CBI Channel Trends Trade and Specialty Data conference delves into the core topics in the supply chain for both traditional and specialty products.
The CBI Channel Trends Trade and Specialty Data conference was held in Philadelphia, PA last month.
The timely topics were presented by dozens of representatives from industry, specialty pharmacy, and service providers, with core topics covering supply chain of both traditional and specialty products.
The speakers focused on a unique set of dynamics that the industry fell into as a result of decisions that were made as to how manufacturers and wholesalers serviced each other’s needs. It is interesting that the shifts in the generic space actually had a huge impact on traditional brands and specialty products.
The impact is even further heightened as the large retail chains have entered into long-term agreements with distributors, and with their leverage, further compressed wholesaler margins. The speakers predicted that this is the year the “straw will break the camel’s back.”
Clearly, distributors provide a service, but providers have yet to, in terms of economics, fully realize the value of those services. Selling the same basic set of pharmaceutical products creates little differentiation when it comes to picking, packing, and delivering the products to pharmacies. Therefore, competition and the fear of losing a large “top-line” customer drives pricing down.
Meanwhile, wholesalers have locked large customers out of self-distribution, and this has created leverage among manufacturers that must access community pharmacy and hospitals, primarily.
Those dynamics, however, do not come into play as much in the specialty space, where the manufacturer is frequently in the driver’s seat when it comes to limiting the distribution points of their specialty products, shipping directly to the end provider. That end provider can be a specialty pharmacy or a physician clinic.
The speakers discussed at length on this changing dynamic. While a number of larger pharma organizations have negotiated distributor services agreements that are often more economically efficient than in-house solutions, there is always the possibility that if wholesalers start to raise their service fees to big pharma, they may take the trade supply chain in-house. The bottom line is that the speakers said to stay tuned and be ready, as the wild card in health care is the new administration in Washington, DC.
The other key track at the CBI Event was specialty product data strategies. The discussions were competently directed by several leaders from the data management side of industry and service providers, whose focus is aggregating that data and providing business intelligence back to the users. This was more a technical track discussion.
The topics covered included: