Specialty Pharmacy Distribution Systems – Where do they fit and when do they make sense?

The trickle of pharmaceutical and biotech products that require special handling is potentially going to become a flood in the future. Products that fill niche markets, have special physical handling requirements (refrigeration or overnight delivery as examples), are expensive and won’t normally be stocked at a pharmacy, products that require special insurance approval processes, etc., are leading a trend to specialized distribution. We call this group SPD’s (Specialty Pharmacy Distributors).

What do SPD’s do?

• They normally dispense, via FedEx or UPS, medications for overnight or second day delivery. They have special handling experience for refrigerated or highly perishable medications. They may also provide special support services for infusion, patient care, etc. They are highly knowledgeable in the diseases they support. They are also experts at dealing with payers, handling billing issues, working with patients who have co-payment issues, PA (Prior Authorization) challenges and more.

What’s the value of a SPD vs. a retail pharmacy?

• Both are licensed
• The SPD’s may have more ongoing experience dealing with payers in niche arena’s where special arrangements on handling, pricing, contrating, etc., are required
• The knowledge base of an SPD may be greater because they deal with unusual diseases on a daily basis and are more familiar with potential needs and challenges
• The SPD will stock, for the medications and diseases they support, drugs on-hand and thus be able to deliver rapidly
• SPD’s also allow a manufacturer to control inventories by limited access to select sites vs. having drug in multiple wholesalers and retailers

When does an SPD make sense?

• Special handling requirements
• Pricing, contracting and PA issues
• Co-payment challenges
• Special patient support needs

Understanding your product, the competition, patient support needs, special handling requirements, pricing, contracting and inventory control are only some of the issues you may need to address.

We have experience in creating specialty distribution systems, contracts and relationships in several different Orphan Diseases. Give us a call to see if and how we can help you assess your need (or not) for Specialty Distribution.