Pharmaceutical Commerce - March/April 2013 - (Page 10)

Business/ Finance What manufacturers should anticipate when working with specialty pharmacies When entering the specialty pharmaceuticals arena, manufacturers need to evaluate the capabilities of their channel partners carefully By Kent Rogers, Acorda Therapeutics Specialty pharmaceuticals are one of the most dynamic parts of the global pharmaceutical industry, and within the US, specialty pharmacy providers (SPPs) are emerging as an essential partner to manufacturers in commercializing products. Today’s specialty-distribution channel is still evolving: while many of the distributors are consolidating, more and more SPPs are emerging. The influence and acquisition of specialty pharmacies by payers, including managed care organizations and pharmacy benefit managers (PBMs) are a driving force as well. While SPPs are a critical element in appropriate care and cost-effective dispensing of specialty pharmaceuticals, each have their own business drivers that are separate, and in some cases, in contrast to manufacturer concerns. This fact requires manufacturers to evaluate their distribution choices strategically, and to negotiate carefully with the organizations that operate SPPs. What follows are some general guidelines on these strategies and negotiation positions. Some history Although SPPs are all the rage now, their basic function has been around for decades: delivering complicated, specialized drugs to patients. Specialty pharmaceuticals are generally regarded as those that: • Involve complex treatment regimens, monitoring of side effects and patient follow-up • Are often products of molecular biology, and delivered to the patient via injection or infusion • Targeted at chronic or rare diseases • Are high cost agents ($600/month or more is a usual baseline). Very often, specialty medications are dispensed in a clinical setting, such as a hospital or oncology clinic. As such, they are typically reimbursed as a medical benefit but recently there is a shift toward coverage through the drug benefit— complicating the reimbursement and payer-negotiation process. In addition, the intensifying shift of new small- and large-molecule products for rare or chronic conditions is putting SPPs squarely in the spotlight. Various market studies estimate the value of specialty pharmaceuticals at $70 billion (out of an overall US market of around $300 billion), and growing at double-digit rates, while the overall pharmaceutical market is growing at single digits. Concomitant with these high-cost, complex pharmaceuticals, a growing list of support services are being developed. The Healthcare Distribution Management Assn., in its 2012 Specialty Pharmaceuticals: Facts, Figures and Trends report, lists many of them (Table 1). Who provides these services—and how well they are carried out—is a crucial factor in executing a successful commercialization strategy. Focus on the ‘point of purchase’ Many specialty pharmaceuticals are distributed by major, full-line wholesalers, just as conventional products are; but most of the major wholesalers have developed specialty distribution subsidiaries to focus their efforts. At the same time, new specialty distributors have arisen, offering a more customized service. Some SPPs are large enough (including the centralized pharmacies of integrated healthcare delivery networks, as well as major chain drugstores and PBMs) to act as their own distribution and dispensing channel. There are specialty distributors whose services go well beyond the basic logistics of fulfilling orders (although, given that many specialty pharmaceuticals require temperature-controlled shipping and other specialized services, that is not a trivial undertaking) to provide patient-centered services such as prior authorization assistance or patient education. Finally, so-called “hub” services are well equipped to handle a multitude of patient-assistance services and, in some cases, the logistics of distribution of free goods or product to specialty pharmacies. (Figs. 1, 2). continued on page 16 FiVE PoiNTERS FoR SPP NEGoTiATioNS 1) Focus on the “point of purchase” for your product (in which channels should you launch and then expand to) 2) Avoid waste in the distribution model (retail vs. specialty vs. special distributors/GPOs) 3) Protect your company’s interests (REMS requirements, data requirements, etc.) 4) Maintain a manageable network (how many distribution partners will be based on your launch strategy, your target market and the nature of your product) 5) Negotiate, negotiate, negotiate! (the manufacturer should be seen as the customer; the SPP is providing a service) SERViCES AVAiLABLE To SuPPoRT SPECiALTy PHARMACEuTiCAL DiSTRiBuTioN Third party logistics (3PL) providers Customer call centers Electronic billing/reporting Loyalty/incentive programs Recall services Standardized billing Analytics/consulting Clinical pathways Formulary management Patient assistance/grant program management Sampling programs Claims/copayment collection Home delivery/infusion and orals Medication pre-authorization Medication therapy management Refill reminders Reimbursement services/consulting Utilization management Source: 2012 Specialty Pharmaceuticals, HDMA Direct Shipment to Patient Location 1 2 SP ABOUT THE AUTHOR SP Manufacturer Table 1 SP SP Flow of Product Fig. 1. Flow of product from manufacturer to patient. Credit: Acorda 10 Visit our website at www.PharmaceuticalCommerce.com March | April 2013 Patients Kent Rogers has been vice president of managed markets at Acorda Therapeutics since August 2010. Kent currently oversees a team of field-based national and regional account directors, as well as home office-based personnel in the areas of Market Access Strategy, Channel Strategy and Managed Markets Pricing & Contracting. Previous to Acorda, Kent held positions of increasing responsibility in sales and managed markets at Carter Wallace, Inc. and Schering Plough Corporation. Over the span of his career, he has had direct involvement in well over a dozen product launches in multiple therapy areas including; neurology, oncology, cardiology, allergy, immunology and central nervous system disorders. Kent has a BS in Business Management from Indiana University and an MBA from Emory University’s Goizueta School of Business. http://www.PharmaceuticalCommerce.com

Table of Contents for the Digital Edition of Pharmaceutical Commerce - March/April 2013

Pharmaceutical Commerce - March/April 2013
Editorial
Contents
Op-Ed
Top News
Business/Finance
Brand Marketing & Communications
Supply Chain/Logistics
Information Technology
Manufacturing & Packaging
Legal & Regulatory
Meetings and Editorial Index

Pharmaceutical Commerce - March/April 2013

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