Our News & Views
Mike Scott, Partner and Paul Callahan, Principal
How Specialty Pharmacies Can Elevate Your Channel and Distribution Strategy for HCP-administered Buy & Bill Products
"When developing an optimal channel strategy for an in-office, HCP-administered B&B product, we recommend a few approaches. It is a good idea to consider including at least one SP in-network in your B&B channel strategies, regardless of the disease state."
A successful channel and distribution strategy for Buy & Bill (B&B) products should be centered around the partners you sell to and through. That means considering any third-party logistics (3PL) providers, specialty distributors (SD) and specialty pharmacies (SP) who will touch your product between the manufacturing/packaging site and patient administration. Taking a holistic view of the entire product and patient journey will give you the insight you need to make thoughtful and cost-effective decisions as you pull together this critical part of your overall strategy.
Procurement and administration options for HCP-administered B&B products
With the continuing rise of HCP-administered therapies for multiple disease states in the last five years, it is in everyone’s best interest to know how to optimally support HCP-administered B&B products. Five years ago, most manufacturers would consider and evaluate only two methods of procurement and sites for administration:
Product purchased from a network SD and received in-office by the prescribing and/or administering physician’s practice
Product purchased from a network SD or full-line wholesaler (FLW) and received in a hospital outpatient infusion center or an alternate site of care that specializes in B&B product administration
A major challenge with the first approach is that some providers are not equipped with the infrastructure or they lack the training required to support in-office administration. This is especially common if they do not regularly prescribe HCP-administered products.
Additionally, with the high cost of many of these new products and the inherent concerns regarding potential reimbursement obstacles, some physicians were, and still are, uncomfortable taking the risk of buying the product, administering it and then seeking reimbursement from payers.
For the second option, payers specifically view the hospital outpatient setting as one of the higher cost sites for administration and would prefer less expensive sites of care.
Specialty pharmacies and HCP-administered B&B products
As noted above, for anyone administering a B&B product the cost of product acquisition and the risk of reimbursement can be daunting. Outfitting a provider's office with equipment and staff – as well as purchasing the product in advance of reimbursement for what may be a very expensive product – can become too burdensome or risky for some providers. Another challenge? There is not always a hospital outpatient or alternate site of care setting close to providers or patients that are easily accessible for what may be as often as a weekly treatment visit for certain patients.
To address this, SPs have entered the playing field as a viable option for risk-averse offices that prescribe HCP-administered B&B products. By buying the product, sending the product to the HCP for administration and then seeking reimbursement on behalf of the patient's insurance for the product, SPs have taken on the assignment of benefits associated with procurement and reimbursement. The SP absorbs the reimbursement risk in handling these aspects while providing another option to HCPs on how and where they can procure their product of clinical choice. Due to this, SPs have been a welcomed addition to the B&B landscape by both payers and providers alike due to their ability to take away some of the concerns HCP's may have when administering high-cost products.
Why you should add an SP to your channel & distribution models
When developing an optimal channel strategy for an in-office, HCP-administered B&B product, we recommend a few approaches. It is a good idea to consider including at least one SP in-network in your B&B channel strategies, regardless of the disease state. This is primarily based on:
Having only one procurement option for a B&B physician may negatively impact their prescribing habits even if they clinically believe in the product
Payers will generally look more favorably on having an SP in-network as a B&B alternative even if the pharmacy is not aligned to the payer
While home infusion options continue to grow, most products are not yet able to offer an in-home option
Using this rationale, adding an SP to the distribution strategy is simply sound judgment. It supports procurement flexibility for the prescribing physician while considering reimbursement impact.
SP trends and terminology to take into account
There are a few things we advise you to be aware of when adding an SP into your channel strategy. Although the historical approach of many manufacturers has been, "the more in-network SPs the better", when it comes to adding multiple SPs to a model, recent trends have shifted away from that thinking. The antiquated view that a payer will not cover the cost of an HCP-administered product because it is not going through a payer or PBM preferred SP is not a reflection of the industry today. Today’s SPs and payers are experienced and comfortable working through any coverage or reimbursement issues, including obtaining letters of agreement (LOA) to broaden plan access, especially for highly efficacious and clinically differentiated specialty products.
Even more importantly, manufacturers need to be cognizant of the often misleading terminology used by many of today’s channel partners and pharmacies. When you hear someone calling a product’s pharmacy or distributor network “limited”, it is usually because their own SP or distributor is not part of that network. Using “limited” terminology gives the false impression that the network somehow provides less access for patients and prescribers to the product – which is simply not true. Access can be just as broad for an exclusive SP network as it is with a network with multiple SPs.
Providing a controlled and consistent patient experience is key
An even more important reason that one may not be the loneliest number when it comes to your SP distribution channel strategy is the ability to streamline the consistency of the patient experience. If you go with the "more is more", approach and add five SPs to your B&B model, that means you now have to manage five different companies that have five different pharmacies and five different approaches to dispensing products and servicing patients. This can be overwhelming for you, your patients and providers. Having an exclusive SP partner allows for a more consistent experience for the patient as they have to work with only one pharmacy that has one consistent approach.
By having your teams align and work one-on-one with the exclusive SP, you can provide a consistent patient experience. That includes your Medical Affairs team, your Sales team, your Reimbursement team and/or your Patient Support team. In this case "less is more", is the best approach to take by choosing just one SP.
Optimize your strategy for today and the future
Many of the newly approved and pipeline products coming to market today and over the next few years will be administered by HCPs. While many providers treating patients in disease states such as oncology, rheumatology, ophthalmology and gastroenterology have significant experience and comfort managing in-office administration, there are many other disease states where physician experience or the required infrastructure to support the in-office model is not easily accessible. Integrating an SP into your channel strategy provides physicians and payers with an additional procurement option that serves the patient well.
If you have a B&B HCP-administered product and want to discuss how Protean can assist in the development or optimization of your channel strategy, contact the authors at firstname.lastname@example.org or email@example.com. For general inquiries about how Protean can optimize your market access approach for payer, patient services and channel/trade, or if you would like more information on our services or our experience, feel free to contact us at firstname.lastname@example.org.