Gaining entry in a limited-distribution world

For traditional retail pharmacies, one of the biggest roadblocks to entry into the specialty arena is the limited availability of many complex medicines. More and more of these high-ticket, high-touch drugs are entering the market via very restricted and exclusive networks as pharmaceutical manufacturers increasingly demand that the pharmacies dispensing those medicines demonstrate advanced clinical, documentation and patient-support capabilities, including the ability to improve adherence rates, conduct risk evaluation and mitigation strategies, and manage and monitor patient outcomes.

"We've seen significant growth in limited-distribution drugs," noted Atheer Kaddis, Diplomat's SVP sales and business development. What's more, he said, "pharmaceutical companies also are taking some products that were available through an open channel and now driving them into a limited-distribution channel" in search of a higher-touch service model.

Kaddis called the move to limit distribution "a significant threat to retailers, and even to the hospital outpatient pharmacies working with us."

Thus, one of the serious challenges faced by retail pharmacies, said CEO Phil Hagerman, is that "even if they [have] a specialty pharmacy [of] their own, they're not going to have access to these limited-distribution drugs. In order to get access ... you have to get there early and often."

That was a lesson driven home for Diplomat some five years ago. Hagerman said: "We were talking to pharmaceutical companies at drug launch time. We'd say, 'We're a big partner for you, and we'll manage some of this [distribution] for you and be part of your network.' But we [found] it was often too late. By then, they had decisions made already."

Diplomat now works with pharmaceutical companies very early in the development process to gain full access to some limited-distribution networks for promising specialty medications, often by the time those products are in "late phase 2 or early phase 3" of a new drug's clinical trials, said the company's chief executive.

"We focus a lot on the pipeline," agreed Cheryl Allen, VP business development and industry relations. Working closely with the clinical services team headed by VP clinical services Gary Rice, she said, "we ... look [out at the pharmaceutical pipeline] about 18 months out."

"We also work with pharmaceutical partners for products already on the market," Allen added. In that capacity, Diplomat provides expertise to a drug company that's considering moving one of its products from an open-to a limited-distribution network or learn more about "the patient's needs as they work through the journey" of specialty care, Allen explained.

The need for that expertise is particularly acute among smaller, start-up companies, Hagerman added. "Big pharmaceutical companies have their processes and plans pretty well in place, but a lot of these new drugs are coming to market from the small biotech sector, and some of these companies have never commercialized a product before."

Said Jennifer Cretu, VP information technology and marketing: "Diseases are more complex; costs are rising; regulations are increasing. So the management of our inventory is of absolute importance."