Specialty pharmacies: What are they, and how do they affect drug costs?

These days, it seems like everyone is talking about specialty drugs. But what about the pharmacies that distribute them?

Specialty pharmacy started as a niche industry in the 1970s. But as more specialty drugs were invented, it grew hugely profitable. Specialty drugs now make up about 2% of prescription volume but account for approximately between 40% to over 50% of pharmacy dispensing revenue, according to a July 2024 interim staff report from the Federal Trade Commission (FTC). That same report found specialty dispensing revenue reached $237 billion in 2023.

Experts say specialty pharmacies can help patients who need more assistance than the average retail pharmacist can provide. But as profits have grown, so has scrutiny.

“I think it probably varies from drug to drug, but in general, within the US healthcare system, we have a major value problem where we spend a lot of money and don’t necessarily get the outcomes that we would expect for the amount of money that we spend,” Allison Oakes, chief research officer at healthcare data analytics firm Trilliant Health, told Healthcare Brew.

What makes a pharmacy special?

The National Association of Specialty Pharmacy (NASP), a trade group, defines specialty pharmacies as state-licensed and regulated businesses that focus on delivering specialty drugs and are either accredited or in the process of getting accredited by a third-party organization.

Though there is no exact, universally accepted definition of specialty drugs, NASP describes them as “complex” and often expensive treatments for serious conditions like cancer or hemophilia.

Specialty pharmacies often stock medications that require precise, temperature-controlled storage. They provide support like regular follow-ups, plus nurses who deliver at-home infusions of medicine when needed, Matt Perlberg, president of pharmacy and care delivery at Evernorth Health Services—the pharmacy, care, and benefits division of the Cigna Group—told Healthcare Brew.

“Oftentimes, when a [specialty pharmacy] patient gets a medication…it comes in what would look like a giant moving box, with lots of supplies: syringes, pumps, etc. And then those patients need help from highly trained experts to be able to administer those drugs on a consistent basis,” Perlberg said.

He gave the example of pulmonary arterial hypertension, a complex disease with 500 to 1,000 new diagnoses per year in the US, according to the American Lung Association. It can require medication that has a half-life of only a few minutes. It requires continuous, 24/7 IV infusion, leaving little room for error.

“A typical retail pharmacist…will likely never in their lives come across a pulmonary arterial hypertension patient. Our pharmacists, our nurses, and clinicians treat these patients every single day,” Perlberg said.

Vertical integration concerns

The US had 1,900 specialty pharmacies in 2024, according to a January 2026 report from healthcare data analytics firm Trilliant Health authored by Oakes. But about two-thirds of specialty pharmacy revenue goes to three specialty pharmacies vertically integrated with the Big 3 pharmacy benefit managers (PBMs): UnitedHealth Group’s OptumRx, Cigna’s Express Scripts, and CVS Caremark, according to the FTC’s 2024 report.

“My main concern with specialty pharmacies is the fact that they’re part of bigger vertically integrated organizations,” Norman Carroll, emeritus professor at Virginia Commonwealth University’s School of Pharmacy, said. “You don’t get the same sort of competitive push and pull you would if they were different organizations.”

Cigna was the second-largest specialty pharmacy organization by market share in 2024, holding a quarter of the market, according to Trilliant’s report.

Perlberg said the enterprise’s vast resources give patients a better experience. For instance, its specialty pharmacy, Accredo, runs 15 therapeutic resource centers, each focused on a specific disease, with specialty-trained pharmacists and nurses that patients can talk to 24/7.

“We’re able to deliver specialization, but at a national scale,” he said.

CVS Health spokesperson Phillip Blando told Healthcare Brew the company’s integration increases “access, affordability, and advocacy” for its customers and is “simplifying healthcare.” 

The FTC’s 2024 report, on the other hand, alleges that vertical integration “likely creates the ability and incentive for PBMs to increase utilization of certain drug products at affiliated pharmacies to generate the greatest revenue and profits for their respective conglomerates.”

The report examined two specialty generic drugs: generic Zytiga (abiraterone acetate), which is used to treat prostate cancer, and generic Gleevec (imatinib mesylate), which is used to treat certain types of cancer including leukemia. It found pharmacies affiliated with the Big 3 were often paid 20x–40x more than the National Average Drug Acquisition Cost, an amount calculated based on CMS data, and also “significantly more” than unaffiliated pharmacies.

The Pharmaceutical Care Management Association, which represents PBMs, has argued PBMs actually negotiate down high drug prices set by manufacturers, rather than driving prices up.

Limited distribution

Manufacturers also sometimes choose to distribute specialty drugs through limited distribution networks, which restrict specific drug availability to just a handful of specialty pharmacies.

“[Specialty pharmacies are] the primary channel through which specialty drugs are distributed,” Carroll said. “There’s a question there: Should they be the only ones?”

On one hand, limited distribution networks help manufacturers keep track of medications that come with unique administration and safety monitoring requirements, Carroll said.

“If you’re a drug company and you’re trying to set up a monitoring program, it’s a lot easier to go through a fairly limited number of specialty pharmacies than trying to keep up with 50,000 retail pharmacies,” he said.

Blando said manufacturers may limit distribution “to those pharmacies that can meet specific clinical, safety, handling, monitoring, and patient-support requirements” in order to ensure safe and effective patient treatment.

Blando and Optum spokesperson Katherine Wojtecki both said that these networks are generally created by manufacturers, not specialty pharmacies.

“Optum Specialty Pharmacy makes every effort to participate in those networks to give patients access to the drugs they need,” Wojtecki said.

But limited distribution networks can also reduce access, and brand-name manufacturers have previously used limited distribution networks to prevent biosimilar companies from acquiring enough samples of their drugs to do required testing, according to 2018 research in the American Journal of Managed Care.

Looking forward

Biosimilars—low-cost versions of FDA-approved brand-name biologics—are a way to “potentially reduce spending while maintaining access and…outcomes,” Oakes said.

PBMs vary in how much they promote biosimilars and which biosimilars they choose to promote. CVS’s Blando and Optum’s Wojtecki both told Healthcare Brew their respective PBMs support biosimilar uptake.

The FDA, for its part, has suggested steps to streamline biosimilar development.

States have also targeted vertical integration and limited distribution networks with minimal success.

Arkansas tried to crack down on limited distribution networks through HB 1531, a law signed in 2025, prompting lawsuits from multiple drug manufacturers. But in July 2026, the Arkansas State Board of Pharmacy decided not to enforce the law after a judge ruled it violated the US Constitution’s dormant commerce clause, which prohibits states from discriminating against interstate commerce.

Tennessee’s FAIR Rx Act, signed into law in May 2026, prohibits companies that own a PBM or health insurance issuer from having more than 5% ownership interest in a pharmacy in the state. The law is intended to take effect July 1, 2028.

“No company should be able to write the rules, steer the patient, set the payment, and then own the pharmacy that profits from the transaction,” FAIR Rx sponsor and Tennessee Sen. Bobby Harshbarger said, according to a May press release from the Tennessee Pharmacists Association.

The Tennessee law is currently being challenged in court by several PBMs.

In a June 12 press release, Evernorth Health Services said the law would force the closure of Accredo’s Memphis facility. The pharmacy said it shipped more than 168,000 prescriptions to over 32,000 Tennessee patients in 2025. Over 20 of these medications “are available to dispense only through Accredo,” the release says.