Are Oncology-Owned Retail Pharmacies the Answer to Keep Practices Viable?

Eroding reimbursement rates and a shift from intravenous (IV) to oral chemotherapy are combining to threaten the viability of many community oncology practices. That’s why community oncologists and practice managers might consider incorporating a practice-owned oncology retail pharmacy, which could provide a valuable, new revenue stream to minimize the financial losses from the greater use of oral oncolytics, according to a study published in the October issue of Community Oncology.

It’s estimated that about 35% to 40% of the oncology drugs in development are oral agents, and an estimated 17% of oncology patients in the US receiving chemotherapy are prescribed oral oncolytics. Although somewhat more convenient, oral oncolytics are associated with poorer patient adherence—depending on the medication type, adherence rates have been reported from 17% to 100%.

From a patient care perspective, practice-owned pharmacies can implement adherence programs provided by the entire care team, including pharmacy staff who have specialized knowledge specific to oral oncolytics. Also, fulfillment rates at retail pharmacies have been reported as low as 75% for some oral chemotherapies, and usually fall when patients have higher out-of-pocket costs. Patients might not have any recourse when filling prescriptions at retail pharmacies. Practice-owned pharmacies, on the other hand, can address financial concerns that patients might have, thus improving fulfillment rates.

There are two types of oncology pharmacies for consideration: a physician dispensing pharmacy and a practice-owned oncology retail pharmacy, according to the study.

A physician dispensing pharmacy operates under the license of the physician and does not require a pharmacist on site to dispense medications. Some states, however, do require additional licensing for physicians, so check with your local medical board. The major benefit of this type of pharmacy is low overhead because a pharmacist does not have to be on site. However, the absence of a pharmacist means the practice loses out on the specialized knowledge about oncolytics that a pharmacist brings. In addition, some payers do not recognize these types of pharmacy arrangements—thus affecting revenue streams.

In a practice-owned oncology retail pharmacy, a state-licensed pharmacist who is on site can oversee patient care. Additionally, national payers often recognize this type of arrangement, and thus can lead to increased revenue streams for the practice.

Payers will usually only cover chemotherapies filled by pharmacies they contract with, which are likely retail and specialty pharmacies. To address this, a practice-owned pharmacy might consider obtaining accreditation as a URAC (formerly Utilization Review Accreditation Commission) specialty pharmacy, thus becoming an in-network pharmacy for all providers who direct prescriptions to specialty pharmacies.

Given the current reimbursement landscape and the shift to greater use of oral oncolytics, incorporating either a physician dispensing pharmacy or a practice-owned retail pharmacy should be considered by the community oncologist and practice manager to maintain the practice’s economic viability.

Source: Patton JF, Harwin WN, McCullough SW. Retail pharmacies within community oncology practices: A win-win for patients and practices. Comm Oncol. 2013:10(10): 306-308. http://www.oncologypractice.com/fileadmin/content_pdf/co/CO_oct_306_Patton_Feature.pdf