Cigna's Strategic Shift: Exploring Growth in Specialty Pharmacy and E-Treatment

Current trends and customer adoption in specialty pharmacy

Current trends in specialty pharmacy show double-digit growth driven by innovative products and services. Companies like UNH and Walgreens are focusing on specialty trends and unique offerings, while CVS emphasizes biosimilar adoption to lower costs, indicating strong customer adoption and evolving market dynamics.

"But we’re experiencing all-in, including pharmacy, double-digit trends this year, and when you look at the core trends associated with the baseline in the bids and the baseline that we carried into 2025, it’s consistent with the experience that we are seeing year to date, that we’ve carried through for the next 18 months." --- (CVS, earning call, 2024/Q2)

"On the pharmacy side, I call it, same things. For our clients, that specialty trend is a focus and we bring those products and solutions and that's why we've seen growth on the PBM side and our pharmacies around our clinical model and the continued innovative products that we're bringing to bear." --- (UNH, earning call, 2024/Q1)

"Overall, our pharmacy volumes are in line with plan and we continue to drive lower cost to fill, particularly in our less mature specialty pharmacy business." --- (HUM, earning call, 2024/Q2)

"(Photo: Business Wire) Under the new business, Walgreens Specialty Pharmacy has an unmatched offering and is the only specialty pharmacy in the market with the following services and assets at scale: Gene and Cell Services Pharmacy and Innovation Center – a dedicated 18,000-square-foot center in Pittsburgh, PA, with services and capabilities for these emerging therapies, including innovative solutions for managing the complexity of the supply chain, logistics and financing as well as clinical and social needs management to ensure success for patients and partners." --- (WBA, press release, 2024/04/24)

"This accomplishment truly highlights the combined strength of our CVS Caremark, CVS Specialty, and Cordavis businesses to accelerate biosimilar adoption and our commitment to customers to lower pharmacy costs." --- (CVS, earning call, 2024/Q1)

Growth of e-treatment in healthcare

The growth of e-treatment in healthcare is driven by increasing demand from an aging population and chronic conditions, alongside innovations like same-day prescription delivery. Companies are focusing on comprehensive care strategies to enhance patient experiences and access, indicating a robust expansion in e-treatment services.

"engagement in our original and partner content. Our health services business is growing robustly as customers are loving our pharmacy customer experience, and we've launched same-day delivery of prescription medications to customers in eight cities, including Los Angeles and New York City, with plans to expand to more than a dozen cities by the end of the year with customers now getting first fill medications 75% faster year-over-year nationwide." --- (AMZN, earning call, 2024/Q1)

"So you have a larger, more acute cohort, as a result of that. The second aspect of our acuity is our strategic initiatives to grow complexity around programs that we know produce, higher revenues per patient and really are part of our network strategy to be comprehensive in the services that we offer, hopefully creating a one stop shop for a patient if they need, you know, more complex and deeper care." --- (HCA, conference, 2024/06/05)

"And for us, it's population growth, aging baby boomers still drive demand. You have chronic conditions in communities and that all lifts demand for healthcare." --- (HCA, conference, 2024/05/30)

"of our overall revenue mix, and our payer mix, has grown, and improved because, again, it's strong job growth, more employer sponsored healthcare, The exchanges have grown, and that's yielded a better payer mix." --- (HCA, conference, 2024/06/05)

Regulatory impacts on specialty pharmacy and e-treatment

Regulatory changes are expected to negatively impact benefit levels for seniors, influencing choices in specialty pharmacy and e-treatment. Companies like Humana and Centene emphasize the importance of engaging with regulators to navigate these shifts, aiming for stability in the Medicare and Medicaid programs amidst rising costs and market disruptions.

"Specific to 2025, we expect benefit levels, planned stability and choice for seniors to be negatively impacted by the final MA rate notice, which is not sufficient to address their current medical cost trend environment and regulatory changes." --- (HUM, earning call, 2024/01/02)

"The dialogue we established with each state's regulatory and actuarial counterparts early on in the lead-up to redeterminations have in this phase allowed us to profile the shifts we are seeing as they emerge and resulted in rates for the second half of the year that are very much a step in the right direction." --- (CNC, earning call, 2024/Q2)

"PDP and med sup. So as members, potential members are evaluating their choices, they're going to have to take a look at what are the price increases and some of the disruption that's going to happen in the traditional fee-for-service market." --- (CVS, earning call, 2024/Q1)

"In fact, I would argue that it helps the MA sector, are getting tighter and better and understanding the impact on taxpayers, how the regulatory environment shapes that, what we can do to create a long-term value proposition for taxpayers that creates real stability for the Medicare and Medicaid program over time." --- (HUM, earning call, 2024/Q2)

"The program supports Arizonans who are elderly and/or have a physical disability (E/PD) with physical and behavioral healthcare, as well as provides pharmacy benefits." --- (CNC, sec filing, 2024/Q2)

Future growth projections for specialty pharmacy and e-treatment

Future growth in specialty pharmacy and e-treatment looks promising, with companies like Amgen reporting significant sales growth for TEPEZZA and highlighting low patient penetration as an opportunity. Additionally, Centene's commitment to rebuilding its Medicare franchise suggests a strategic focus on expanding services in this sector.

"We are really excited about this new program with Humana Healthy Horizons, which is a unique opportunity for CPESN pharmacies across Ohio leverage their local relationships and provide enhanced health services to Humana Medicaid enrollees, said Kevin Day, PharmD, CPESN Ohio Network Facilitator and owner of two pharmacies in Cincinnati." --- (HUM, press release, 2024/04/02)

"And so, we're always evaluating how the landscape changes, but we're very committed to rebuilding our Medicare franchise focused on the low-income complex members and using that to drive growth across both lines of business, obviously, see opportunity for earnings contribution and then longer-term growth in that business." --- (CNC, earning call, 2024/Q1)

"And if you compare that to 50% last quarter and just over 5% about a year ago, I think we've made pretty good progress in enabling patient access using our Phase IV data that have become available last year.So we continue to see a significant growth opportunity for TEPEZZA in the U.S. while also recognizing that as we make progress with a lot of our execution efforts, there continues to be a time lag between when we knock down barriers for access, expand our prescriber base and see patients get on therapy." --- (AMGN, earning call, 2024/Q2)

"Beginning with TEPEZZA for the treatment of thyroid-eye disease, second quarter sales were $479 million, reflecting growth of 8% year-over-year and 13% quarter-over-quarter, when compared to results from the legacy Horizon business. Recall that there are roughly 100,000 TED patients in the U.S., and penetration is currently only in the single digits." --- (AMGN, earning call, 2024/Q2)

"This is a busy and exciting time here at Amgen. And as you can see from our results, we're reaching many more patients around the world with our existing medicines, advancing a broad range of potential first-in-class medicines in our mid- and late-stage pipeline, and redefining what's possible in research as we integrate wet and dry lab capabilities and harness transformative technologies." --- (AMGN, earning call, 2024/Q1)

Challenges facing specialty pharmacy and e-treatment growth

Specialty pharmacy and e-treatment growth face significant challenges, including the impact of IRA changes on Medicare Part D, difficulties in integrating pharmacotherapy into chronic disease management, and headwinds from insufficient rate notices and prescription drug coverage changes that increase plan liabilities.

"But it also feels like seniors in traditional Medicare are going to be facing some meaningful headwinds as well when we think about the IRA impacts on Part D. And then also just in terms of, curious what you've been seeing on utilization in the whether that may be leading to higher rate increases in Medicare Supplement." --- (HUM, earning call, 2024/Q1)

"And it certainly doesn't facilitate putting pharmacotherapy and behavioral interventions at the center of chronic disease management in this country." --- (WBA, earning call, 2024/Q2)

"The remainder of our margin improvement in 2025 will be a function of pricing actions in an environment where we are facing headwinds from an insufficient rate notice and prescription drug coverage changes that substantially increase plan liability." --- (CVS, earning call, 2024/Q1)