Shifts in $283B specialty pharma market present big opportunities

Within the $283 billion specialty pharma market, one critical but inefficient niche – specialty patient services –  has become an open target for disruption. A reckoning looms in 2022 for the beleaguered patient services sector, as two competing and unsustainable trends in patient services come to a head: While pharma spending on patient support continues to increase, patient utilization of these services keeps plummeting

Something has to give. The stakes for patients and specialty brands are too high to continue with a model that fails to deliver economies of scale.  


A “fractured mess” costs pharma brands $76 billion every year 

Over half of all drug spending in the U.S. is dedicated to the tiny category of specialty drugs, which comprise only 2% of all prescriptions, yet this colossal market is a fractured mess. The sheer volume of patient services and guidance resources – from apps to websites to other digital channels – has become an onslaught that overwhelms and confuses patients. This breakdown has led to a stunningly low rate of engagement with patient services, dropping in the past five years from a low 19% to an abysmal 16%. Eighty-four percent of patients fail to make use of any patient services support whatsoever. 

The result? In spite of ever-increasing investment, patient onboarding and adherence rates have remained unchanged or diminished for years. Up to 27% of prescriptions and therapies are abandoned or never started at all, costing pharma companies $76 billion in lost revenue annually.

The solution is not another app. Rather, specialty pharma leaders are recognizing that they must embrace a dominant force driving other parts of healthcare: Interoperability. That means requiring their vendors to step out of their silos and embrace a mindset of collaboration and connectivity. 


Interoperability is the course correction needed by specialty patient services 

The success of a specialty drug launch rises and falls based upon the success rates of getting patients to onboard therapy, or “number of patient starts” in industry jargon. To address the increased complexity of therapy onboarding, pharma brands have increased their investment in patient services to reach $26B in recent years, an investment that has resulted in a bombardment of resources to help patients through each part of their journey. The mindset driving this frenzy can best be summed up as “more is more.” More apps, websites, channels – anything to “meet patients where they are.”

Patient support vendors that handle single points of connection have become unwitting participants in this fragmented ecosystem, helpless to fix the problem because they all have their own processes and limitations. These vendors may have the best of intentions, hoping to ease the patient journey with distinct connection points. But in the process, they have simply added more silos to the journey.   

Pharma’s patient services teams are still RFI’ing, RFP’ing, and contracting each vendor separately. With vendor connectivity as an afterthought, patients end up hopping endlessly from silo to silo, using (or more often ignoring) resources provided by myriad stakeholders in their specialty medication journey.

Much of the specialty industry would love nothing more than a bold course correction that instills order upon a chaotic landscape. Interoperability is that course correction. 


New venture money is only reinforcing the silos

Looking back at patient services, companies like RelayHealth, CoverMyMeds and SureScripts became the market leaders by connecting silos. More recently, NFX partner James Currier pointed out how enterprise gateway marketplaces like Jiff, Candex, and represent a new model for efficiencies within large corporate bureaucracies, signaling the potential for entire industry transformations.

These lessons have not been absorbed within the patient services space, as venture and private equity money in this sector are still pouring mostly into upgrading existing silos with modern technologies. Truepill, for example, which is aiming to digitize the pharmacy, raised a total of $256 million since the company’s inception five years ago. General Atlantic invested in CareMetx, becoming a “digital hub” and acquiring Phyz Healthcare along the way.  TrialCard acquired Mango Health in an attempt to reinforce its hub with mobile app capabilities.

These are all still silos. No dominant connector (or EGM) has yet to emerge within specialty patient services.

A white space awaits.


The specialty market is overdue for an overhaul

The drive towards value-based care demands far greater efficiency than exists in the specialty market today. The solution lies in technological advances that are bridging the digital silos in the patient journey. 

Interoperability throughout the patient journey dismantles the fragmentation that plagues the specialty patient experience and hinders the success of patients and their medication brands. This shift involves thinking not just about an individual connection but about how to streamline every touchpoint along the way. It changes “meeting patients where they are” to “carrying them to where they need to be.”

Interoperability reframes how patients experience their journey, and it presents an exciting opportunity for pioneers to gain first-mover advantage. A goldmine of potential upside awaits those who recognize that the patient journey is in crisis and that the solution is interoperability.

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