AmerisourceBergen, No. 11 on the Fortune 500, is one of the Big Three drug wholesalers in the US, and positions itself as a provider of “innovative partnerships with global manufacturers, providers and pharmacies to improve product access and efficiency throughout the healthcare supply chain.” It was one of the earliest major wholesalers to invest in specialty products and services, and now has operations outside the US as well. In 2013, it struck a pioneering, 10-year deal with what was then Walgreens (soon to become Walgreens Boots Alliance) to set up a global drug-sourcing business. And in 2012, it acquired World Courier, a relatively small acquisition (in the scheme of behemoth drug-distributor affairs), but one that puts it squarely in the business of supporting pharma clinical research.
More recently, it acquired (2015) it acquired MWI Veterinary, then a leading animal health distributor, and that brought Jim Cleary, MWI’s president, into the company. This year, following an internal reorganization, Jim Cleary was appointed head of the Global Commercialization Services & Animal Health unit (the other half of the company is now known as Pharmaceutical Distribution and Global Sourcing).
Pharmaceutical Commerce sat down with Jim Cleary to find out what’s happening internally at AmerisourceBergen; here’s what he had to say.
1) First off, ABC has recently announced some new organizational structures, one of which puts you as head of the Global Commercialization Services & Animal Health business unit. Tell us about this new structure.
We recently approached and announced a new operating model that better aligns our organization—of 20,000 associates—to the shifting healthcare marketplace, our customers’ needs and improved patient access. As part of this transformation, AmerisourceBergen’s customer-facing offerings are now aligned under two groups: Pharmaceutical Distribution and Strategic Global Sourcing; and Global Commercialization Services and Animal Health. By simplifying and enhancing our operational structure, we’ve been able to approach customers in a more consolidated fashion, identify greater connectivity between businesses and enhance processes that make it easier for our customers to do business with AmerisourceBergen.
With this transition also came some immediate changes even for me as I was asked to take on an expanded role and lead the Global Commercialization and Animal Health group. It’s safe to say I was honored to be considered for this position, and incredibly excited to leverage my 20-year career in animal health, using this as an opportunity to deepen my learning on the human side—ultimately creating a more cohesive and unified experience for our customers.
As part of my current role within AmerisourceBergen, I oversee the company’s commercialization services and animal health businesses, as well as international development. Within our product commercialization services specifically, there are a number of businesses units that support this work including, World Courier, ICS, Lash Group, CenterX, Premier Source, Xcenda, Innomar Strategies and Profarma Specialty.
2) Pharma commercialization, these days, means a lot of activities around patient support services, particularly for specialty pharmaceuticals. How is ABC executing on this driver?
Every day, we strive to deliver value beyond what our customers have come to expect. As the robust specialty pipeline continues to expand and more novel, complex therapies reach the US market, we recognize the demand for a commercialization partner that can evolve and adapt at the pace of product innovation.
The emerging wave of highly valuable specialty therapies offers significant promise, but also new challenges. Cell and gene therapy innovators, in particular, face unprecedented commercialization challenges, as the unique nature of the therapies present complex hurdles across market access, logistics and reimbursement.
AmerisourceBergen has played a role in the launch and success of virtually every specialty product over the past 20 years. We have a legacy of being a partner to innovators, and so we are committed to ensuring patient access to these promising cell and gene therapies. In fact, World Courier, the global leader in specialty logistics and a part of AmerisourceBergen, helped Novartis overcome the unique logistical hurdles associated with commercializing Kymriah—the first gene therapy approved by the US Food and Drug Administration (FDA).
We strongly believe that data and technology are at the forefront of innovation in our industry—playing a vital role in the speed by which patients can access therapy. That’s why we’re making investments in technology, data management and value-creating innovations, to ensure that products always reach the right patients at the right time.
In the past year, World Courier unveiled a new packaging solution called Cocoon, which provides a high-level of thermal protection and stability for temperature-sensitive products throughout long-distance deliveries. The proprietary solution, which has been initially used for global transport of large shipments, weighs 15-to-30-percent less than comparable products and supports a wide range in temperature control requirements.
Meanwhile, our Cubixx Solutions team continues to innovate. Most recently, the team announced significant technology upgrades to their RFID inventory management solution, Cubixx, which created a more energy-efficient product with precise temperature controls. These enhancements have allowed healthcare providers and patients to more conveniently and safely store critical medications in their offices, hospitals or homes—providing the ability to monitor variables impacting inventory integrity and capturing data to drive accountability and adherence.
Our investments and innovations reflect the growing demand for constant data collection, interpretation and distribution throughout the entire supply chain—a critical factor, especially as products grow more complex and valuable.
3) Looking at patient support services generally, the life sciences industry seems to be split among those that provide the services themselves, those that work with outsourced service providers, and those that work with specialty pharmacies in limited distribution networks. Or a hybrid of some or all of these. Does ABC have a preferred approach? What guidance can you give to a manufacturer who is undecided on how to proceed?
In today’s rapidly changing, value-driven healthcare environment, pharmaceutical manufacturers’ needs continue to evolve. The path to commercialization is complex, and manufacturers must navigate new challenges as they strive to demonstrate product effectiveness, safety and value. Outsourced service providers—bolstered by the depth of their experience and expertise—offer significant value, particularly in helping manufacturers drive product success, expand access and improve patient outcomes.
Across the industry, more and more manufacturers are turning to outsourced service providers—the outsourcing market is expected to grow 7.5% annually; in part because of manufacturers’ desire to optimize costs and improve quality.
AmerisourceBergen’s strategic consultancy, Xcenda, and patient support services company, Lash Group, work with manufacturers and use more than 80 unique, end-to-end models to determine an appropriate approach—whether it’s outsourcing, keeping services in-house or a mix of both. One key element in that process—and successful commercialization in general—is starting conversations with potential partners 12 to 18 months prior to product approval and launch. The early engagement enables partners, such as an Xcenda or Lash Group, to anticipate a product’s specific needs, determine timing and work alongside manufacturers to identify which commercialization functions the manufacturers are equipped to deploy on their own and which would benefit from the expertise of outside partners.
A point we emphasize with our manufacturer clients is to approach commercialization with end goals in mind, but not preconceived notions about how to achieve them. For example, the manufacturers we work with in patient support services should have clear objectives around patient speed to therapy. But depending on the patient population, payer coverage barriers and/or other factors, AmerisourceBergen might also help the manufacturer address objectives through field reimbursement services, benefit verification solutions or even channel strategy guidance. When manufacturers are clear with their objectives and collaborative in how to achieve them, new possibilities can present themselves.
4) Patient support services are generally grouped as “hub services” (at least as an outsourced service to the industry). What are the competitive advantages of ABC’s hub services, relative to other providers?
I think the term “hub services” underplays and undervalues the essential nature of what organizations like Lash Group offer—not just to the pharmaceutical manufacturers, but also to healthcare providers and patients. Patient support services providers are not the pass through or a pivot point along the care journey; oftentimes these organizations are the ones that help all stakeholders navigate from prescription to successful outcomes. When you view patient support services through this lens, it becomes clearer how specific companies are able to set themselves apart. We’re improving patients’ lives.
Lash Group is advancing the improvement of patients’ lives with greater effectiveness. One significant way we are doing this is through the launch of Fusion—a new technology and analytics ecosystem that will underpin all of the patient support services at Lash Group. This is more than a new operating system or cloud-based platform for the organization, and it’s more than a CRM tool, a data aggregation engine or a patient communication solution. In fact, it’s all of those things—but more than that, it represents a new way of thinking for Lash Group that will help us shape the future of patient support services.
No two patients are the same, providers’ needs vary and manufacturer clients often view patient services from different perspectives. Fusion is designed to be scalable and accommodate manufacturer programs of all sizes, as well as provider and patient interactions across multiple channels. It’s collaborative, which facilitates new avenues of data sharing and manufacturer partnership. It’s adaptable for innovation, allowing us to incorporate new tools like artificial intelligence and machine learning as they become market-proven to improve patient outcomes. Millions of patients depend on Lash Group each year to remove barriers related to access, affordability and engagement. Fusion will ultimately enable us to redefine and enhance how each of those patients receives care, while helping our manufacturer clients to understand how they can serve their patients better.
5) Through its various consulting and service businesses, ABC provides pharma companies with support as drugs are in development (pre-approval). In general, what does ABC advise its manufacturer clients to do in the pre-approval phases as they prepare for patient support of the approved product?
In this age of more complex, personalized specialty medications, manufacturers need to begin thinking about patient support services earlier than ever. The link between patient access and successful outcomes has become clearer than ever. This will be especially true in cases of new classes of products, like cell and gene therapies (C>), where the level of clinical and financial complexity increases exponentially. With C> products, the patient’s cells become part of the product manufacturing process, so timing of patient sample collection and product administration is crucial. There will be some uncertainty among providers, patients and payers about how the economics of these new therapies will work, which could cause delays that will affect patient treatment. However, this is just the tip of the iceberg of reasons why we continue to advise manufacturers to think about patient support services early in the commercialization planning process.
We also encourage manufacturers and their partners to map the patient journey starting from the very beginning of the development phase. Mapping the patient journey means evaluating therapy decisions from diagnosis through treatment. Looking into the diagnostic hurdles that patients face, the physician specialists they visit, who manages treatment and ongoing care, and what resources exist are all imperative to understanding the patient’s treatment journey. This process will identify barriers to treatment and help manufacturers think through strategies to mitigate or eliminate access challenges for patients. In addition, manufacturers can identify the touch points where they can interject the most value with their new therapy.
6) There is growing concern over regulatory compliance issues around patient support, with care needing to be exercised on such issues as inducements to Medicare/Medicaid patients, patient privacy, and issues like REMS and adverse event reporting. Does ABC have a compliance function within its hub services? Does it have clients who need guidance on their own compliance practices?
We recognize the spotlight and scrutiny on regulatory compliance issues around patient support. AmerisourceBergen has a strong compliance function and presence in its hub services. While AmerisourceBergen does not provide legal advice to its clients, we collaborate with clients to ensure compliance with laws and regulations in our hub services, such as applicable FDA requirements, REMS, adverse event reporting and patient privacy.
7) I know that AmerisourceBergen made a significant investment in PharMEDium about two years ago to expand the services that the company offers to health systems. Can you provide an update on how this acquisition has progressed? Can you also elaborate on where PharMEDium fits within the overall distribution supply chain?
It’s clear that health systems are all looking for ways to improve the way they operate while continuing to raise the bar on the quality of care. That’s really what the PharMEDium acquisition was about—expanding the way AmerisourceBergen contributes to the goals of our health system customers. And during the time since the acquisition, we’ve seen what a huge contribution PharMEDium can make to the productivity, efficiency and quality of its customers. By providing ready-to-use compounded sterile preparations for commonly used products like operating room anesthesia or anticoagulants, PharMEDium frees up time for health system pharmacy staff to focus on supporting care delivery.
So in that sense, it’s quite complementary and additive to the overall distribution supply chain for health systems. Rather than compounding products on-site, health systems and surgery centers can turn to a single partner that is able to provide a wide variety of compounded products, administrative and clinical support. It all links back to AmerisourceBergen’s overarching purpose of being united in our responsibility to create healthier futures—we’re doing that here by advancing access, quality, efficiency and patient safety.
A terrific example of PharMEDium’s commitment patient access and safety is the work that was accomplished before, during and after recent natural disasters. As Hurricanes Harvey and Irma hit the US, PharMEDium’s facility redundancy became a critical need as it had the capacity and agility to shift orders to one or more of their four compounding locations after the hurricanes impacted regular shipments. AmerisourceBergen’s teams worked with hospital partners to expedite orders in advance of those storms, working with carrier partners to ensure both room temperature and temperature-controlled products would be available and remain viable once the storm hit.
8) Another by-definition part of patient support services is to track outcomes and ongoing patient condition, especially for chronic care products. This leads into the ongoing discussions around outcomes- or value-based contracting. Does ABC have a recommended approach?
Stakeholders across the healthcare industry face growing pressures to reduce spending and manage drug costs at a time when more and more groundbreaking, potentially life-saving therapies enter the market in the US.
As payers seek to avoid wasting resources on high-priced therapies that may not prove to be effective outside of a clinical trial setting, we are seeing more and more interest in outcomes-based contracts between pharmaceutical manufacturers and payers. These agreements—which, in some cases, serve as an alternative to closed formularies—help expand patient access with the products remaining on the formularies in exchange for outcomes guarantees. The contracts, which reflect the industry’s shift toward value over volume, tie product rebates and discounts to patient outcomes.
Nearly 40% of payers are looking to enter into outcomes-based risk-sharing contracts, according to an Xcenda survey that polled the payer advisors of the company’s Managed Care Network, a panel of more than 140 advisors from key payer segments that represents about 200 million covered lives. Meanwhile, 86% of the payers surveyed believe that fewer than 20% of the new products launched within the last two years have net prices that are justified by the health outcomes benefits they deliver.
However, outcomes-based contracts are not easy to administer—it takes time and resources to capture and analyze the immense amount of data necessary to determine if a drug produced the promised outcome.
As a result, it is critical to identify a partner that can generate real-world evidence and provide access to data that calculates treatment adherence, reveals healthcare resource utilization and captures patient-reported outcomes and quality of life measures.
In fact, just last year, Xcenda rolled out an enhanced suite of solutions, including value calculator tools, which are meant to help manufacturers develop strategies to demonstrate the clinical impact of products. Manufacturers can also turn to Xcenda’s HEOR experts for strategic guidance, and the generation of health economics and outcomes evidence that communicate an effective product value story.
Beyond the initial contracting, manufacturers also face a familiar challenge: ensuring patients correctly adhere to their prescription regimens. Most of the outcomes-based contracts feature adherence measures, meaning an established baseline or rate must be reached in order for the agreements to be enforced. That can be problematic considering nearly three in four adults are non-adherent to their therapy in some way.
Lash Group partners with manufacturers with the ultimate goal of improving patient outcomes. We believe that our key role is providing patient solutions that reinforce the right behaviors to help patients best manage their disease and treatment. For example, our Thumbprint Adherence solutions segment the population based on the level of their adherence and allocate the appropriate level of engagement. By eliminating barriers to adherence through patient education and outreach, employing patient-driven touchpoints and supporting patients through focused disease-state interactions, Thumbprint solutions can help slow down patient drop-off and improve patient satisfaction. Moreover, our business continually looks for ways to use processes and automation to improve time to therapy, so that patients can receive medications faster, thereby receiving the therapeutic benefits sooner.
9) What’s your personal and professional stake in patient services? What do you say to people who ask you why you do what you do?
Well, I’ve been working with manufacturers for 20 years—mostly on the animal health side until AmerisourceBergen acquired my former company, MWI Animal Health, in 2014. During that time, I established meaningful relationships with manufacturers in the animal health space, and gained insight into the unique challenges and opportunities they face. As I transitioned into my new role this June, I leveraged that knowledge and background to identify potential strategies—such as investments in technology and innovation—to bolster our support and best position AmerisourceBergen to meet manufacturers’ evolving commercialization needs.
AmerisourceBergen’s business model is built upon our customers’ success and our belief that the way to success is with relentless focus on the patient journey. Our leadership team, which, in part, has been formed through acquisitions, highlights AmerisourceBergen’s entrepreneurial culture—one that has a direct impact on patient health and outcomes. I’m proud to be a part of AmerisourceBergen and proud to be in a position to lead positive change and outcomes.