Specialty Pharmacy Product Distribution: The Advantages for Manufacturers

Specialty pharmacies offer a unique distribution model that, unlike more restrictive product distribution models, enables manufacturers to track product use in real time without having a substantial negative effect on patient access.

Supply chain optimization is a blend of art and science that is a key part of securing medications for patients, according to Doug Cook, president of Global Specialty Logistics at AmerisourceBergen Specialty Group.

Not every manufacturer supplies medications to pharmacies in the same way. Manufacturers must decide how broadly a medication will be distributed, or where a medication will be administered in the case of certain specialty products administered in specialized infusion centers, or under the supervision of a health care professional. Decisions about supply chains also affect how well manufacturers can track which patients and which areas of the country are using a given medication.

Customizing the supply chain is an important role of the specialty pharmacy manager that helps manufacturers understand how medications are being used.

Manufacturers may need certain assurances that each specialty pharmacy included in a specialized distribution program is able to order, pay for, and administer or dispense the specialty medication according to the manufacturer's protocols. Each distribution model offers certain advantages and drawbacks.

One of the most restrictive distribution models is the drop ship model, which relies on a single stocking location to store a medication and track its distribution. Manufacturers may use this distribution system for very expensive products, products that are used at only a few sites around the country, or products with stringent storage requirements or security requirements. Unfortunately, this model may limit patient access to critical medications.

Under the specialty pharmacy model, anywhere from 1 to 12 pharmacy locations may stock a medication. From each of these pharmacies, the manufacturer then collects usage data for the medication.

Distribution through specialty pharmacies carries several advantages for manufacturers. For instance:

• Specialty pharmacies help manufacturers deal with hurdles like reimbursement challenges, such as prior authorizations.
• Specialty pharmacies offer counseling services to help improve patient adherence and enable manufacturers to track product distribution very closely.
• Specialty pharmacies offer a high degree of control over their product supply and real-time data about product supply without having, what Cook calls, “a drastic, negative impact on product access.”

Specialty pharmacy offers patients access to medication, while supplying manufacturers with a wealth of real-time data, including information about the providers prescribing a given medication, and the patients using that treatment. Cook noted that one important advantage of this model is that it, “effectively eliminates delays in reporting and the need to integrate multiple data sets or use external data bureaus.”

Through the specialty pharmacy model, pharmaceutical manufacturers can secure a reliable supply chain for products that are subject to special handling, reporting, and regulatory requirements.

Reference

AmeriSource Bergen. Executive Q&A: Models Matter. http://www.icsconnect.com/resources/dyn/files/1227118z541b5ebb/_fn/018_CreateStrategiesforBuildingCustomizedDistNetwork_r2.pdf. Accessed December 19, 2014.