A channel strategy is a plan for guiding decisions about a product’s distribution channel, ie the chain of intermediaries that it passes from its production through to delivery to the end user. While channel strategy is not a ‘routine’ business challenge in pharma, either in-market or preparing for launch, it is nevertheless a key one – and one which is particularly relevant for orphan drugs, rare diseases or specialty medicines trying to get to a small number of patients.
A channel strategy that provides a systematic, well thought-through and integrated approach to these elements, will consider channel components as a whole, as well as thinking through how they link to achieve an end goal.
Focusing on the needs of a European brand director, this feature looks at how the complex mix of services, product and sales channel information he is faced with should be managed most effectively to achieve success.
Orphan drug and rare diseases, and to a lesser but no less important extent specialty medicines, by their very definition only serve the needs of a limited number of patients. As such, getting the right drug to the right patient at the right time is by no means simple.
Channels in the age of outcomes
Many of these rare and complex conditions are treated by a few, very specialised and experienced clinicians based in a hospital or dedicated clinic setting. As a consequence the number of distribution points is limited, making the physical task of distribution fairly simple. However, in many cases this is not just about the supply of the molecule. Complex and rare diseases managed by hospital or clinic based specialists but used by patients in their home setting raise a whole new set of challenges, particularly when we need to consider the increasing desire to reduce hospital-based interventions due to cost.
Also, clinicians, and perhaps more importantly payers, are becoming increasingly concerned about delivering cost-effective outcomes. With expensive orphan or specialty medicines the acquisition cost is high, which in itself represents a huge hurdle to overcome in many European markets. In fact, some countries cannot afford the medicine and are therefore never going to be targets. In others the number of patients is so small that it is uneconomic to consider them, except perhaps on a ‘named’ patient basis only.
For those markets where the drug is available pharma companies will increasingly be required to help ensure ‘outcomes’ rather than just supply, and that is a whole different ‘channel strategy’ challenge, particularly for rare diseases.
At this stage it might be sensible to further refine what we mean by ‘channel strategy’. Traditionally the term has been applied to the pure distribution of product to the end user (think: fast-moving consumer goods). So for pharmaceuticals it has all been about the ‘supply chain’ – making sure there is a consistent and timely supply of products.
There is no doubt that ‘homecare’ teams play a vital role in managing the use of these expensive medicines
But with the increasing focus on ‘outcomes’ suddenly ‘channel’ takes on a much broader meaning. What we are not talking about here is the whole process of getting the right medicine to the right patient at the right time and in the right way for the optimal period of treatment. Logistics is the easy part in this day and age of next day/just-in-time delivery.
Traditionally, pharma companies have tried to maximise the number and spread of clinicians using their product. This works effectively for the major conditions with large numbers of patients being treated by general hospitals and specialists across Europe. However, this is less appropriate and even potentially damaging for rare or orphan diseases.
For these complex conditions, the wrong drug in the wrong hands is potentially going to produce a poor outcome, which could have a negative impact on the overall ‘value’ perception of the molecule; if it doesn’t work (well) then it can hardly be ‘cost effective’. As ever, you would not need many of those to create a negative perception around your very expensive product.
Of course, many of these rare or orphan diseases are life-threatening or life-shortening conditions. That’s understood. However, notwithstanding that, if the drug is not seen to have a positive effect on outcome there will come a moment when its use will be challenged, perhaps only at a local level, but challenged it will be.
We therefore need to make sure our drug is being used by the right people. This may entail restricting supply to specialist centres which on the surface may seem counter-productive. However, if we can ensure the right support for these centres, so that clinicians know which patients are best suited to the treatment, how to use the medicine effectively, what is required to manage the patient (particularly in the community, with all the necessary infrastructure around that), then we can start to see the potential to improve the ‘cost-effectiveness’ of our molecule.
However, if we restrict distribution then we need to make certain there is an effective means of the patients getting to the right treatment centres. The more ‘general’ physicians who are likely to see the patient initially need to understand where to find and how to communicate with the appropriate specialist centre.
Patient training and support
This may seem complicated and a bit of a step too far for the supplier of a rare or orphan drug but in our experience facilitating the effective routeing of patients to the specialist centres really pays dividends. When it comes to looking at ‘channel strategy’ as a whole, we need to consider further practical aspects and steps to ensuring effective outcomes.
Let’s take as an example self-administered orphan drugs. We are all familiar with the example of the world’s largest drug Humira and its self-administration ‘pen’. However, even that requires a level of training, support and supply that is beyond the norm; home delivery is common in a number of markets in Europe. In spite of this, we know that adherence to Humira, even with a seemingly simple delivery system, is not perfect by any means; the drug that is not taken is the most expensive one, after all …
If the administration route is more complex than Humira’s self-administration pen, there are going to be substantial challenges in ensuring the product is used correctly. Patients (and carers) are going to need training on how to self-administer. As we know from experience, training is generally done most effectively by nurses as they are often more familiar with the practical aspects of drug delivery and as a prime interface (in most but not all markets in Europe; Italy is an exception), they appear to be the best suited to help patients in the preliminary stages.
Initial training is important, but so is sustained support, particularly for the more vulnerable patients. For many of those patients or in acute situations the best solution is contact with a healthcare professional. This can take the form of telephone help-lines, which have been proven to be very cost-effective in a number of chronic conditions, eg in ulcerative colitis (not a rare condition I accept) this approach has been shown to produce savings of £175,000 per nurse in the UK. However, there is no substitute for person-to-person contact.
In some orphan diseases this is provided by specialist ‘homecare’ teams who maintain contact with the relatively few patients, provide the regular supplies they need and are able to undertake home visits at relatively short notice if required. Speaking to specialists there is no doubt that these ‘homecare’ teams play a vital and supplementary role in managing the proper and effective use of these expensive medicines. In some cases they give carers the confidence that they are doing the right things and doing them right, which in itself contributes hugely to better outcomes.
In summary, ‘channel strategy’ is evolving and becoming more complex. With the shift from acquiring medicines to delivering cost-effective outcomes more focus is falling on using the right drug in the right patient at the right time and in the right way for the optimal period of treatment. For expensive orphan, rare disease, and to a lesser extent speciality, medicines ensuring this will become an increasing part of ‘channel strategy’ in the future.
Restricting distribution and use to the right centres which have the necessary requirements to select, treat and support the right patients will be key. Providing the infrastructure around that will become part of the whole ‘package’ that pharma companies will be expected to provide if their medicines are to gain local approval and the appropriate funding and critically, helping ensure patients in the community setting are provided with the necessary support will become an increasing part of the mix.
