‘Devouring’ the market? Walmart to quintuple its autoimmune specialty pharmacy locations
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The largest retailer in the nation has sampled a taste of the autoimmune specialty pharmacy market, and has decided it wants more.
Walmart this past summer announced that it will open 25 new autoimmune-focused “specialty pharmacies of the community” across five states, bringing its total of autoimmune specialty pharmacies to 31 across nine states.
This fivefold expansion from Walmart could have massive implications for rheumatology, according to experts.
“Specialty pharmacies play a critical role in the management of rheumatologic conditions by providing expertise, support and resources that are essential for the effective use of complex medications,” Shane Caslavka, PharmD, MBA, manager of Drug Procurement and Oral Dispensing at Articularis Healthcare Group, told Healio.
“However, the benefits they offer must be weighed against potential drawbacks, such as challenges with accessibility and insurance,” he added. “For rheumatology patients and providers, the key to maximizing the advantages of specialty pharmacies lies in ensuring a seamless integration and communication within the broader health care team.”
For John R.P. Tesser, MD, FACP, of Arizona Arthritis & Rheumatology Associates and Midwestern University, the full story is not just that Walmart is greatly expanding its footprint in the specialty pharmacy market — it’s what they are, in turn, moving away from.
“They are pivoting away from the so-called Walmart health centers they had established over five states,” he said. “They are pivoting away from their telehealth operation and they are leaning into their delivery operation.”
Meanwhile, it remains uncertain how the entry of a large, multinational operation will impact the specialty medication distribution system overall.
“Of course, the underlying reason Walmart entered the specialty pharmacy market is that they saw an opportunity to increase their revenue,” Tesser said.
However, the implications of the move could stretch far beyond Walmart’s bottom line. Success could mean greater convenience and access for patients, but failure could muddy an already difficult pharmaceutical landscape.
“We need to note, if not well-integrated within the patient's overall care team, specialty pharmacies can contribute to fragmented care,” Caslavka said. “Coordination between the pharmacy and other providers is essential to ensure that treatment plans are consistent and comprehensive.”
Assessing the growth and difficulties of the specialty pharmacy market in the United States, along with the increased use of delivery services for medications, could shed light on how the shifting landscape could impact rheumatologists and their patients.
‘Devouring’ the competition
The increase in specialty pharmacies overall speaks to changes in medications and how those medicines are administered. Rheumatologists know as well as anyone how to manage medications that must be delivered, handled and administered in myriad ways.
However, it remains uncertain whether Walmart’s operation will meet those demands.
“From our point of view, specialty pharmacies are well positioned to improve patient access to medications,” Caslavka said. “If properly staffed and integrated with the rheumatology team, a specialty pharmacy should be able to improve patient access to financial assistance. Furthermore, quality specialty pharmacies can assist with navigating insurance coverage and patient assistance programs.”
According to Tesser, the size and scope of Walmart’s influence is a potential positive.
“People use Walmart for all different needs,” he said. “So, in that sense, it could be a positive if individuals can integrate their specialty pharma needs with a company they are used to doing business with.”
This may speak to a larger point about patients as consumers, Caslavka said.
“One opportunity for improvement in the specialty pharmacy system is allowing patients to access the specialty pharmacy of their choosing,” he said. “Currently, many payers dictate which pharmacy patients must use, often limiting patient choice. This becomes especially concerning when there are quality issues with the designated pharmacy.”
According to Caslavka, patients may have a preference for a particular pharmacy due to better service or reliability, but insurance restrictions can prevent them from using their preferred option.
“These limitations can also negatively impact pricing, availability of co-pay assistance programs, and overall patient access to specialty medications,” he added. “It is important to highlight the significant role payers play in limiting a patient’s freedom to choose their preferred specialty pharmacies.”
Meanwhile, patients are not the only stakeholders who could be handcuffed in this way, according to Tesser.
“Clinicians also have specialty pharmacies they like to use,” he said. “Walmart is obviously huge. They could end up devouring a lot of competition.”
Given the size of Walmart’s already-established footprint in the United States, this remains a strong possibility, Tesser added. However, the success or failure of the endeavor will also depend on the company’s ability to handle medications appropriately in both the pharmacy and delivery operations.
‘Regular, timely’ delivery
“The increasing use of home delivery for medications is a notable trend in the health care landscape, particularly for patients with chronic conditions who live in rural areas,” Caslavka said. “Regular, timely delivery can help ensure that patients consistently receive their medications without gaps, which is crucial for managing a chronic condition.”
The question, then, is whether Walmart will provide that “regular, timely” delivery, according to Tesser.
“Again, if they can do a good job in terms of safety and bureaucracy, then it may be very helpful for patients,” he said.
It may behoove Walmart to make efforts to avoid some of the pitfalls of other specialty pharmacies, Tesser added.
“Some operations are not great with prior authorization denials, either on purpose or because of ineptitude,” he said.
Like many experts, Tesser stated he will be watching Walmart to see how they handle their delivery business.
“There are so many steps, from pretreatment to prior authorizations, to offering affordable options,” he said. “Then there is the monitoring piece. Are they making sure their patients adhere to their medications, and what steps are in place if they are not?”
Education is another key aspect of a specialty pharmacy delivery operation that Walmart must consider.
“Do their personnel give quality information and explain medications to patients?” Tesser said. “Can they teach patients how to use specialty devices, or explain changes to biosimilars?
Tesser added that he expects that Walmart has done its due diligence and will have standard operating procedures to deal with these issues.
“But we will have to see how it plays out,” he said.
Another glaring concern about medication delivery is that it can weaken the doctor-patient relationship, according to Caslavka.
“Home delivery reduces direct patient interactions with pharmacists,” he said. “Although virtual counseling is available, face-to-face interactions offer significant advantages, especially for managing the complex conditions treated by rheumatologists. In-person consultations allow for better communication, personalized education and real-time clarification of treatment plans.”
The final piece of the puzzle, regarding delivery services, pertains to the nature of new, highly specialized medications.
“At the moment, highly specialized treatments like gene and cell replacement therapies are still delivered in academic centers,” Tesser said. “Walmart will not be delivering those anytime soon.”
However, rheumatologists across the country should, in the meantime, prepare for the entry of Walmart into their daily practice.
Supply chain ‘opportunity’
“As rheumatologists navigate the evolving landscape of medication access, it is essential to stay informed about recent shifts that can significantly impact your practice and patient care,” Caslavka said. “There is an opportunity for rheumatologists to become more integrated in the chain of specialty medication delivery to patients.”
That said, whether rheumatologists ultimately will desire to become more intimately involved in the supply chain remains to be seen.
Although Tesser acknowledged that rheumatologists are used to fluctuations in health care and medication delivery, due to the complexity of their patient population, he does not expect them to be jumping at the chance to use the Walmart’s operation right away. “Rheumatologists, in general, are very cautious, given the safety concerns and other factors in their patients,” he said. “When you ask rheumatologists if they are going to use a newly approved medication, they often say they will wait 6 months or a year to see how it plays out. I expect the same to be true with these Walmart specialty pharmacies.”
However, Tesser made clear that such a reaction would be despite the current state of specialty pharmacy paradigms, and not because the status quo is preferable or needs defending.
“I think many will prefer to stick with the ‘devil you know’ until further notice,” he said.
References:
“Walmart To Expand Specialty Pharmacy Business,” Forbes; published July 25, 2024: https://www.forbes.com/sites/brucejapsen/2024/07/25/walmart-to-expand-specialty-pharmacy-business/
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