Managers of pathology groups and clinical laboratories can learn from the challenges confronting the radiology profession
Members of the Intersociety Committee of the American Society of Radiology (ACR) recently met in Coronado, Calif., to discuss the “most pressing” challenges to their profession and investigate possible solutions, according to Radiology Business. Many of these challenges mimic similar challenges faced by anatomic pathology professionals.
The radiology leaders identified seven of the “most important challenges facing radiology today.” They include: declining reimbursement, corporatization and consolidation, inadequate labor force, imaging appropriateness, burnout, turf wars with nonphysicians, and workflow efficiency, according to a report on the meeting published in the Journal of the American College of Radiology (JACR).
“Solving these issues will not be easy,” said Bettina Siewert, MD, diagnostic radiologist at Beth Israel Deaconess Medical Center (BIDMC) in Boston, Mass., professor of radiology at Harvard, and lead author of the JACR report, in the JACR. “This is a collection of ‘wicked’ problems defined as having (1) no stoppable rule, (2) no enumerable set of solutions or well-described set of permissible operations, and (3) stakeholders with very different worldviews and frameworks for understanding the problem,” she added.
“The Intersociety Committee is a freestanding committee of the ACR established to promote collegiality and improve communication among national radiology organizations,” JACR noted.
“Taken together, a ‘perfect storm’ of pressures on radiologists and their institutions is brewing,” said Bettina Siewert, MD (above), diagnostic radiologist at Beth Israel Deaconess Medical Center in Boston, Mass., professor of radiology at Harvard, and lead author of the JACR report. Wise pathology and clinical laboratory leaders will see the similarities between their industry’s challenges and those facing radiology. (Photo copyright: Beth Israel Deaconess Medical Center.)
How Radiology Challenges Correlate to Pathology Practices
Here are the seven biggest challenges facing radiology practices today as identified by the Intersociety Committee of the ACR.
Declining Reimbursement: According to the ACR report, radiologists in 2021 performed 13% more relative value units (RVUs) per Medicare beneficiary compared to 2005. However, the inflation-adjusted conversion factor fell by almost 34%––this led to a 25% decline in reimbursements.
This issue has plagued the pathology industry as well. According to an article published in the American Journal of Clinical Pathology (AJCP), prior to adjusting for inflation, the average physician reimbursement increased by 9.7% from 2004 to 2024 for all included anatomic pathology CPT codes. After adjusting for inflation, the average physician reimbursement decreased by 34.2% for included CPT codes. The greatest decrease in reimbursement observed from 2004 to 2024 was for outside slide consultation at 60.5% ($330.12 to $130.49), followed by pathology consultation during surgery at 59.0% ($83.54 to $34.29). The average CAGR was -2.19%,” the authors wrote.
“Our study demonstrates that Medicare physician reimbursement for common anatomic pathology procedures is declining annually at an unsustainable rate,” the AJCP authors added.
The radiologists who identified this trend in their own field suggest that medical societies could lead the push to minimize the reimbursement cuts. Pathologists could also adopt this ‘strength in numbers’ mentality to advocate for one another.
Corporatization Consolidation: The authors of the ACR report identified this issue as limiting job opportunities for radiologists particularly in private practice. Pathology professionals have seen the same trend in their field as well. Increasingly, small pathology groups have been consolidated into larger regional groups. Some of those larger regional pathology groups will then be acquired by public laboratory corporations.
The authors of the ACR report suggest radiologists should be educated on the pros and cons of consolidation. They also suggest pursuing unionization.
Inadequate Labor Force: In both radiology and pathology there is a supply-and-demand issue when it comes to labor. Staffing shortages have been felt across all of healthcare, but particularly among pathology groups and clinical laboratories. Siewert and her co-authors suggest a three-pronged approach to address this issue:
Creating residency positions in private practice.
Recruiting international medical graduates.
Increasing job flexibility.
Pathology professionals could apply these same ideas to help close the gap between the open positions in the field and the number of professionals to fill them.
Imaging Appropriateness: A gap between service capacity and service demand for radiology imaging has created a frustrating mismatch between radiologists and clinicians. Radiology experts point to overutilization of the service causing the supply-and-demand crisis. Comparatively, pathologists see a similar issue in complex cases requiring more pathologist time to come to an appropriate diagnosis and identify a care plan.
“To facilitate this reduction, better data on imaging outcomes for specific clinical questions are urgently needed,” the authors of the ACR report wrote as a possible solution. “Considering the magnitude of the mismatch crisis, radiologists may also need to consider expanding their consultative role to include that of a gatekeeper, as is done in other more resource-controlled countries.”
Burnout: Perhaps one of the most talked about subjects in the medical field has been burnout. The issue has been thrust to the forefront with the COVID-19 pandemic; however, the burnout crisis began before the pandemic. About 78% of radiologists surveyed for this report claimed to be exceeding their personal work capacity.
The authors of the ACR report suggest a structured approach to air grievances without descending into despair. “Using a team approach based on the concept of listen-sort-empower, burnout can be combatted by fostering free discussion between frontline workers and radiologists,” they said. “Facilitators unaffiliated with the radiology department can help to maintain focus on gratitude for positive attributes of the work and the institution as well as to keep the sessions on task and prevent them from devolving into complaint sessions with a subsequent loss of hope.”
A similar approach could be applied to pathology groups and clinical laboratory to combat worker burnout as well.
Turf Wars with Nonphysicians: Over the last five years the number of imaging exams being interpreted by nonphysician providers has increased by 30%, according to the ACR report. The writers emphasized the need for increased understanding and awareness about the importance of physician-led care. They suggest solidarity among hospital medical staff to provide a united front in addressing this issue in hospital bylaws.
In pathology, the counterpart is how large physician groups are bringing anatomic pathology in-house. This has been an ongoing trend for the past 20 years. It means that the pathologist is now an employee of the physician group (or a partner/shareholder in some cases).
Increase Workflow Efficiency: Image interpretation accounts for only 36% of the work radiologists perform, the ACR report noted. This issue has a direct counterpart in pathology where compliance requirements and various tasks take time away from pathologist diagnosis. These issues could be solved by working AI into tasks, delegating non-interpretive tasks to other workers, and improving the design of reading rooms. All of these possible solutions could also be applied to clinical pathologists.
These issues being faced by radiologists compare directly to similar issues in the clinical pathology world. Pathologists and pathology group managers would be wise to learn from the experience of their imaging colleagues and possibly adopt some of the ACR’s suggested solutions.
New ‘simple’ pricing scheme will provide transparency and value to all stakeholders, says company’s Chief Pharmacy Officer
Woonsocket, R.I.-based CVS Health (NYSE:CVS) is planning to scrap what it says is an old-school prescription reimbursement model and turn to a new way to price prescription medications at its 9,000 CVS pharmacies nationwide. Why is this relevant for clinical laboratory and pathology managers? It shows the disruption that is ongoing in healthcare.
Like clinical laboratories, retail pharmacies have significant reimbursement, competition, and labor challenges to address. But unique to retail pharmacies is the emergence of pharmacy benefit management (PBM) companies that work between health insurance plans and drug makers.
“National pharmacy chains found themselves disintermediated from providing prescriptions to patients by pharmacy benefit management (PBM) companies. By 2021, PBMs had captured $484 billion of the total prescription drug spending of $576.9 billion. That meant PBMs controlled 84% of the prescription drug market! That caused retail pharmacies to look for new sources of revenue,” noted Dark Daily’s sister publication The Dark Report.
This arrangement may be motivating retail pharmacy companies to seek ways to recover the volume lost to PBMs.
CVS’ new CostVantage model will work with a formula based on how much CVS paid for the drug, a set markup over those costs, and a fee for pharmacy services to fill the prescription, according to a news release. Some experts and publications have compared the change to the approach used by the Mark Cuban Cost Plus Drug Company.
CVS Health expects to start CostVantage in 2024 before introducing it to PBMs for commercial payers in 2025.
CVS is “committed to lowering drug pricing,” CVS Health Chief Executive Officer Karen Lynch (above), CVS Health’s President and Chief Executive Officer, told CNBC. “What this (the new model) does is it essentially aligns the economics of our pricing for drugs to what consumers will pay at the pharmacy counter,” she added. Clinical laboratory managers and pathologists should understand that this new pricing strategy may be an attempt by CVS to win back prescription business lost to pharmacy benefit management companies. (Photo copyright: Rick Burn/Wikipedia.)
CVS Aims for Value and Transparency
CVS Health’s leaders believe it is time for a change in how the company’s pharmacies are reimbursed by PBMs and other payers.
Generic drugs dispensed in CVS pharmacies reached 90%. “That limits the capacity or the amount of value remaining through the higher levels of generic dispensing,” he said.
Also branded drugs have risen in price about 40% since 2019, leading to “higher costs for patients, our customers’ plans, and PBM plan sponsors.”
“This model has reached an inflection point that is just ripe for change,” Shah said. “We’re changing this outdated reimbursement model that made sense for the last decade, but no longer works today or in the future. We’re introducing a new simple model that provides value for all stakeholders across the supply chain in a much more simple, transparent, and comprehensive way,” he continued.
Cost-Plus Plans versus Retail Drug Prices
Fierce Healthcare compared CVS CostVantage to the Mark Cuban Cost Plus Drug Company, which claims it offers prescription drugs at prices below traditional pharmacies and openly shares with customers the “15% markup over its cost, plus pharmacy fees.”
Some examples on the company’s website include: Abiraterone acetate (generic for Zytiga), a prostate cancer treatment. It is priced at $33.50, compared to $1,093 retail. Cost Plus Drug Company says its costs are:
Manufacturing: $24.60
15% markup: $3.90
Pharmacy labor fee: $5.00
Another drug offered is canagliflozin (generic for Invokana), a type 2 diabetes medication, which sells for $245.92, compared to $676.14 retail. Cost Plus Drug Company says its costs are:
Fein predicts there will be more cost-plus models by retail pharmacies. “Other large pharmacies will likely follow CVS with attempts to force payers and PBMs to accept some form of cost-plus reimbursement,” he wrote.
Fein noted pharmacies prefer cost-plus models for reasons including the “stripping away of complexity and hidden cross-subsidies. … For a pharmacy, the same PBM would pay the same price for the same prescription regardless of the PBM’s arrangement with different plan sponsors.”
Turbulent Retail Pharmacy Market
CVS has also been dealing with limited growth, pharmacist labor relations issues, and a decline in COVID-19 testing, Healthcare Dive reported.
Meanwhile, pharmacies have been closing store sites and affiliated physician practices. CVS announced plans to close 900 stores between 2022 and 2024, according to a news release.
Rite Aid Corporation, Philadelphia, announced last year that it had filed for bankruptcy and may eventually close 400 to 500 of its 2,100 stores.
Walgreens Boots Alliance, Deerfield, Ill., intends to close 150 US and 300 United Kingdom locations, according to its former Chief Financial Officer James Kehoe’s remarks in a third quarter 2023 earnings call transcribed by Motley Fool.
The turbulence in the retail pharmacy market is another sign of ongoing disruption in healthcare. Long-established sectors are experiencing market shifts that are eroding their access to patients and ability to generate adequate profits.
Understanding how pharmacies approach these issues may help medical laboratory and pathology managers develop strategies for adding value to their relationships with healthcare providers and insurance plans.
Switching from non-profit to for-profit may affect how clinical laboratories operate in the new healthcare system
Shifting away from fee-for-service payment models and towards value-based healthcare is the goal of many non-profit hospital systems. One such transformation is underway at Summa Health, one of the largest integrated delivery networks (IDNs) in Ohio. On January 17, venture capital firm General Catalyst announced that its subsidiary—Health Assurance Transformation Corporation (HATCo)—had entered into an agreement to purchase Summa Health.
“HATCo’s investment into Summa Health will drive not only near-term benefit to the organization and the patients it serves but also sustainable, long-term transformation through a true shift to value-based care and access to new revenue streams, resources, innovations, and technologies,” states a General Catalyst news release penned by Marc Harrison, MD, CEO of HATCo.
Harrison was formerly President and CEO of Intermountain Healthcare, a 33 hospital not-for-profit IDN in Salt Lake City, Utah. This is a noteworthy fact because Intermountain Health has a national reputation as an innovative multi-hospital health system. Some observers believe that Harrison’s involvement signals that General Catalyst believes it has a care model that can deliver better patient care in a profitable manner.
“Under its new structure, Summa will become a for-profit organization, and General Catalyst says it will introduce new tech-enabled solutions that aim to make care more accessible and affordable,” CNBCreported.
“This is the first time that anybody has done anything quite like this,” Harrison told CNBC. “There are many digital health solutions that are out there as point solutions. This is the first holistic transformation of a health system to a thoughtful combination of digital and in-person care.”
“Our intent is to build on and augment the system’s considerable strengths. First and foremost, we share Summa Health’s commitment to serving all members of the community,” wrote HATCo CEO Marc Harrison, MD (above), in a news release. “The Summa Health team also shares our belief that achieving healthcare transformation will require a shift to value-based care … Together, we intend to demonstrate that a model that is better for patients can also be good for business, creating a blueprint for other health systems to effectively serve all people in their communities.” How this shift will affect Summa’s clinical laboratories remains to be seen. (Photo copyright: General Catalyst.)
Betting on Healthcare
In 2023, General Catalyst, an American venture capital firm headquartered in Cambridge, Mass., unveiled its Health Assurance Transformation Corporation (HATCo) and began shopping for a health system to buy.
HATCo has 20 healthcare systems in a network that spans 43 states and four countries, according to Healthcare Dive. The company’s news release states it has been focused on three areas since its start-up:
Helping its partners on their “transformation journeys.”
Planning to “acquire and operate a health system for the long-term.”
“The goal of the purchase is for the health system to act as a proving ground for General Catalyst to test ways to improve hospital operations and patient care, without risk aversion or cash shortfalls, management said,” Healthcare Dive reported.
Thus, the firm’s announcement to purchase a health system last October “sent shockwaves through the healthcare industry” according to Healthcare Dive.
“At its core, General Catalyst’s long-term Health Assurance thesis is that value-based care not only is good for patients, but also can be a successful business model if deployed with innovative technology at meaningful scale. Its rationale for buying a health system is a belief that it can improve on the traditional model of not-for-profit health system governance and management by embedding new incentives,” wrote Christopher Kerns, CEO and co-founder of Washington, D.C-based research firm Union Healthcare Insight, in a blog post analysis.
General Catalyst’s HATCo may offer up “a profit motive, a longer time horizon, and a channel for dozens of innovative companies to demonstrate value,” he noted.
“The single biggest barrier to promising young healthcare companies is an inability to scale. Many of their innovations—in digital health, patient engagement, revenue cycle workflow, etc.—require willing health system partners who are famously conservative in their investments and service providers, and rarely take risks on newbies. The addition of Summa provides an open laboratory for those innovations,” Kerns added.
Is the Summa Health Deal Good for Healthcare?
Some in the industry were taken aback by General Catalyst’s announcement.
“A lot of people feel like a PE (private equity) or venture capital company owning a hospital is kind of like asking Freddy Krueger to come babysit your kids. It just makes people a little nervous, and it doesn’t feel quite aligned with this concept of healthcare being a human right,” John Bass, CEO of Hashed Health, a Nashville, Tenn.-based healthcare venture studio, told CNBC.
Nevertheless, it’s a moot point. HATCo is moving forward with its purchase of Summa Health.
“For this bet to work, Summa will have to be a solid proving ground for [General Catalyst’s] portfolio companies. And that means either Summa itself will have to grow, or it will have to act as a force multiplier for its other value-based portfolio companies to justify the considerable capital expended. I have to say, that’s a tall order, but not an insane one,” said Kerns in the Union Healthcare Insight blog post.
Healthcare managers may find it interesting to follow HATCo and Summa Health on their planned journey. The results may speak for themselves. Either way, clinical laboratories and anatomic pathology group practices in HATCo’s health system may be in for some interesting changes.
Plans by several national retail pharmacy chains to expand primary care services and even some clinical laboratory test offerings may be delayed because of financial woes
Times are tough for the nation’s retail pharmacy chains. Rite Aid Corporation, headquartered in Philadelphia, closed 25 stores this year and has now filed for bankruptcy. In a press release, the retail pharmacy company announced it has “initiated a voluntary-court supervised process under Chapter 11 of the US Bankruptcy Code,” and that it plans to “significantly reduce the company’s debt” and “resolve litigation claims in an equitable manner.”
Rite Aid may eventually close 400 to 500 of its 2,100 stores, Forbes reported.
Meanwhile, other retail pharmacy chains are struggling as well. CVS Health, headquartered in Woonsocket, Rhode Island, and Walgreens Boots Alliance of Deerfield, Illinois, are each closing hundreds of stores, according to the Daily Mail.
They are each experiencing problems with labor costs, theft, being disintermediated for prescriptions by pharmacy benefit managers (PBMs), and probably building too many stores in most markets.
This is a significant development, in the sense that Walgreens, CVS, and Walmart are each working to open and operate primary care clinics in their stores. This is a way to offset the loss of filling prescriptions, which has migrated to PBMs. Primary care clinics are important to the revenue of local clinical laboratories, but retail pharmacy chains do not yet operate enough primary care clinics in their retail pharmacies to be a major influence on the lab testing marketplace.
“With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives, and accelerating the execution of our turnaround strategy,” said Jeffrey Stein (above), Rite Aid’s CEO/Chief Restructuring Officer, in a press release. Clinical laboratory leaders may want to closely monitor the activities of the retail pharmacies in their areas. (Photo copyright: Rite Aid.)
Multiple Pharmacy Companies at Financial Risk
Rite Aid Corporation (NYSE: RAD) confirmed it continues to operate its retail and online platforms and has received from lenders $3.45 billion in financing to support the company through the bankruptcy process.
However, according to the Associated Press (AP), Rite Aid has experienced “annual losses for several years” and “faces financial risk from lawsuits over opioid prescriptions,” adding that the company reported total debts of $8.6 billion.
Additionally, the US Department of Justice (DOJ) filed a complaint “alleging that Rite Aid knowingly filled unlawful prescriptions for controlled substances,” explained a DOJ press release.
Rite Aid is not the only retail pharmacy brand dealing with unwelcome developments. Fortune reported last year that Walgreens and CVS paid a combined $10 billion to 12 states for “involvement in the opioid epidemic.”
Walgreens intends to close 150 US and 300 United Kingdom locations, its former Chief Financial Officer James Kehoe shared in a third quarter 2023 earnings call transcribed by Motley Fool.
And in a news release, CVS announced plans to close 900 stores between 2022 and 2024.
Pharmacy Companies’ Investment in Primary Care
Though they are experiencing difficulties on the retail side, Walgreens and CVS have significantly invested in primary care.
In that same ebrief, we reported on CVS’ acquisition of Oak Street Health, a Chicago-based primary care company, for $10.6 billion. CVS plans to have more than 300 healthcare centers by 2026.
“We looked at our business, and we said, ‘We’re seeing an aging population.’ We know people don’t have access to primary care. We know that value-based care is where it’s going. We know that there’s been a renaissance in home (care). So that’s kind of how we approached our acquisitions,” Karen Lynch, CVS Chief Executive Officer told Fortune.
Other Challenges to Retail Pharmacies
It could be that these major pharmacy chains are hoping entry into primary care will offset the loss of sales from prescriptions that have migrated to PBM organizations.
In addition to reimbursement challenges, retail pharmacies are reportedly experiencing:
High labor costs,
Competition from online, bricks-and-mortar, and grocery businesses, and
Effects from the work-at-home trend, among other struggles.
“I think there’s a number of challenges which are coming to a head. One, you have ongoing reimbursement pressure. The reimbursement level for drugs continues to decrease, so profit margin on the core part of the business is under pressure,” Rodey Wing, a partner in the health and retail practices of global strategy and management consulting firm Kearney, told Drug Store News.
Additionally, the pharmacy’s drug sales need to be high enough to retain pharmacists, who are difficult to recruit in a post-pandemic market, Drug Store News explained.
And in the retail space where products are displayed, some pharmacies struggle to compete with Amazon on convenience and with “dollar” stores on price. And with more people working from home, retail pharmacies are seeing less foot traffic, Drug Store News noted.
Retail pharmacy companies also have competition from pharmacies conveniently situated in grocery and big-box stores, Forbes reported. These include:
Walmart, for its part, reduced operating hours of pharmacies at more than 4,500 sites, Daily Mail reported.
Thus, medical laboratory leaders would be wise to keep an eye on market changes in their local retail pharmacies. Some locations are equipped with clinical laboratory services and a closure could give local labs an opportunity to reach out to patients and physicians who need access to a new testing provider.
The newly approved legislation will “eliminate regulations preventing patients from learning about diagnostic testing and services provided by local clinical laboratories,” according to a press release issued by the Pennsylvania Senate Republicans.
Republican state Senator Rosemary Brown was the bill’s primary sponsor. She was joined as co-sponsors by a bipartisan group of colleagues.
“The regulations prevent patients from learning about clinical laboratories and the services they provide,” Brown said in the press release. “Patients deserve to know about their options when they are selecting a clinical laboratory to perform these important tests and procedures.”
The press release noted that Pennsylvania is the only state that prohibits clinical laboratories from advertising to residents.
“It’s time for Pennsylvania to catch up with the rest of the nation and enable patients to have access to this information,” said co-sponsor of the bill Republican Senator Tracy Pennycuick (above) in a press release. “Our bill would enable advertising while maintaining the important consumer protection provisions that ensure tests and procedures can only be performed based on a doctor’s order.” Once enacted into law, clinical laboratories in Pennsylvania will be able to advertise their services just like labs in other US states. (Photo copyright: Montgomery County Republican Committee.)
Details of Senate Bill 712
The bill applies to clinical laboratory tests ordered by licensed healthcare practitioners and performed by the medical laboratories themselves. Labs are prohibited from making claims “about the reliability and validity of the testing that is inconsistent with the testing proficiency standards” in federal law, the bill states, and labs must disclose that the test “may or may not be covered by health insurance.”
Brown, Pennycuick, and co-sponsor Republican Senator Lynda Schlegel Culver, discussed the need for the new legislation in a March 2023 memo, observing that 70% of healthcare decisions are influenced by clinical laboratory tests.
“As our state and the nation’s healthcare system continues to grow and evolve, consumers are demanding greater transparency and to be more engaged in how healthcare is delivered to them,” they wrote, adding that the state’s current restrictions are “outdated.”
“We believe permitting outreach to Pennsylvania consumers with accurate, scientifically based diagnostic information can be a source of personalized, highly relevant insight to help foster better, more informed dialogue with licensed healthcare providers, which enables Pennsylvania consumers to take action to improve their health,” they wrote.
“Patients should have access to information about the services and procedures available at their local clinical laboratories,” said Senator Culver in the press release. “I want to make sure patients can make informed decisions about where and how to obtain these important health services. Our bill would remove the gag order on this specific set of healthcare services.”
Similar legislation, HB1558, sponsored by Republican Representative Paul Schemel, is currently pending in Pennsylvania’s House of Representatives.
Larger Push for Healthcare Consumerism
Dark Daily and our sister publication The Dark Report have reported extensively about the rise of consumerism in healthcare—including factors such as price transparency—as it applies to medical laboratories.
And in “Millennials Set to Reorder Healthcare and Lab Testing,” The Dark Report advised clinical laboratories on the need to reconfigure key aspects of their services to accommodate the rising numbers of Millennials in the workforce. For example, these consumers are accustomed to using mobile devices to interact with retailers and want the same convenience when obtaining healthcare services from doctors and labs.
Global management consulting firm McKinsey and Company addressed many of these issues in report titled, “Driving Growth through Consumer Centricity in Healthcare.” The authors suggested that healthcare providers need to “redefine the consumer experience” by emulating “consumer-focused companies in other sectors” with “personalized offerings and services, value-based pricing, and an elevated experience—all from distinctive, high-quality brands.”
The report also noted that providers still have a lot of work to do. “Many consumers believe that the health system does not support their care needs, and they perceive that the quality of their healthcare is negatively affected by their personal attributes, including income, insurance coverage, weight, and age, among other factors,” the authors wrote.
Huron, a healthcare consulting company, identified five current trends in healthcare consumerism based on a survey of US consumers, Healthcare Dive reported. They are:
Greater digital functionality, including telehealth, wearable devices to report health data, and mobile apps for scheduling, communication, and payment.
Affordability, shorter wait times, and online ratings as factors driving consumers to choose providers.
Accurate diagnoses and effective treatment plans as drivers of consumer satisfaction.
Increasing demand for technology-enabled conveniences such as virtual care.
More price transparency in response to concerns about affordability.
Pennsylvania’s decision to join the rest of the nation and allow clinical laboratories to advertise their services may be evidence that the growing number of consumers who want direct access to medical care and the ability to choose their provider—be it hospital, physician, or clinical laboratory—are encouraging the pathology and medical laboratory professions to lobby their state lawmakers to make it easier to advertise their services to the public.
This trend, which began during the COVID-19 pandemic, may bypass those clinical laboratories and pathology groups that recruit patients for clinical trials, but increase the diversity of the pool of study participants
National retail pharmacy chains are seeking new lines of business in the healthcare market and their efforts could cost clinical laboratories and pathology groups revenue. Their strategy is to identify patients who are candidates for specific clinical trials and connect them with clinical trial managers for enrollment, according to CNET.
Traditionally, there are clinical laboratories and anatomic pathology groups that actively work to connect their patients with appropriate clinical trials (and earn revenue for both the enrollment and doing necessary testing of the patient in support of the trial). Now, following the FDA’s lead, pharmacy companies seem to be working to capture some of that revenue.
“COVID-19 was definitely the impetus for reevaluating how we did clinical trials,” Ramita Tandon, Chief Clinical Trials Officer at Walgreens, told CNET. The interest of retail pharmacies in the business of identifying their patients as candidates for clinical trials is a development that clinical lab managers and pathologists may want to monitor. (Photo copyright: Walgreens.)
Customer Demand for Convenience a Factor
Clinical trials are imperative to the drug approval process required by the FDA’s Center for Drug Evaluation and Research (CDER). The COVID-19 pandemic fueled the FDA’s move to decentralize clinical trials to help pharmaceutical companies recruit subjects for drug testing.
Retail pharmacy chains apparently saw that as the latest opportunity to position retail pharmacies as intermediaries between drug manufacturers and patients.
In response to growing demand for convenient healthcare locations, Walgreens, CVS, Rite Aid, and Walmart have all installed primary care clinics into their retail pharmacies and added vaccinations. Further, after COVID-19 caused retail pharmacy chains to sell over-the-counter SARS-CoV-2 home test kits, pharmacies sought to offer more diagnostic test options to their customers, which would further direct such tests away from clinical laboratories.
Over the last two years, Walgreens, Walmart, CVS, and Kroger have also added clinical trials divisions to their corporate holdings. Among the companies’ stated goals is to make clinical trials more accessible and convenient for their customers, as well as to recruit more trial participants from underrepresented populations.
According to an article published in the Journal of Medical Internet Research (JMIR), “around 80% of trials fail to meet the initial enrollment target and timeline, and these delays can result in lost revenue of as much as US $8 million per day for drug developing companies.” This shortfall may delay the creation of useful drugs, medical devices, and other essential treatments.
“If you see the trial is at an academic institution that’s 30, 40 miles away, you’re going to say, ‘Forget it. It’s too far,’” Ramita Tandon, Chief Clinical Trials Officer at Walgreens, told CNET. “But if you can go to a Walgreens that’s maybe five miles away, you’re more likely to participate and complete the trial.”
Creating a More Diverse Group of Clinical Trial Participants
CNET reported that “Pfizer, Gilead, and other biopharmaceutical companies are eager to diversify their patient pool.”
According to the FDA’s 2022 Drug Trials Snapshot, “Whites comprised the majority of patients enrolled in most of the pivotal trials supporting approval of all 37 novel therapies, followed by Asians and Blacks.”
Walgreens, which operates 8,698 pharmacies in 53 states and territories, has installed special clinical trial centers at 15 pharmacies and has approximately one dozen clinical trials in various stages. Tandon said more than two million Walgreens customers have already been contacted about participating in clinical trials.
In January, grocery giant Kroger announced its first clinical trial partnership with Persephone Biosciences to locate subjects for a study on gut health and its influence on colorectal cancer. Data collected from this trial will help develop personalized medicines and discover cancer-specific indicators that may be beneficial in guiding treatments and preventative measures.
Kroger Health operates nearly 2,200 pharmacies across the US, including 11 specialty pharmacies and 225 clinics.
In October of last year, Walmart announced the creation of the Walmart Healthcare Research Institute (WHRI), which will focus on innovative interventions and medications to help communities that are unrepresented in clinical trials, such as older adults, rural residents, women and minority populations.
Walmart operates over 3,000 pharmacies in 49 states. Ninety percent of Americans live within ten miles of a Walmart, which translates to the retailer being able to reach a large number of candidates for clinical trials.
Study findings published by marketing research company Precedence Research illustrate how the business of clinical trials generated more than $48 billion last year and is projected to reach over $83 billion by 2032. (Graphic copyright: Precedence Research.)
CVS Discontinues Decentralized Clinical Trial Business
CVS Health was the first pharmacy to launch a clinical trials program back in May 2021. However, in May of this year, the company announced it was shuttering that portion of its business.
CVS Health expects to fully phase out its clinical trials unit by the end of 2024, citing “the need to align existing businesses with its larger corporate strategy,” according to BioSpace.
“Fully decentralized models preclude a huge swath of possible research because of safety and regulatory concerns,” Steve Wimmer, Vice President of Partnerships at decentralized clinical trial recruiter 1nHealth, told BioSpace. “It’s difficult to conduct such trials in a standardized manner. I think [CVS] may have imagined that a clinical study visit wouldn’t be that different from the primary care visits they already do. But for interventional, go-to-study trials, it’s not the same as a primary care visit.”
According to the US National Library of Medicine, more than 38,000 registered clinical studies occurred in 2022. As of August 24 of this year, 26,237 clinical studies have been registered on clinicaltrials.gov.
There are clinical laboratories and anatomic pathology groups that actively work to connect their patients with those clinical trials. Though pharmacy companies’ clinical trial recruitment programs may reduce revenue for those labs and pathologists, the increased participation in such trials by greater numbers and more diverse populations of people could advance the development of new lifesaving treatments and therapies, which is good for everyone.
