Trade & Channel Strategies 2024: Navigating Pharma and Its Distribution Models
A case study explores a way to potentially transform commercial organizations, while driving revenue growth.
Trade & Channel Strategies carried on, with a case study on how to “Navigate Pharmacy and Distribution Models for Market Access Mastery.” John Harlow, chief commercial officer at Melinta Therapeutics, offered perspective on ways to transform commercial organizations and drive revenue growth; how to effectively manage costs when it comes to specialty models; and the value of partnerships in terms of strategic planning and brand development.
Melinta Therapeutics, a pharmaceutical company that provides therapies for acute and life-threatening illnesses, was using what is known as a traditional, full-line wholesale (FLW) distribution model, which, created a complex and inefficient acute care system, was costly for smaller companies, and was unpredictable for HCPs and patients.
Harlow also shared other general challenges surrounding the FLW distribution model, dividing them into three buckets:
1. System inefficiencies
Significant wholesaler fees created financial strain for the smaller companies; there was a rise in operational inefficiencies, combined with high manual intervention; and rising costs made the system unstainable.
2. How it affects hospitals
There were either stock-outs or what was believed to be a limited supply, along with an interruption in access to critical therapies; the variation in demand could not be met; and hospital buyers and sales teams became discouraged by laborious procedures.
3. How it affects patients
Care was impacted because of the delay in access to necessary therapies, while system failures jeopardized care quality and patient outcomes. At the end of the day, Harlow noted, “our challenge and our mission as an organization is to always put patients first. Profitability is important, but we would never do it at the expense of patients.”
By transitioning to specialty distribution, there was centralized inventory in fewer distribution centers and improved control over stocking and availability. There was also collaboration with major specialty distributors in the process.
Operationally, Melinta received nationwide hospital access within the day. In fact, by streamlining operations, wholesaler fees were lowered, while communication and response times rose.
So how does this impact patient care? As referenced previously in regard to delays, this is no longer the case. There is now consistent access, while the issues of delays and/or shortages were handled.
Of course, putting this plan in motion is easier said than done. In order to stay on track, such a feat involved not only designing a clear timeline, but making sure that critical therapies were given precedence. Then, it was a matter of teaming up specialty distribution partners.
Having flexibility throughout this process is also important to keep in mind. With this mindset, one can be prepared for unexpected issues that arise, and you’re able to modify the plan accordingly.
“Flexibility and execution is key. Hopefully you get that as a key takeaway,” said Harlow. “Someone once told me that you don't want to be flexible on the outcome, but you want to be flexible on the process, and I think that was a critical learning for us as an organization, myself, and my team, to say, hey, look, it's good. Let's not rush it. Let's do it right. You have to prepare for unforeseen challenges.”
Reference
Harlow J. Navigate Pharmacy and Distribution Models for Market Access Mastery. December 10, 2024. Trade & Channel Strategies, Philadelphia. https://informaconnect.com/trade-channel/
