Trends in Integration Between Physician Organizations and Pharmacies for Self-Administered Drugs

Integration is the practice of combining healthcare services with the goal of improving patient care. Vertical integration between physicians and pharmacy services allows physician organizations to dispense self-administered medicines directly or through a licensed pharmacy. While integration between physician organizations and pharmacies for self-administered drugs or in-house pharmacies, few studies address their implications on healthcare quality and spending.  

In a new study in JAMA Network Open, Dr. Pragya Kakani, assistant professor of population health sciences, and colleagues identified and described trends in the use of in-house pharmacies, associated physician organization characteristics, and associated drug prices. 

Researchers evaluated the share of Medicare Part D spending filled by in-house pharmacies by drug class, costliness, and specialty. They also measured growth in physician organizations with in-house pharmacies for five specialties: medical oncology, urology, infectious disease, gastroenterology, and rheumatology. Finally, researchers identified characteristics of physician organizations with in-house pharmacies and compared drug prices at in-house and other pharmacies.  

The study determined that the share of Medicare Part D spending filled at physician organization–operated pharmacies for high-cost, self-administered drugs significantly increased between 2011 and 2019 for oral anticancer treatments, antivirals, and immunosuppressants. By 2019, 63% of medical oncologists, 20% of urologists, 29% of infectious disease specialists, 21% of gastroenterologists, and 22% of rheumatologists were employed by organizations operating specialty relevant pharmacies. Researchers suggest that integration may improve patients’ access to medications and care quality but may also create incentives for overuse. As such, the need for evaluation of integration is urgent and can inform policies, including state regulations governing in-house pharmacies, pharmacy network adequacy rules, and more.  

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