PROJECT SUMMARY Specialty drugs are innovative, high-cost therapies used to treat complex, chronic conditions such as cancer, rheumatoid arthritis (RA), and multiple sclerosis (MS). Despite the medical advances offered by these medications, studies have shown that adherence to specialty drugs is suboptimal; the negative outcomes associated with poor adherence are also well documented. Given that patients often experience adherence barriers and require extra support to reap the full benefits of treatment, specialty pharmacies—specialized distribution channels to handle specialty drug treatment—have quickly emerged as a valuable tool to improve adherence to specialty drugs. The support services offered by these pharmacies (e.g., identifying financial assistance, offering extra patient education) hold particular promise for Medicare beneficiaries, who often face unique circumstances that make adherence a greater challenge. Despite the potentially helpful services offered by specialty pharmacies, available evidence suggests that most Medicare beneficiaries continue to fill their specialty drugs at regular retail pharmacies. Further, studies till date on adherence improvements associated with specialty pharmacy use are limited in both methodology and generalizability to the Medicare population. Empirical evidence on the use of specialty pharmacy by Medicare beneficiaries and the impact on medication adherence is needed. Thus, the aims of this study are (1) to examine trends and geographic variations in the use of specialty pharmacy as the dispensing channel for specialty drugs among Medicare beneficiaries from 2013 to 2017; (2) to determine the impact of specialty pharmacy use on adherence and treatment gaps among Medicare beneficiaries newly initiating a specialty drug, using an instrumental variable analysis that allows for “causal” inference; and (3) to determine the impact of specialty pharmacy use on outcomes among Medicare beneficiaries newly initiating a specialty drug. This study will be the first to use national Medicare claims data and instrumental variable analysis to address these research questions in Medicare patients initiating specialty drugs for chronic myeloid leukemia, chronic lymphocytic leukemia, rheumatoid arthritis, and multiple sclerosis. Our study will offer robust evidence on the effectiveness of specialty pharmacies at improving adherence and outcomes in the Medicare population and identify patient subgroups most likely to benefit from use of such pharmacies. Strong empirical evidence on the benefit of specialty pharmacies for Medicare beneficiaries may spur policymakers to reassess the Any Willing Pharmacy (AWP) provision under Medicare Part D, which may inadvertently drive the high rates of retail pharmacy use for specialty drug fills in this population. Finally, the results of our study will guide subsequent R series grants to identify specific specialty pharmacy types and/or support services that are most effective, with...