The stakes are high for life science companies when establishing the “best fit” drug distribution and channel strategy for a brand across the lifecycle, particularly since strong market access is no longer a guarantee to ensure a high percentage of covered dispenses at the pharmacy.
Many manufacturers know that a critical input into maximizing gross-to-net is the pharmacy network. A robust, and varied national network of pharmacies that combine retail, chain and specialty pharmacies is the best way to maximize plan contract coverage and reimbursement rates. Unfortunately, they conclude that the solution is to string together their own network of pharmacies or specialty pharmacy partners.. However, committing to managing a disparate and convoluted dispensing network is risky, operationally challenging, and often proves to be a costly mistake. A complicated network design can create confusion for prescribers, dilute the patient experience, and reduce the percentage of covered dispenses realized by your brand which will ultimately negatively impact over gross to net and contribute to commercial stagnation.
The good news is that this scenario can be avoided. Here are three advantages of developing a strategic commercialization partnership that connects your brand with a broad dispense network offering a high health plan coverage.
Even after a successful launch, life sciences companies cannot rest easy that their products are making their way through the various distribution and dispensing entities into the patients’ hands – unless they are confident these partners are executing against properly established business rules.
Without some control and insight into the process, it’s too easy to be blindsided by a pharmacy network running awry and then scrambling to do damage control. Once problems arise, it can require significant resources, time, and money to fix the issues and repair any negative perceptions in the marketplace.
A business rules engine embedded within supply chain software automates decision-making and can provide guidelines on how a pharmaceutical manufacturer’s products are distributed and dispensed. With the ability to set and update business rules as necessary, commercialization teams can leverage distribution operations across a brand’s lifecycle to better connect patients to therapy.
Life sciences companies are best served by a patient support hub that functions as a liaison between the distribution channel and the patient. This partnership will give them more control over business rules so that each prescription is triaged to the pharmacy with the best coverage and reimbursement, improving the experience of healthcare providers and patients. Providers know upfront to which pharmacy they should send the script so that it gets covered and patients can pay the lowest possible out-of-pocket costs.
Technology powered by data and analytics can empower lean organizations to do more with less. However, data is useless if locked away in databases and unwieldy platforms or siloed across a disjointed supply chain. Users should not have to waste time sifting through complicated and disparate reports only to find outdated, inaccurate data. Inevitably, this is often the case when managing a home built pharmacy network comprising a range of network partners. Poor data quality is a barrier to digital transformation that often leads to inadequate decision-making.
Real-time data capture and management across the supply chain provide visibility into all stages of product movement and offer insight into market activities around product usage. This visibility helps life sciences companies stay competitive and leverage data in their favor throughout every step of their supply chain. An effective commercialization partner will provide the metrics that matter to the success of your brand and allow your teams to unlock insights easily through intuitive, interactive dashboards.
According to an IQVIA report, the share of drug launches by emerging life sciences companies has grown four-fold over the last decade. In 2021, small biopharma companies originated and launched 42% of all novel drugs, up from 11% in 2012.
The report also notes that products originating from these biopharma companies “have generally achieved lower sales when they launch themselves compared to when larger companies launch the products.” Not surprising given that smaller manufacturers are typically very lean organizations – which on the upside, enables them to be very agile and innovative – but when it comes to investing in and developing the internal capabilities to manage their supply chain, they are at a disadvantage.
Managing product distribution is a significant expense for pharmaceutical manufacturers due to the complex nature of the infrastructure, which may include distributors, third-party logistics providers (3PL), and specialty pharmacies. The administrative burden associated with inventory management, logistics, regulatory compliance, IT systems, and working with multiple vendors can quickly become overwhelming for smaller companies. Minimizing supply chain costs and maximizing efficiencies need to be a top priority.
Finding a commercialization partner that offers end-to-end integration of a patient access hub and a distribution network structure that already has dispensing and wholesale contracts with retail pharmacies can empower smaller drug companies to achieve commercial success on their own.
A fragmented dispensing network diminishes a manufacturer’s ability to deliver to patients and negatively impacts the bottom line. Teaming up with a commercialization partner that has invested in the distribution entities, technologies, and processes to support the needs of emerging life sciences companies bringing novel therapies to market, is the key to brand success.
With Phil, you can access a nationwide pharmacy composed of retail, chain, and specialty pharmacies with 98% plan coverage. Real-time insights and the ability to set business rules ensure a consistent, predictable experience across the supply chain. Read this case study to discover how Phil unlocked coverage and maximized reimbursement for a leading women’s health product.
Our consultants will work with you to analyze your current channel strategy and make recommendations for how to improve patient access and increase the percentage of scripts getting covered by insurance.