Manufacturers

Demonstrating Value Beyond Pick, Pack and Ship

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Understanding the critical role of the specialty distributor

August 18, 2015

Just like every other stakeholder in the healthcare continuum, pharmaceutical manufacturers are focused on improving patient lives while managing growing regulatory, competitive and financial pressures. As cost-reducing pressures become more critical for specialty manufacturers, there has never been a greater need for specialty distributors to demonstrate their value beyond the basics of pick, pack and ship. Through transparency into their broad totality of services, specialty distributors can establish their domain as essential and trusted partners that are crucial to product commercialization success.

It starts with a better understanding
While pick, pack and ship may be the most visible and certainly the easiest component of specialty distribution to quantify, it actually represents the smallest aspect of the overall value equation in today's specialty-driven healthcare environment. As the complexity of specialty distribution has expanded, so has the role of the specialty distributor, leading to the emergence of a more holistic definition of what this role actually entails and the myriad benefits it offers specialty manufacturers. This holistic definition now includes:

  • Distribution services: Provider validation and monitoring to ensure end-user legitimacy and proper licensing, as well as appropriate use, are an increasingly important area of specialty drug distribution and order management. Progressive specialty distributors have made the infrastructure investments and innovations necessary to make sure that busy specialty practices can place, track and receive orders safely and efficiently while complying with the regulatory and security measures that are integral to the safe and secure delivery of high-value specialty drugs. Also critical to the safe delivery of costly specialty therapies include important distribution services such as cold chain and ambient temperature management. 
  • Financial management: By serving as the intermediary between the manufacturer and the individual physician practice, specialty distributors remove receivables risk for manufacturers and prevent disruption in product flow. And, by handling practice pricing, accounts receivable management and inventory management, specialty distributors can mitigate financial constraints and market access barriers that might otherwise delay speed to therapy for patients, which is the ultimate test of a specialty supply chain.
  • Information and data management: By offering transparency into the inventory and sales data that is the key to managing their own businesses, specialty distributors provide their manufacturer partners with timely and accurate insight into usage and practice specifics that can fuel better decision-making and planning. They also play a key role in increasing awareness or restricting access to REMS and other compliance programs required by the manufacturer and the FDA. As medications and therapies become more disease and patient-specific and the value of data continues to rise, so will the value of specialty distribution partnerships that are anchored in robust information management processes.
  • Sales and marketing services: Specialty distributors increase the reach and scope of a manufacturer in a variety of ways. For example, by managing price, terms, logistics and receivables, specialty distributors allow manufacturers to focus their representatives' efforts on the science and efficacy of their products. And, during product launches, new indications, billing code changes or recalls, a specialty distributor partner can expand both a manufacturer's reach and speed when specialty market access and depth of market knowledge are particularly important. Implementing informational and product specific marketing campaigns are also value-added services provided by specialty partners, which can help extend a manufacturer's messaging needs and strategies into targeted constituencies. 

The added benefit of specialty practice insight
Equally important as the tangible advantages specialty distributors offer manufacturers are the intangible benefits they offer-benefits that are the by-products of a deep understanding of the specialty practice and long-standing relationships with manufacturer partners. These intangibles include the knowledge of and insight into the established habits and demands of specialty practitioners, which can shape and define provider satisfaction with a specialty supplier. These insights include:

  • Specialty practices generally do not have prime vendor relationships so they tend to shift specialty suppliers based on pricing concerns. This can add more pressure to receivables management and requires individualized processes and procedures in order to appropriately manage expectations.
  • Order sizes are smaller and more frequent, with speed of delivery of paramount importance. This prevents the efficiency of order consolidation and adds a layer of complexity to logistics management.
  • Cash flow management is a specific concern of specialty practices. Assisting practices with this challenge is a distinct attribute of the specialty distributor and is as necessary to a successful practice relationship as is trusted distribution.

Delivering on the promise of a value-based partnership
As the healthcare landscape becomes increasingly focused on the specialty experience-from manufacturer to practice to patient-specialty distributors are no longer simply distribution logistics providers. Today, they are valued and trusted partners in the integrated continuum of quality care.

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