By Olivia D’Alleva (Partner), Caroline Guttridge (Engagement Manager), John L’Insalata (Senior Consultant)
In-office dispensing (IOD) is not a new concept for provider organizations. For much of the last decade, in-office dispensing has been siloed to oncology practices, where it has been very successful. Oncology practices built internal dispensing capabilities because the conditions were right: large, integrated sites with the patient volume and cash flow to employ clinical pharmacists, a rapid expansion of oral oncology therapies that created a script base worth retaining, and narrow specialty pharmacy networks where payer specialty pharmacy (SP) mandates carried relatively little influence. As payers started to implement specialty pharmacy mandates towards their own specialty pharmacies, Oncology manufacturers increasingly excluded payer SPs from their network in efforts to preserve the provider “white-glove” experience & economic benefit of internally dispensing, as well as protect time-to-fill given the extreme time sensitivity. The result is that internal dispensing has become a relatively mature and well-understood capability in oncology.
Some of that same logic appears to be traveling. Traditional buy-and-bill economics have come under pressure from payers through SP mandates and white bagging practices, and a growing share of advanced therapies arrive as pharmacy-benefit products. With these shifts, practices in immunology, neurology, and other specialties seem increasingly interested in IOD as a way to let pharmacy-benefit products compete with the medical-benefit revenue they are used to capturing, and / or offset revenue lost by diminishing buy & bill opportunity. One of the more commercially relevant signals for manufacturers and providers alike may be this: IOD could be shifting from a largely oncology capability toward an emerging cross-specialty growth lever, and some of the practices best positioned to capture it appear to be moving already.
The more interesting question may no longer be whether practices beyond oncology will build internal dispensing capabilities, but rather which specialties and practice types are likely to move first, what organizational characteristics tend to justify the investment, and how manufacturer response and GPO relationships might shape IOD opportunities outside of oncology.
Which Practices Have the Best Case, and Which Therapeutic Areas Have the Most Room
The value of IOD is not uniform, uncovering that practices need to have the right characteristics for IOD success. The strongest candidates often share a broadly consistent profile: high prescribing volume of advanced therapies, fluency in buy-and-bill, and the organizational infrastructure to develop and operate a pharmacy. Four characteristics, in particular, appear to distinguish likely near-term adopters from those for which IOD adoption remains premature.
Practice size and integration. Large organizations tend to have the financial flexibility, prescribing volume, and contracting leverage that make dispensing more feasible. Furthermore, integrated practices are often more capable of evaluating their own prescribing trends to manage stocking & contracting decisions to optimize economic return.
Number of sites and patient volume. Higher patient volume across multiple sites can help underwrite the revenue case, while lower volume may lengthen the payback period on the investment and raise stocking concerns for high-cost therapies.
Existing revenue capabilities. Practices already fluent in buy-and-bill dispensing of advanced therapies may be positioned to extend that capability into pharmacy benefit dispensing with less friction, whereas practices whose revenue is concentrated elsewhere (i.g., procedures, patient office visits) tend to have less incentive to build a new service line.
Ownership structure and location. Private-equity backing can supply the capital to stand up a pharmacy, while physician-owned practices often carry more of the investment risk themselves. Geography can be a gating factor as well: state regulation shapes whether dispensing is permitted at all, and organizations spanning multiple states may be able to dispense at some sites but not others. Given these dynamics, practices often opt for a regionally based specialty pharmacy model that serves select states to support these varying permissions and dispensing feasibility.
Layering these characteristics onto specialty economics offers a sense of where the opportunity may be greatest. Large Rheumatology practices appear to be especially well positioned. With key revenue streams spanning buy-and-bill of biologics, diagnostics, and a growing share of advanced therapies arriving on the pharmacy benefit, IOD is less likely to cannibalize an existing high-margin business and can instead layer on as a complementary opportunity. Rheumatology’s buy-and-bill familiarity may lower the barrier to standing up something similar with an internal specialty pharmacy. Allergy practices have similar characteristics to rheumatology, with strong buy & bill familiarity and similar volume opportunities across various product types (e.g., allergy shots, biologics, etc.).
Dermatology presents a more muted near-term case, as cash and cosmetic services already deliver consistent revenue and there is lower prevalence of existing buy & bill infrastructure.
Gastroenterology offers an instructive counterpoint. Procedures such as colonoscopies can drive up to 80% or more of GI account profit, followed by infusions and anesthesia, so IOD tends to register as a real but modest revenue stream rather than a primary profit driver. Despite this characterization, roughly a third of surveyed GI accounts are already internally dispensing, and another third appear to be evaluating or building the capability. Neurology, by contrast, seems to remain among the more constrained, held back by regulatory barriers and high startup costs.
Who Is Enabling IOD: The Partner and Vendor Landscape
A practice rarely builds internal dispensing alone, and the ecosystem of partners enabling IOD appears to be a meaningful part of why the model is spreading beyond oncology. Two partner types, in particular, seem to be reducing the barrier to entry.
GPOs and distributors tend to serve as the backbone for most launches. Practices often rely on their GPO or distributor relationships to establish contracts, access group pricing, and understand the operational and administrative requirements of standing up a pharmacy. Select immunology practices are already leveraging relationships with the major GPOs to support dispensing of both medical- and pharmacy-benefit products and some even offering guidance on IOD infrastructure implementation.
Third-party dispensing partners and concierge service providers appear to fill a distinct and increasingly valuable niche. Concierge providers generally offer more end-to-end support, developing the business plan, identifying required licensure, preparing a soft launch, integrating the EMR, and maintaining PBM-SP contracts. Dispensing partners more often focus on operating the pharmacy itself: managing prior authorizations, claims, appeals, inventory, and patient outreach, and providing ongoing analytics on script volume, reimbursement, and margin.
Named partners such as HouseRx are already supporting rheumatology practices, with some providers citing profit-sharing models that help relieve upfront risk and set up timelines in the range of six to eight months. Without partners like these, many smaller or busier practices might find it difficult to establish or maintain IOD at all, which may be part of what makes their expansion into new specialties a useful leading indicator.
Where the Growth is Headed, and Why
Providers tend to cite the same three motivations for exploring IOD: an added revenue stream, improved patient convenience, and a desire to keep pace with peers adopting new services. Reading those motivations against specialty economics and organizational readiness suggests a rough sense of where near-term growth potential may be concentrated across non-oncology therapeutic areas.
Rheumatology may have the greatest near-term potential, as it appears to combine one of the strongest structural fits, buy-and-bill fluency, high-cost biologic volume, and existing infrastructure, with a revenue base under pressure and a growing supply of pharmacy-benefit products to dispense. Additionally, the higher Medicare population minimizes the impact of specialty pharmacy mandates, which may be a barrier for in office dispensing utilization within the commercial channel. Allergy may follow, where high-volume, relatively low-restriction, dispensing could offer a workable case for the right organizations. Gastroenterology seems to show some of the fastest adoption momentum, even though dispensing tends to be a secondary profit driver, as growing national and regional supergroups apply financial backing and centralized dispensing models to build the capability at scale. Neurology appears to trail for now, where regulatory barriers and startup costs seem to keep interest ahead of implementation.
A common thread may be that the therapeutic areas with the most room to grow are those where traditional buy-and-bill revenue is diminishing, pharmacy-benefit product availability is rising, and the organizational profile (i.e., scale, integration, lack of geographic restrictions, and access to capital) tends to line up in support of the investment.
Why This Matters Now
For manufacturers, the emergence of IOD beyond oncology may reframe a familiar set of questions. For pharmacy-benefit products in competitive indications, supporting in-office dispensing could represent an area for differentiation, or a way to compete more directly with medical-benefit alternatives that practices are already accustomed to dispensing. That said, the strategy tends to carry meaningful trade-offs: manufacturers would likely need to weigh the implications for gross-to-net and overall product profitability, as well as the work of establishing the GPO contracts and relationships that make dispensing viable for provider accounts. The next few years may help clarify where the opportunity for differentiation outweighs those considerations, and which manufacturers are best positioned as in office dispensing becomes more common.
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