Progressive leaders are balancing mission & margin
Pharmacy leaders are entering a new era, one defined not by incremental change but by simultaneous pressures requiring a redesign of how pharmacy operates. Growth is accelerating across specialty, infusion and retail channels, while drug supply instability, shrinking reimbursement and regulatory uncertainty are forcing organizations to rethink how they balance financial sustainability with patient care.
At St. Luke’s Health System, these pressures are shaping strategy in real time. As Josh Weber, PharmD, MBA-HCM, CSP, ACE, Senior Director of Ambulatory & Retail Pharmacy Services, explains, “Organizations that succeed won’t be the ones that simply cut costs. It’s the ones that redesign their operating models that will win in the current market.”
Pharmacy growth today is not just about revenue. It’s about access, retention and integration across the care continuum. Many health systems, including St. Luke’s, capture only a fraction of prescriptions generated by their own providers. At St. Luke’s, roughly 20% are filled internally, compared to a 50%–60% benchmark.
Closing the gap represents a significant opportunity
“We’re focused on improving access and capabilities across retail, specialty, ambulatory and infusion services,” says Brian Dotter, PharmD, MBA, CPEL, DPLA, Senior Director of Pharmacy for St. Luke’s. “That’s how we reduce fragmentation and keep care within our system.”
To support this, St. Luke’s is investing in a centralized, automated fulfillment center capable of handling up to 4,000 prescriptions per eight-hour shift, with a goal of scaling from 1 million to 3 million filled annually.
Growth also means aligning with shifting care models. As payers move infusion services to lower-cost settings, St. Luke’s is expanding ambulatory capacity, adding 25 infusion chairs within months.
The specialty surge
Specialty medications remain a dominant force, now accounting for more than half of total drug spend despite representing a small share of volume.
Pharmacy Growth at St. Luke’s in 2026
- Expanding internal prescription capture (20%–50%+)
- Scaling specialty & infusion services
- Investing in automation & centralized fulfillment
- Shifting care to ambulatory & home settings
- Building capabilities for cell & gene therapies
At the same time, the pipeline for rare diseases and cell and gene therapies continues to expand. These treatments, often exceeding $1 million per dose, require new operational, financial and clinical models. “You can’t be reactive anymore,” Weber adds. “You have to proactively build the infrastructure, partnerships and reimbursement strategies to support these therapies.”
For health systems, that means investing for months or years to become certified treatment centers to ensure patients can access care close to home.
Supply chain fragility meets clinical reality
Even as demand grows, supply challenges persist. More than 200 active drug shortages continue to affect the market.
Most involve generic medications, particularly sterile injectables, where margins are thin and manufacturing redundancy is limited.
“These aren’t just supply chain issues,” Weber emphasizes. “They’re patient care issues. Shortages delay therapy, increase costs and create stress for patients and providers.”
The global nature of pharmaceutical manufacturing adds complexity. A large share of raw materials for critical drugs is sourced outside the U.S., creating vulnerability to potential disruptions ranging from natural disasters to geopolitical tensions.
Building resilience through strategy
In response, organizations are shifting from reactive purchasing to proactive supply management.
At St. Luke’s, that includes a centralized service center (CSC) to manage inventory, forecasting and demand planning systemwide. This model improves visibility, strengthens allocation and enables faster response to disruptions.
“It allows us to maintain safety stock, respond faster and avoid reactionary buying,” Dotter explains.
As a group purchasing organization, HealthTrust plays a critical role by aggregating volume to stabilize pricing, secure supply and provide benchmarking insights. “By bringing together hundreds of hospitals, HealthTrust can leverage scale to create more predictable pricing and reliable supply for us,” Dotter says.
AI: From efficiency to value
Artificial intelligence is emerging as a key enabler, not just for efficiency but also for value creation.
At St. Luke’s, AI is automating inventory forecasting, prior authorizations and reporting. “We’re shifting our teams from transactional work to patient-facing work,” Weber says. “That’s where the real value is.”
This shift reflects a broader transformation, positioning pharmacy as a central driver of both clinical and financial performance.
Balancing mission & margin
For pharmacy leaders, financial sustainability and patient care are no longer competing priorities—they are interconnected.
Improving access, supporting adherence and keeping care within the health system enhances outcomes while strengthening margins by reducing lost prescription capture and improving efficiency.
“I don’t see mission and margin as opposing forces,” Weber says. “When you improve access and reduce friction, you create a more efficient cost structure and that strengthens both.”
Looking ahead
As pharmacy evolves, success will depend on a strategic, integrated approach that combines growth, resilience and innovation.
From centralized operations and AI-enabled workflows to expanded access and advanced therapies, the future of pharmacy is already taking shape. In a landscape defined by uncertainty, sustainable value will come from designing for change, not reacting to it.
340B Watch: Legal readiness in a shifting environment
As pharmacy leaders balance growth, access & financial sustainability, the 340B program remains a critical strategic consideration. According to industry expert & HealthTrust University Conference presenter Steven Schnelle, J.D., a partner at McDermott Will & Schulte LLP, 340B can help preserve resources, allowing covered entities to remain financially viable while continuing to support patient care. However, legal & operational discipline are essential. Organizations should closely monitor manufacturer restrictions, contract pharmacy data reporting, alternative distribution models, state licensure requirements, patient qualification, billing practices & documentation. Schnelle adds that the strongest defense against disruption from audits, rebate models or reduced 340B access is “robust & defensible documentation.”
Key areas to review now:
- OPAIS (Office of Pharmacy Affairs Information System) file accuracy, especially child sites
- Patient definition policies & supporting rationale
- Billing & duplicate discount safeguards
- Contract pharmacy & manufacturer data reporting
- Licensure requirements for alternative distribution models
- Documentation to support audit readiness & rebate model preparation
Hear more from Steven Schnelle when he presents “340B—The Legal Landscape” on July 22 at the HealthTrust University Conference in Denver. Not attending but have 340B questions? Email us at askIHP@healthtrustpg.com
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