Approximately 80% of manufacturers are already managing their products, many of which are oncology drugs, through a limited distribution model.
Oncology is already among the top therapeutic classes in specialty pharmacy.1 Experts say that drugs to fight cancer will continue to dominate the next wave of FDA approvals and enter the market at a rapid pace. Yet specifically how these medications are delivered to patients is also expected to evolve over time. This is especially true as manufacturers look to partner with specialty pharmacies that possess highly specific expertise in supporting patients with cancer and their complex treatment regimens.
Approximately 80% of manufacturers are already managing their products, many of which are oncology drugs, through a limited distribution model.2 A limited distribution network is a carefully vetted group of specialty pharmacies selected by a drug manufacturer to dispense a particular drug. Pharmacists and support staff at these network pharmacies are typically trained by the drug’s manufacturer to support patients receiving this specific therapy. Within the oncology space, manufacturers typically limit access to their drugs to anywhere from 1 to 3 specialty pharmacies of the approximately 60,000 traditional and specialty pharmacy options available to them.3
By their very nature, oncology medications distributed through specialty pharmacies are already somewhat limited in distribution. This model aligns with the unique capabilities of specialty pharmacies themselves. Specialty pharmacies typically employ highly trained experts in specific disease states—such as cancer—who can provide high-touch support to patients, ranging from adherence strategies to patient education and data-driven clinical recommendations.
This ongoing outreach ensures that all patients are receiving the greatest benefit from their therapy while minimizing adverse events. At the same time, these pharmacists are often skilled in care coordination, collaborating with the patient’s prescriber, serving as an important member of the individual’s care team, and acting as an advocate for the patient in communicating with insurance companies.
MOVING FROM LIMITED TO EXCLUSIVE
There are a few types of limited networks in place to support patients with cancer today. The smallest models in this spectrum are the exclusive, ultralimited networks, which may include just a single pharmacy. These avenues are frequently used to distribute orphan drugs—medications that treat rare health conditions. This is a direct result of the willingness of payers to extend access to a single pharmacy for such a small group of patients. Limited small networks, in the middle of this spectrum, typically expand this reach to 2 to 5 pharmacies. These are often a mix of independent pharmacies and those owned by payers or pharmacy benefit managers. That's important because independent pharmacies don't limit in-office dispensing of medications, which is critical in the oncology space. Finally, limited large networks feature a larger range of pharmacies, anywhere from 6 to 15. They include the broadest mix of pharmacy types, both large and small, nationwide.
Results from research show that some drug manufacturers are now starting to move toward the more limited end of this spectrum within oncology. Although limited distribution networks for these drugs used to commonly include upward of 25 to 30 pharmacies, they currently comprise 1 to 3 on average.4
IDENTIFYING THE FACTORS THAT INFLUENCE NETWORK SIZE
Drug manufactures must consider a host of issues when deciding on a network distribution strategy. However, there are 3 key factors that play the most significant role in the size of the specialty drug network itself. These are:
1. THE DRUG’S CLINICAL PROFILE
This includes the nature of the drug, its indication, the complexity of administration, and other clinical issues. To align with these requirements, manufacturers will carefully vet specialty pharmacies to make sure they have the expertise, experience, and capabilities to support patients on a particular treatment. For oncology drugs, this requires that a pharmacy’s staff not only has the knowledge needed to answer questions and provide guidance to these patients but also understands how to provide compassionate support that accounts for the patient’s holistic needs—including physical and emotional factors such as social support.
2. THE MANUFACTURER’S NEED TO SUPPORT THE LAUNCH OF A NEW THERAPY
Some oncology drugs require very significant training of pharmacy staff to help identify issues that could interfere with a patient’s optimal response to treatment. Even if a pharmacy is highly experienced in this thera- peutic class, a manufacturer could develop specific training materials for providers and train pharmacy staff, which is much more scalable across a modest network size.
3. THE DRUG’S PATIENT POPULATION
Manufacturers must carefully balance the network size with access to health insurer coverage. For example, with drugs that are not used to treat rare conditions, manufacturers must make sure that enough pharmacies are in-network to promote drug coverage availability for the patient (specialty pharmacies with strong relationships with health insurers have a distinct advantage regarding this factor).
WHAT MATTERS MOST TO MANUFACTURERS
To be a strong candidate for inclusion in a limited distribution network for the latest oncology therapies, specialty pharmacies must possess the right combination of clinical, operational, and other in-house capabilities. While the following is not an exhaustive list, some of the most-sought-after attributes by drug manufacturers are highlighted below.
• CLINICAL EXPERTISE
As noted earlier, a pharmacy’s specific expertise and experience in supporting patients with cancer is by far among the most essential attributes. This might include the pharmacy’s years of experience in this therapeutic class, the number of patients with cancer served, and its background distributing similar therapies. Other clinical capabilities could include the ability to distribute materials, such as starter kits, the availability of adherence programs and services, and generally the ability to achieve “controlled trial-like conditions in the home” to improve patient response to treatment.5
• DEDICATION TO QUALITY
Although quality can be hard to consistently quantify in some sectors, in specialty pharmacy, it’s most often exhibited by national accreditations from leading quality organizations such as URAC, the Accreditation Commission for Health Care, and others. These organizations have rigorous standards that are widely recognized by manufacturers as essential to preserving patient safety.
• DATA AND REPORTING
As the entire health care industry moves toward data-driven decision making, specialty pharmacy will as well. Pharmacies must have the ability to deliver actionable insights to their manufacturing partners that are timely, accurate, and comprehensive. This information is used by the manufacturer to better understand drug performance, including patients’ responses to therapy and any particular challenges to optimal outcomes.
• OPERATIONAL PERFORMANCE
Pharmacies must also have the infrastructure needed to support the unique shipping and handling requirements inherent in many of today’s new oncology drugs. Given that these are often lifesaving therapies, delays in fulfillment must be avoided at all costs. As a result, pharmacies must be able to provide overnight shipping when needed and have distribution networks that can handle emergencies and natural disasters. Issues such as hurricanes and wildfires have frequently put these networks to the test in the past year alone. Additionally, pharmacies must have strong experience in supporting patients who need help securing financial assistance or receiving prior authorization through their drug coverage.
• PAYER ACCESS
Both payer access and national reach are critical for pharmacies that wish to be included in most limited networks. This comprises the pharmacy’s working relationships with payers, the number of relationships it has, and the number of covered lives or patients served.
• A PARTNERSHIP THAT DRIVES MUTUAL BENEFIT
Overall, today’s drug manufacturers are looking for pharmacies that can be true partners in their success, supporting product launches and ensuring patients are receiving the support needed to improve treatment response. This is especially important for smaller start-up manufacturers whose entire business model may hinge on the success of 1 particular drug. Pharmacies that are willing to go the extra mile to provide outstanding service and support, and keep at the forefront many of the other factors noted above, will be well positioned for inclusion in even the smallest limited distribution networks. As manufacturers increasingly look to these modest networks to distribute new therapies, that willingness can mean the difference between success and failure for many independent pharmacies.