Asembia’s 20th Annual Specialty Pharmacy Summit once again brought investors and operators in the specialty pharmacy ecosystem to Las Vegas for learning sessions and networking. Bass, Berry & Sims brought a team of four attorneys from our Specialty Pharmacy & Pharmaceuticals and 340B Program Services practice groups to join the fun. Below we’ve outlined some of the key messages we heard at this year’s conference.
Infusion Continues to Dominate Conversations on Market Activity
Discussions on market activity in the specialty pharmacy industry keep coming back to the infusion space. There is keen interest in developing new business lines, startups, investment, and M&A in the sector; however, there is no front runner among the various infusion modalities, such as home infusion, ambulatory infusion centers (AICs), pharmacy infusion suites, physician practice infusion, and infusion management. With material differences in procurement, reimbursement, and operations across each modality and even companies within the same space, some are finding the lack of consistency a roadblock to growth to tuck-ins or finding executives with experience and vision. Despite the eclectic nature of infusion provider offerings, interest remains high.
IRA Implementation Continues to Raise Questions about Impact on the Specialty Pharmacy Market
As Medicare continues to implement the Inflation Reduction Act (IRA) and prepare for the new Medicare drug negotiation program to go into effect in 2026, not all stakeholders in the specialty pharmacy market are aware yet of the expected consequences for pharmacy operators, but it is clear big changes are coming. The focus right now is on the first ten drugs chosen for negotiation in 2026, with major changes to Part D reimbursement and procurement on the line, but investors and operators are also beginning to consider the impact in the infusion market, with Part B reimbursement and procurement changes teed up for 2028. Questions also came up about the role of inflation rebate caps and the impact of the new Medicare inflation rebates on drug prices.
Outside of True “Specialty,” Cash is King
Capitalizing on consumer-driven healthcare, manufacturers are focusing on cash-pay programs and pharma service vendors are well poised to provide robust support for these programs. With the success of programs such as Lilly Direct, we anticipate further attempts by manufacturers to establish closer relationships with patients and eliminate costly channel participants like wholesalers and commercial pharmacies where practical. As questions continue to be raised about the future of the PBM market, so too are there questions about the role of payer coverage for certain specialty products, especially those with a consumer focused appeal like the GLP-1s. Discussions centered on whether market dynamics could pull low-cost drugs, including brands, out of payer coverage and into a cash-pay model. This trend is in line with growth of white-glove specialty-like offerings into the “tweener” or “specialty light” space. Hubs and other market intermediaries that service manufacturers with these products continue to grow.
340B Continues to Come Up, Particularly in Distribution and Infusion Conversations
Just like every year at Asembia, questions about the 340B drug pricing program inevitably come up during conversations focused on broader market trends. The distribution of 340B drugs to contract pharmacies continues to raise questions, in light of drug manufacturer contract pharmacy restrictions. New and “innovative” models are popping up, raising questions about the 340B eligible patient definition and using 340B drugs in ambulatory infusion models.
Conclusion
There was an overall sense of optimism among attendees this year fueled in part by M&A activity picking up in the sector and new reimbursement, technology, and service offerings that help drive efficiencies. However, margin compression and the pressures of market consolidation continue to loom large in the strategic planning discussions. Our team is excited about the innovation and growth in the industry that we expect to see in the next year and will continue to monitor industry trends.
