Sector Spotlight: Specialty Pharmacy

Why investors like the space and what drives differentiation

Specialty pharmacies are a vital link in the pharmaceutical value chain, connecting drug manufacturers to patients and creating critical relationships along the way. This link is becoming increasingly essential due to the ongoing trend toward specialized therapeutics for newly treatable conditions.

Here, senior bankers from the Harris Williams Healthcare & Life Sciences Group and Technology Group share why the specialty pharmacy space is attractive to M&A investors, and which company traits set leaders apart.

Why is This Sector on Investors’ Radar?

Hepper: The future of pharmaceuticals is more specialized, with bespoke treatments for complex conditions dominating R&D pipelines. Historically, manufacturers targeted therapeutic areas with large patient populations, in which a new drug could capture a sizable market and be easily supported by payors. However, these opportunities are mostly addressed, and many blockbuster drugs currently face patent expirations. Manufacturers are now seeking new ways to generate revenue and are placing greater emphasis on smaller populations and specialty pharmaceuticals.

Porter: These manufacturers have uncovered the substantial growth opportunities in the nooks and crannies of the market. In these very small, very high-value patient populations, each person might represent millions in annual revenue to the manufacturer. To serve these patients, companies have invested billions to develop novel, life-changing therapies. Now, they must recover those dollars by getting these expensive drugs to patients as easily, cheaply, and safely as possible—making the role of the specialty pharmacy more critical than ever.

Hepper: As we heard at Asembia’s Specialty Pharmacy Summit this year, the logistics of administering specialty drugs is also highly complex, with multiple parties involved, including physicians, payors, pharmacies, and patients. Therefore, a manufacturer needs a pharmacy that ensures each party is coordinated and is performing their role effectively, so the patient is getting their treatment and the pharma company is getting paid. This is creating strong interest in innovative specialty pharmacy platforms that help pharmaceutical companies unlock the full value of the specialty drugs they’ve developed.

Porter: There are several businesses doing this now, and it's a rapidly expanding area in the pharmacy ecosystem due to the expansion of specialty therapies within the overall drug market. In addition, the specialty pharmacy sector is highly fragmented and primed for M&A. There are excellent opportunities for investors to consolidate the market into scaled platforms and build a differentiated, comprehensive suite of services in the space.

What Differentiates Leading Companies in the Space?

Hepper: Top performers in this sector are not purely distribution pharmacies. They’re creating critical, sticky relationships with the health system, manufacturer, or patient. Health systems, for example, need better solutions to serve their patients’ pharmacy and infusion needs. Specialty pharmacies are well positioned to get closer to these health systems by providing outsourced pharmacy solutions like inpatient pharmacy management, outpatient specialty pharmacy management, or infusion services.

Linsalata: Specialty pharmacies bring a level of professionalization and efficiency to these health systems, such as with more advanced technology, better IT systems, and inventory management. They're experts at running a modern, tech-enabled pharmacy and will keep patients in that ecosystem while creating profit for the health system. As a result, they are adding value and are compensated as essential outsourced providers with much higher margins.

Hepper: Another differentiator for specialty pharmacies is getting closer to the patient. One strategy for this is infusion, either in-home or ambulatory. These companies add value to the healthcare system by seeing patients in their home, which is a lower-cost-of-care setting than infusion alternatives inside the health system. This develops a vital relationship with patients, who may need these medications for the rest of their lives.

Winning companies in this space are also establishing strong relationships directly with the manufacturer. For instance, there’s a growing market for specialty pharmacies that provide white glove service around complex patient populations. This could mean temperature-controlled delivery or high levels of customer service to make sure patients have everything they need.

Porter: Manufacturers realize there's a lot of pain and cost associated with serving these patients the right way, and they're willing to give specialty pharmacies exclusive distribution rights and better margins to do so. Companies that stand out are true solution providers beyond just distribution. They meet pharmacy manufacturers’ rapidly evolving needs and operational challenges, which helps them add value and become critical partners.


Specialty pharmacy services are becoming increasingly vital throughout the pharmaceutical value chain. As the trend toward specialty therapeutics continues, their role will only become more essential—providing long-term growth opportunities for companies that establish critical partnerships with health systems, patients, and manufacturers.

The Harris Williams Healthcare & Life Sciences (HCLS) Group has experience across a broad range of sectors, including healthcare providers, payors and payor services, outsourced pharmaceutical services, medical device supply chain, healthcare IT, and pharmacy. For more information on the HCLS Group and other recent transactions, visit the HCLS Group’s section of the Harris Williams website.

The Harris Williams Technology Group has deep domain expertise in software and technology-enabled services and dedicated focus areas across a variety of vertical software applications and end markets. For more information on the Technology Group and its recent transactions, visit the Technology Group’s section of the Harris Williams website.

Contact our senior bankers to learn more.

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