Why You Might Want to “Fear the Steer”

Updated: Apr 12

Who Would Steer You to Fill Prescriptions at Their Own Specialty Pharmacies?


They Decide Your Destination


We have shared multiple examples of the cost to a “captive healthcare audience”, especially in hospitals and there is a variation occurring that can impact your co-pays and overall medication spending. This growing trend happens when hospitals and health systems are directing, and in some cases requiring, their patients to utilize their own specialty pharmacies.  It’s done in a variety of ways, usually by vertically integrated systems.  These organizations usually consist of the hospital or health system, their system-employed physicians, and the specialty pharmacies that they own.  To illustrate this, a recent report cited that “more than 90% of specialty prescriptions are written by system-employed physicians.” Adam J. Fein, Ph.D., the CEO of Drug Channels Institute, profiled the findings of the inaugural report, which is entitled ASHP National Survey of Health-System Specialty Pharmacy Practice.(1,2Some other more interesting details include:


  1. Nearly two-thirds of the larger health system specialty pharmacies operate as the exclusive pharmacy within self-insured health systems’ networks. 

  2. 31% of health system specialty pharmacies fill a majority of the specialty prescriptions written by a health system’s prescribers.

  3. More than 80% of health systems have formal metrics for tracking the prescription capture rate, which measures the number of prescriptions sent to the health system’s specialty pharmacy and/or the number of specialty prescriptions written. 

  4. Employees of these systems are often required to fill their own prescriptions at these specialty pharmacies, due to their plan’s mandates.  At the very least, they are usually steered there with lower copays or coinsurance when filling prescriptions at the in-house specialty pharmacy.


When receiving a prescription from a doctor employed by a health system and the prescription is to be filled at their in-house specialty pharmacy, it is prudent to remember that “The 340B Drug Pricing Program enables health system pharmacies to generate profits that far exceed a typical specialty pharmacy. Ninety-five percent of the health system specialty pharmacies in the ASHP survey are owned by 340B covered entities.”(2) For more on the good, bad, and unintended consequences of the 340B Drug Pricing Program, see our previous blog, “What’s the 411 About 340B?

The key takeaway is to remember recognizable incentives and consider the cost of convenience. Picking your prescription up on your way out of the healthcare facility might be easier than an additional trip to your own pharmacy, but it might cost considerably more.  Shop around when in doubt and don’t always assume that just because the providers are health care professionals, they have your best interests (especially financial ones) foremost in mind.  In fact, they are often unknowingly participants in this costly and burdensome system too.


References

  1. https://www.drugchannels.net/2021/10/fresh-evidence-how-health-systems-steer.html

  2. https://academic.oup.com/ajhp/article-abstract/78/19/1765/6337959