & real-time technology.

Step 3 - Create digital & data alliances between Specialty Pharmacies, Hubs, PBM's and PSPs via integrated engagement and reporting technology.

Step 4 - Provide predictive, archetypal, and AI enabled patient engagement optimization from the moment the Rx is written across the entire treatment journey

The healthcare sector is ripe for transformation, and the potential entry of a visionary like Elon Musk could herald a new era. Just as Mark Cuban demonstrated, shared lessons & insights from other industries can provide invaluable insight that clean up some of the largest challenges in healthcare today. Cassian is highly motivated to partner with players who want to make this a reality.


About the Author

Dr. Collin Wolf | President CassianRx

Dr. Collin Wolf is a PharmD & Preceptor from the University of Pittsburgh School of Pharmacy. Collin is driven by making the best patient experiences for patients within Specialty Pharmacy, Hub & Pharmaceutical Manufacturer Channels.

To learn more contact: | 908-303-8924


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