Point of care pharmacy

Health plan building out own primary care need to decide whether to add pharmacy dispensing to its clinics

A leading regional health plan was building its own network of primary care clinics and considering onsite dispensing as a way to enhance the member experience. They were, however, unsure of the economic and operational viability of owning their own pharmacy.

Economic teardown based on market benchmarks

We analyzed the plan’s experience with clinic-based pharmacies to determine how interested their members would be. Based on those adoption parameters, the planned network build-out, and the anticipated formulary, we could size purchasing scale especially in generics and implied procurement discounts. We also benchmarked alternative operational models ranging from repackaging vendors, full pharmacy build, and hybrid models incorporating central fill, clinic dispesning and delivery. We sized in particular the drug cost savings and dispensing operational efficiencies that can be gained by vertical alignment between the plan’s formulary and physician prescribing. We identified an attractive pathway to provide pharmacy dispensing, built a detailed business case to support the recommendation, and sized second order impacts on compliance and long-term health costs. Our project also highlighted the large savings potential for tightly managing the prescribing patterns of the physicians in the clinic and aligning these with the plan’s own formulary priorities.

Incremental value outweighed by the operational complexity

While the business case for pharmacy was attractive, adding dispensing would add significant complexity to the launch of the new clinics. Our analysis highlighted, however, the large drug cost savings available by aligning the clinic formulary and physician prescribing with the plan’s pharmacy strategy. The idea of building out an integrated pharmacy capability was shelved until the major hurdles of the clinic roll-out were crossed; however, the recommendation to create of an internal formulary for the practice aligned with plan formulary was adopted from Day 1.