Tuesday, May 21, 2013

Armada 2013: Specialty Pharmacy Gets More Competitive

In early May, I hit the always-energizing Armada Specialty Pharmacy Summit in Las Vegas. Larry and Robert Irene certainly know how to throw a top-quality networking event. And the Wynn, my favorite Vegas hotel, never disappoints.

In violation of Vegas code, I'll tell you what happened there…or at least the part related to the specialty pharmacy market.

The industry’s rapid growth has created a large, diverse specialty pharmacy marketplace. But at this year's Armada Summit, it’s clear that all levels of the specialty industry are also becoming much more competitive. Below are my observations from the meeting, a brief video interview discussing marketplace competition, and a bonus photo of me hard at work in Las Vegas.

Special thanks to the many, many Drug Channels readers who introduced themselves during the Summit. I truly enjoyed our conversations and your insights, and I feel privileged to have such enthusiastic readers.

To coincide with the 2013 Armada Summit, the Drug Channels Institute is offering special savings on our 2012–13 Economic Report on Retail, Mail, and Specialty Pharmacies. Use discount code ARMADA2013. The discount expires on May 31, 2013.


Armada is on a heater. Once again, I was impressed by Armada’s diversity, which covered all industry segments. Armada claimed 2,200 attendees, another new record. It’s even more impressive when you consider PCMA’s also-excellent specialty pharmacy meeting, which occurred just six weeks earlier on the same property. I was only mildly embarrassed that the stickman at a craps table remembered me!

Pharmacy is becoming specialty. The Summit was filled with an ever-growing number of pharmacies dispensing specialty drugs. Not only did I run into people from independent specialty pharmacies, I also met many from drugstore chains, health plans, wholesalers, hospital systems, long-term care, pharmacy benefit managers (PBMs), and others. The shift to specialty is another consequence of the generic wave, which is commoditizing retail pharmacy dispensing. See What Free Generic Lipitor Says about Pharmacy's Future and Drugstore Sales Drop Along with Drug Trend: Implications for Retail Pharmacy.

Big pharma is investing. New drug pipelines at the largest pharmaceutical manufacturers are overflowing with specialty products. So I wasn't surprised to see that these companies had a bigger presence at Armada than ever, consistent with my current consulting focus on helping manufacturers launch specialty drugs. Pharma companies dominated the exhibit hall, which looked to be twice as large as 2012. As specialty grows, the traditional pharmacy trade associations should watch their backs, especially given an apparent trend to mega-events with reduced pharma focus and newly-restrictive attendance policies.

Dispensing specialty drugs is not commoditized…yet. The market is still booming, but I spot early signs of margin compression for undifferentiated specialty pharmacies. This year’s Summit was filled with large and small pharmacies networking with the manufacturers that control access limited network drugs. URAC, the most widely recognized accreditation organization, now lists almost 80 companies as having “Full Accreditation” or being “In Process.” Visit the URAC Directory of Accredited Companies and search for “Specialty Pharmacy Accreditation.”) I expect more than 100 by the 2014 Armada Summit. Go dig up your Porter Five Forces framework to understand what’s happening.

Specialty competition is growing everywhere. The resourceful Randi Hernandez of Specialty Pharmacy Times grabbed me for this brief video interview. Click here if you can't see the video below. Thanks, Randi!

Keynote notes. I enjoyed hearing Dr. Eric Topol’s futuristic view of medicine. Ironically, Dr. Topol’s PowerPoint deck crashed during his presentation. Let’s hope that never happens when a robot doctor is treating you! And I was surprised that Dr. Topol’s futuristic techno-talk was accompanied by … stacks of his hard-copy book! Dennis Miller’s talk was very funny, but an odd fit. I don't want to go off on a rant, but Dennis Miller advising specialty pharmacies is like Dante Alighieri taking clarinet lessons from the Elephant Man.


“It was a grueling trip, honey. All work and no play.” – me, before my wife saw the picture below

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