Telehealth is Redefining Health Care—for Patients, Prescribers, and Drug Makers Alike

Telehealth is Redefining Health Care—for Patients, Prescribers, and Drug Makers Alike

The face of health care looks very different these days. With the spread of the COVID-19 pandemic came the need for social distancing, which meant that, for all but the most urgent cases, face-to-face visits between patients and physicians were no longer possible.

Enter the rise of telehealth (or telemedicine, depending on your preference; we’ll touch on the distinction below).

Telehealth technologies have been a staple of the medical community for years, but the coronavirus crisis has boosted their usage industry-wide in ways that simply could not have been predicted. Nearly half of all doctors are now using telehealth to treat patients, up from just 18 percent two years ago, according to a recent survey of American physicians.

The rise of telehealth adoption by both providers and patients has triggered changes in everything from regulatory compliance, privacy & security, reimbursement policies, and insurance coverage. The efficiencies and access made possible by the acceptance of telehealth technologies are akin to those in the new stay-at-home, Zoom-powered workforce.

Both developments are likely to change the way the world operates post-COVID-19. The question is, how? And what do these changes mean for pharmaceutical manufacturers? In what follows, we’ll take a look at the answers to these questions and more, starting with the most basic.

What is Telehealth?

So, what exactly do we mean by telehealth? And how is it different than telemedicine? The Health Resources Services Administration defines telehealth as follows:

The use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health and health administration. Technologies include videoconferencing, the internet, store-and-forward imaging, streaming media, and terrestrial and wireless communications.

Telehealth is different than telemedicine in that the former refers to a broader scope of remote healthcare services. Telemedicine refers specifically to clinical services provided remotely, while telehealth includes non-clinical services like provider training, administrative meetings, and continuing medical education.

The Rise of Telehealth in the COVID-19 Crisis

The need for telehealth technologies quickly became evident as social distancing guidelines arose in response to the coronavirus outbreak. The World Economic Forum called telehealth a “game-changer” for safely delivering much-needed clinical care during the pandemic.

The Health & Human Services Office for Civil Rights went on to issue guidance that made HIPAA regulations more flexible when it came to telehealth, saying “HIPAA-covered health care providers may, in good faith, provide telehealth services to patients using remote communication technologies…even if the application does not fully comply with HIPAA rules.”

Telehealth is helping medical systems and private practices alike respond to increases in patient flow and demands for testing, as well as the limited supply of personal protective equipment (PPE).

Virtual triage via telehealth technology means that only the sickest patients actually visit a hospital or clinic. Fewer in-person patient visits means fewer needs for providers to change their PPEs.

Additionally, providers are experiencing unprecedented levels of physician burnout and are embracing telehealth as a way to more effectively manage their on-call availability and balance their lifestyle.

Telehealth is helping medical systems and private practices alike respond to increases in patient flow and demands for testing, as well as the limited supply of personal protective equipment (PPE).

Whether through video or audio visits, providers are able to address a number of patient concerns using telehealth technology. This limits the number of patients that physicians physically interact with, while also reducing the exposure of patients themselves to other patients and facility equipment, greatly reducing the risk of exposure to coronavirus for all parties involved.

Telehealth has also proven instrumental in managing those who are concerned they might have contracted COVID-19 but are asymptomatic and seeking testing for the disease.

Rather than physically visiting a clinic or hospital and risking exposure to the novel coronavirus, asymptomatic patients (which are conservatively estimated to be up to 30% of the population) can speak to a health care provider via videoconference or by phone to arrange for testing.

A quick call with their provider is often enough to reassure patients that they are healthy and safe, and also represents an ideal opportunity for providers to remind patients about important preventive measures like handwashing, mask-wearing, and social distancing.

Public and Private Insurers Expanding Telehealth Coverage

In addition to making HIPAA regulations more flexible, the federal government has loosened requirements on e-prescribing of controlled substances, and opened up Medicare restrictions on telehealth as well. Both Medicaid and Children’s Health Insurance Programs (CHIP) were expanded to include broader coverage for telehealth services.

In April, the Trump Administration released a toolkit providing states with issues to consider as they expand their telehealth capabilities and coverage policies. Many state governments have expanded telehealth in their Medicaid programs and relaxed restrictions around provider licensing, online prescribing, and written consent.

Many states are also requiring private insurance plans to cover and reimburse for telemedicine services in the same way they would in-person care.

Even where not mandated by states, several major health insurance companies have voluntarily expanded telehealth coverage, including more services, patient locations (e.g. home) and modalities (e.g. phone). Other insurers are reducing or eliminating cost sharing for telemedicine; for some plans this applies only to COVID-19-related visits, while for others it applies to any health indication.

To make these services more accessible, some insurers are increasing the numbers of in-network telehealth providers, while others are contracting with telehealth vendors.

The Intersection of Telehealth and Digital Health

A successful patient visit to the providers office is dependent upon the measurement of vital signs and, in some cases, tests being conducted. The effectiveness and quality of care provided via telehealth also depends on these critical in-office tasks.

Rivaling the explosion of telehealth, digital health is experiencing its own dramatic growth in its ability to enable remote monitoring and testing. Real-time blood pressure readings, glucose measurement, medication compliance, weight, and cardiovascular performance can now be captured on both wearables and in-home devices.

Increasingly telehealth services are offering integrations into digital health, thereby enabling more timely and efficient quality care.

Telehealth and 5G

If the coronavirus pandemic has been the catalyst to jumpstarting adoption of telehealth technologies, 5G will be the fuel that catapults it into the future.

Critical to any telehealth technology is a network that can support high-quality video in real time. To date, this has mostly meant wired networks. The coming 5G revolution, which promises mobile data speeds that far outperform the fastest home broadband currently available to consumers, will mean that telehealth can be delivered anywhere to anyone.

5G will mean that patients can be treated sooner and get access to specialists currently not available to them. It will also allow doctors and other staff members to collaborate more efficiently.

According to a recent op-ed co-authored by the president of the New York State healthcare association and president of the New York State Medical Society:

“5G…will not only advance telemedicine — it will transform the future delivery of healthcare and every aspect of modern life, from basic interpersonal and business communication to transportation, economic development and education.”

With 5G, patients will be able to use a wide array of devices at home to real-time data to their physicians, including blood pressure, weight, glucose levels, and more. Physicians, in turn, will be able to quickly and securely download and transfer large data files like X-rays, CT scans, and MRIs, reducing wait times and allowing for the delivery of faster, more comprehensive patient care.

5G will also make emergency medicine more effective and efficient, saving countless lives in the process. First responders will be able to pinpoint locations more quickly and communicate optimal treatment to hospital staff via video conferencing during transit, significantly improving emergency room outcomes.

Telehealth and Direct-to-Patient

For pharmaceutical manufacturers looking to streamline the supply chain and reach patients directly, telehealth is a valuable tool.

Direct-to-patient (DTP) channels leverage e-commerce technology, anticipatory pharmacy services, and fulfillment solutions that include innovative final-mile technology. Add e-prescribing services to the front of this solution and patients can get the brand medication of their choice delivered direct to their doorstep without ever having to leave home.

When telehealth services are built into an e-commerce DTP channel, patients have the option of being seen by a physician as a seamless part of their visit to a pharmaceutical brand’s website.

Via embedded videoconferencing technology, a physician can diagnose the patient after a brief consult and prescribe the medication they need all within the same online experience. A short registration and purchase sequence later and the patient need only wait for the product to be delivered to their home.

For patients, prescribers, and pharmaceutical manufacturers alike, the future of medicine is telehealth. Now that it has redefined health care in the COVID-19 age, bolstered by digital health and 5G technology, telehealth is poised to bring manufacturers closer to patients in ways previously thought unimaginable.

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

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The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

Listen: Healthcare Logistics in the Age of Coronavirus

Listen: Healthcare Logistics in the Age of Coronavirus

The coronavirus pandemic has brought unprecedented changes to every aspect of our modern lives. The closures of businesses and schools have resulted in profound anxieties for the everyday American, but for those in the healthcare industry, the challenges are infinitely more complex. At the heart of these challenges is healthcare logistics.

The demand for healthcare supplies and medicines has never been more vast, immediate, or widespread. The country’s response to the pandemic—and indeed the lives of many thousands of Americans—depends on the ability of transportation and logistics companies to get lifesaving provisions to the hospitals, clinics, and other frontline providers who need them, as quickly and efficiently as possible.

In this informative episode of UPS’s Longitudes Radio podcast, Medvantx CEO Rob Feeney sits down with UPS Healthcare President Wes Wheeler to discuss the impact that coronavirus and “black swan” events like it have on the global supply chain.

Healthcare logistics experts with decades of experience between them, Feeney and Wheeler answer questions including:

  • How do we ensure the delivery of healthcare supplies to those who need them most?
  • What strategies should be implemented to expedite coronavirus testing?
  • How is telemedicine meeting the needs of a “shelter in place” society?
  • What lessons from previous pandemics are logisticians tapping into today?

The global healthcare supply chain is complex and highly interdependent, making the challenges of the coronavirus pandemic particularly vexing. Modern technology including direct-to-patient channels and enhanced cold chain solutions have moved healthcare logistics from reactive to proactive, leveraging innovations including AI and machine learning to anticipate needs before they arise.

Wheeler and Feeney look at UPS Healthcare’s visibility, tracking, and management of critical healthcare shipments, and how its partnership with Medvantx is driving direct-to-patient solutions and in-home treatment in the new era of medicine.

With the development of coronavirus vaccines and treatments on an unprecedented fast track, healthcare logistics will be key to world’s evolving response to a crisis of truly historic proportions.

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

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The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

The Cost of Prescription Abandonment and Non-Adherence

The Cost of Prescription Abandonment and Non-Adherence

Nearly two-thirds of Americans have a prescription for medication. Unfortunately, about half of them don’t take their medications as prescribed.

The problem of prescription abandonment and non-adherence is well known to those in the pharmaceutical industry, but their hard costs to the industry and the healthcare system at large often go overlooked.

The question is, why do so many Americans find it so difficult to fill and take their medications as prescribed? How much do prescription abandonment and non-adherence cost, when all is said and done? And is there a solution to the problem?

In what follows, we take a look at the answers to these questions and explore how direct-to-patient channels can improve prescription abandonment and adherence, leading to better outcomes for patients and increased sales for manufacturers.

Prescription Abandonment

The phenomenon of patients receiving prescriptions from their doctor but never filling them continues to rise. Studies have consistently shown that up to 30 percent of medication prescriptions are never filled by patients.

When it comes to patients with chronic, life-threatening conditions, abandonment is even worse. Research shows that nearly 37 percent of prescriptions written for chronic conditions go unfilled.

The costs of prescription non-adherence are staggering. They result in nearly $300 billion in avoidable health care costs and 125,000 potentially avoidable deaths. It’s a huge amount of unnecessary physical and emotional suffering, financial loss, and premature deaths.

While many factors contribute to these statistics, one of the leading reasons for prescription abandonment is the out-of-pocket cost of medications.

In a survey of 1,000 patients, fully 75 percent received a prescription that ended up costing more than they expected it would. Half of these patients ultimately decided not to fill the prescription because it cost too much when they arrived at the pharmacy.

The research shows that patients are more likely to abandon their prescriptions when cost sharing rises.

69 percent of patients who were commercially insured did not fill their prescriptions when they had to pay more than $250 out of pocket. By comparison, when their out-of-pocket costs were less than $30, only 11 percent of patients abandoned their prescriptions at the pharmacy.

Other analysis found that those patients who did abandon a prescription usually don’t go on to fill a prescription within three months, meaning they’re not opting for lower-cost medications, but simply failing to start their prescribed treatment altogether.

Prescription Non-Adherence

The problem doesn’t stop with patients abandoning prescriptions at the pharmacy. Those who do fill their prescriptions typically take only about half the prescribed doses—whether it’s for a simple infection or a life-threatening disease. Other non-adherence statistics include:

  • Nearly 50 percent of patients with a prescription for a chronic condition like cardiovascular disease stop taking it within the first year.
  • 1 in 5 Medicare patients are readmitted to the hospital within 30 days of being discharged, and half of these are due to non-adherence.
  • Somewhere between 40 and 60 percent of mentally ill patients take their medication infrequently or not at all.

The research shows that improvement in non-adherence leads to measurable savings in healthcare costs. For every 10 percent improvement in medication adherence, healthcare costs are reduced by up to 29%. Another study showed that every 1 percent improvement in adherence can save about $50 in healthcare spending.

Patients with chronic conditions like hypertension or diabetes who took their medications as prescribed saved an average of between $4,000 and $8,000 per year on healthcare costs.

How Direct-to-Patient Can Help

As we’ve seen, prescription abandonment can largely be attributed to the cost of medication. Sticker shock is increasingly common for patients picking up their medications.

Compounding the problem is the rapidly increasing patient cost sharing for brand medications. Increased use of deductibles and coinsurance in the commercial market mean that patients are responsible for a higher percentage of the cost of treatment than in years past.

There are two ways the impact of cost on prescription abandonment can be mitigated. First is reducing the out-of-pocket costs themselves. Second is increasing pricing transparency for providers and patients at the prescribing stage of the process.

Direct-to-patient channels offer practical solutions to both of these approaches. By eliminating the byzantine complexity and inconvenience of legacy pharmacy channels, direct-to-patient offers ways to reduce the real costs of medications themselves.

And by allowing pharmaceutical manufacturers to set fixed, transparent costs of their brand drugs, direct-to-patient channels give providers and patients access to the true cost of medications at the point of prescription, without the unknown variables of deductibles and co-pays.

Fueled by the convenience of e-commerce, final-mile solutions, and home delivery, direct-to-patient channels eliminate the hassle and mitigate the cost of the traditional supply chain, addressing the problem of abandonment and adherence at its root.

Direct-to-patient offers patients the same prescriptions they used to get by way of a complex and inconvenient process through a branded customer experience meticulously designed for utmost convenience, efficiency, and speed.

Smart checkout technology and easy payment options are optimized for mobile, enabling patients to fill their prescriptions on the go, while custom packaging ensures patient delight the moment their medication arrives, fostering brand loyalty. Automated refills delivered directly to patients’ homes cut down on the current problem of refills going unfilled, while providing a recurring revenue stream for manufacturers.

Research has shown that 68 percent of physicians are interested in receiving notices if patients become non-adherent. The automated and anticipatory pharmacy technology that is central to a comprehensive direct-to-patient platform has the capability of doing just that, keeping doctors informed of patient behavior.

The convenience, efficiency, and transparency of direct-to-patient channels address many of the systemic problems within the traditional pharmacy process that lead to so many patients abandoning their prescriptions and/or not taking them as prescribed.

As more and more patients fill their prescriptions online, direct-to-patient has the potential to improve patient outcomes and measurably cut the significant costs of prescription abandonment and non-adherence to the pharmaceutical industry and the healthcare system at large.

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

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The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

Why Brands are Leaving Amazon (And What it Means for Drug Companies)

Why Brands are Leaving Amazon (And What it Means for Drug Companies)

Nike has called it quits with Amazon. Effective November 2019, the athletic giant said it will no longer sell its products on the world’s largest e-commerce website. Thus ended a pilot program started in 2017 wherein Nike acted as a wholesaler to Amazon, instead of just allowing third-party merchants to sell its products on the site. In a statement, Nike said:

“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail. We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”

Wow. Nike’s estimated annual sales on Amazon amounted to almost $3.3B in 2019, or 30% of its global revenues. And Nike isn’t alone in its decision to part ways with Amazon. The growing list of brands breaking ties with Bezos and company includes Ikea, Birkenstock, Ralph Lauren, Rolex, Louis Vuitton, Patagonia, and North Face. It looks like a new megatrend has started.

So, why are all of these global brands deciding to leave Amazon? And what does it mean for pharmaceutical manufacturers in the new era of digital pharmacy where Amazon is set to be a major player?

Let’s take a closer look.

The Amazon Exodus

Until recently, most major retail brands depended on Amazon to sell online. As the largest online marketplace, Amazon makes up more than half of all online sales in the U.S.

Of interest, the majority of products listed on Amazon are not actually Amazon products. Rather, they come from third-party sellers, who pay a fee to stock Amazon’s shelves with their products.

In 2007, only 26% of the products that were sold on Amazon came from third-party sellers. Today, that figure has doubled, as more than half of all Amazon products are from third-party sellers.

Nike’s ostensible move toward “more direct, personal relationships” with its customers is one reason it left Amazon. But it’s certainly not the whole story.

Brands have long complained that Amazon isn’t doing enough to curtail the widespread problem of counterfeit products available on its site. A marketplace awash in cheap knockoffs of their products is not a place where brands are highly incentivized to sell. In fact, Amazon has a history of helping generic products become category leaders only to be replaced by the Amazon brand once successful.

Beyond the counterfeit problem, though, is Amazon’s strict control over branding, merchandising models, pricing and data. The inability of companies to control their brand and dictate their own prices on Amazon can commoditize the value of their products in the wider global marketplace. The consumer is trained to see Amazon and not the actual manufacturer product’s brand.

Another glaring problem for retailers who sell through the Amazon marketplace is that Amazon maintains a stranglehold on all of their customer data.

Regardless of whether brands use Fulfillment by Amazon (FBA) or not, they are still ultimately responsible for customer satisfaction, despite the fact that Amazon essentially owns the customer relationship.

Ultimately, the downsides of selling on Amazon have begun to outweigh the benefits for a growing number of the world’s top brands.

The question is, what does the growing Amazon exodus mean for pharmaceutical manufacturers?

Drug companies will soon be faced with the same decision that brands like Nike and Ikea have had to make: sell their products on Amazon or develop independent online channels to reach customers directly?

Let’s look at what each of these options entails.

Amazon Pharmacy

With its acquisition of PillPack in 2018, Amazon now has pharmacy licenses in all 50 U.S. states. And no fewer than 85% of Amazon Prime’s 100 million members say they’re ready to start filling their prescriptions on Amazon.

Amazon’s access to all of that consumer data has the potential to fundamentally change the pharmacy industry. In the coming decade, the Prime algorithm could replace PBMs and retailers altogether. Hyper-targeted marketing based on a prescription history could redraw the boundaries of patient privacy.

Amazon’s algorithmic approach has a tendency to commoditize the brands in the industries it enters. In the wake of the now-familiar Amazon Effect, brands are incentivized to cut costs in a race to the bottom.

Generic alternatives make the pharmaceutical marketplace particularly ripe for an extreme version of the commoditization inherent to the Amazon Effect. In the Amazon model, pharmaceutical brands risk losing the brand equity they’ve spent billions of dollars to build over the lifespan of each brand franchise.

A Move Toward Independence

The list of companies leaving Amazon doesn’t end with large global retail brands like Nike and North Face. Smaller mom-and-pop brands are joining the exodus as well, thanks to a growing crop of services that lets them run independent online stores with many of the same features as Amazon.

Retailers today can farm out every step of the online store process—from shipping to returns and even one-day delivery. Services like Shopify, Stripe, Returnly, ShipBob and DarkStore are freeing retailers from the clutches of Amazon.

Pharmaceutical brands have similar options when it comes to determining their fate in the Amazon era of online pharmacy. A growing number of direct-to-patient (DTP) providers are giving manufacturers independent ways to engage patients directly.

Direct-to-patient is a fundamentally different approach to the traditional pharmacy supply chain. The traditional supply chain is rife with complexities, intermediaries, and inefficiencies. DTP collapses the supply chain and connect with patients directly—without the need for costly and inefficient middlemen.

In addition to giving drug companies independent ways to avoid the commoditization of Amazon and retain valuable patient data, direct-to-patient also offers solutions to two of the most existential threats that any pharmaceutical brand has to face: loss of exclusivity (LOE) and PBM formulary exclusion.

By giving manufacturers an independent way to connect with patients directly, direct-to-patient ensures that patients continue to have access to the brand drugs they know and trust, even when those drugs lose their patents or are blocked by formularies.

Not all direct-to-patient brands are created equal, however. When selecting a DTP partner, pharmaceutical manufacturers are advised to look closely at which offer proven, scalable platforms complete with pharmacy licensure and robust logistics, and which are just e-commerce telehealth providers.

The Future of Pharmacy

As pharmacy moves inexorably towards a future in which every stage of the patient journey will transpire online—a future dominated by Amazon’s presence in the industry—pharmaceutical manufacturers have a choice to make.

Accept their fate as just another commoditized product in the Amazon marketplace, competing against Amazon-brand generics at Amazon-brand prices, or secure an independent future where they can continue to leverage the brand equity they’ve built investing billions of dollars into each of their brand franchises?

The former scenario will be the future for drug companies who don’t secure independent ways to connect with patients directly. The latter will be the reality for pharmaceutical brands who invest in direct-to-patient channels, especially those that include dedicated e-commerce websites, anticipatory pharmacy services, and innovative final-mile delivery.

Specifically designed to bolster patient choice and enhance patient experience, direct-to-patient is how tomorrow’s pharmaceutical brands will connect with the patients who need them: efficiently, personally, directly.

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

LEARN MORE

The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

Direct-to-Patient Brands: A Side-by-Side Comparison

Direct-to-Patient Brands: A Side-by-Side Comparison

As the frictionless economy defined by brands like Uber, Postmates, and Amazon continues its advance into every corner of the consumer experience, more and more patients are filling their prescriptions online.

In 2014, the global online pharmacy market was estimated to be worth roughly $29 billion. By 2023, it’s predicted the market will reach around $128 billion. It should come as no surprise, then, that it feels like a new direct-to-patient (DTP) pharmacy program emerges every week.

Telehealth companies like Hims, Roman, and Nurx are cashing in on pharmacy’s entry into the frictionless economy with smartly designed e-commerce websites featuring streamlined user experiences.

Online physician consults and customer service chat bot capabilities remove the friction of awkward doctors’ visits, while slick, private equity-backed marketing campaigns and custom-branded packaging create a personalized patient experience.

Many of these brands are breathing new life into multi-source generics by rebranding them under their own name. Others focus on specific disease states or offer digital versions of the traditional pharmacy experience.

Still others are B2B models, playing a supporting role for the more consumer-facing brands or, in unique cases like Medvantx, offering an integrated, comprehensive model that caters directly to pharmaceutical manufacturers themselves.

Of course, any survey of the direct-to-patient landscape would be woefully incomplete without a mention of the proverbial elephant in the room. With its acquisition of PillPack—and the company’s pharmacy licensure in all 50 U.S. states — Amazon has laid the groundwork for a DTP prescription marketplace that has the potential to redefine pharmacy marketing and retail entirely.

So, what does the wide-ranging current crop of direct-to-patient brands mean for pharmaceutical manufacturers? Each represents either a unique threat or an imminent opportunity for drug companies, as the consumer landscape continues to be redefined by the frictionless economy.

To help, we’ve compiled a side-by-side comparison of some of the nation’s top DTP brands, looking at a range of critical attributes and offerings.

When looking for partners to help design, develop, and execute their direct-to-patient strategies, manufacturers are advised to look closely at which companies offer proven, scalable pharmacy platforms and licensure and which are just e-commerce telehealth providers.

Some direct-to-patient brands have retail pharmacies in addition to online prescription fulfillment capabilities. Some have robust logistics platforms, including final-mile home delivery.

Noteworthy also is accreditation as a Verified Internet Pharmacy Practice Site (VIPPS) by the National Association of Boards of Pharmacy (NABP), which confirms pharmacies as meeting strict standards of compliance and security.

The Direct-to-Patient Competitive Grid

Direct-to-patient platforms give manufacturers powerful ways to leverage brand loyalty, compete against the rise of rebranded generics, and avoid the commoditization of the forthcoming Amazon prescription marketplace.

But it’s clear that not all DTP brands are the same.

By partnering with the right direct-to-patient platform, manufacturers can bypass legacy channels, avoid the hassles of formulary exclusion, and reach patients upstream of competing platforms, with a personalized experience centered on convenience and patient delight.

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

LEARN MORE

The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

Why Invest in Direct-to-Patient?

Why Invest in Direct-to-Patient?

The pharmaceutical industry is changing by the minute. Regulations and restrictions are constantly evolving, generics await the expiration of every patent, and with its purchase of PillPack (and its pharmacy licenses in all 50 US states), Amazon has officially entered the industry.

These industry changes are largely driven by two paradigmatic shifts. The first is the healthcare industry’s move to more patient-centric models of care. Patients today have more choice than ever and value-based care means that patient satisfaction and health outcomes matter. The second shift at hand is the larger consumer marketplace transition to a frictionless economy.

Consumers today expect nothing less than a frictionless experience. The time it takes to realize a need, find a product to fulfill that need, and purchase that product has been reduced to seconds. The subsequent time it takes to have that product materialize on one’s doorstep without ever leaving home is now measured in minutes. Any area of friction within the customer journey risks the customer going elsewhere for their purchase.

The frictionless economy is a generational shift that will define the buying practices of tomorrow’s customers. The trend is only going to accelerate in the years to come. How can pharmaceutical manufacturers hope to survive in a new era of pharmacy where patients expect their prescriptions to be filled and delivered direct to their home in just hours? With independent direct-to-patient solutions.

Direct-to-patient is how tomorrow’s pharmaceutical brands will connect with the patients who need their medications. Efficiently, immediately, personally. Let’s take a look at what a direct-to-patient platform includes and why manufacturers would be wise to invest in one.

What is Direct-to-Patient?

The traditional pharmacy supply chain is rife with complexities, intermediaries, and inefficiencies. From loss of exclusivity to formulary exclusion, pharmaceutical manufacturers are subject to the whims of forces beyond their control when trying to get their products into the hands of patients who need them.

Direct-to-patient (DTP) offers manufacturers an alternative to the traditional supply chain. Leveraging e-commerce technology, anticipatory pharmacy services, and fulfillment solutions that include innovative final-mile technology, DTP collapses the supply chain and enables manufacturers to connect with patients directly.

These three components—e-commerce, pharmacy, and fulfillment—are the foundation of a direct-to-patient platform. When fully integrated and powered by the right logistics partner, they can give manufacturers the power to reach patients anywhere in just hours.

1. E-Commerce

E-commerce solutions include everything from strategic marketing that builds product awareness to UX-driven websites that maximize conversion. These elements are designed to boost brand awareness and amplify customer engagement with powerful strategies dedicated to online sales.

2. Pharmacy

Pharmacy services are an essential part of any direct-to-patient platform. They enable you to streamline patient engagement, reimbursement, and reporting with nationwide reach. Fully automated and streamlined by anticipatory logistics, direct-to-patient pharmacy services are an alternative to the fragmented and overly complex traditional pharmacy process.

3. Fulfillment

The final piece to the direct-to-patient puzzle is fulfillment. A fully integrated component of a direct-to-patient platform, fulfillment solutions give manufacturers the power to reach patients faster with anticipatory logistics, home delivery, and final mile services.

Why Invest in Direct-to-Patient?

From reaching patients faster and more efficiently to overcoming the challenges of loss of exclusivity or an NDC block, there’s no shortage of reasons why direct-to-patient is a great investment for pharmaceutical manufacturers. Let’s look a little more closely at some of DTP’s most valuable benefits.

A direct-to-patient program can help you…

Reach Patients Faster

A dedicated direct-to-patient platform lets you reach more patients faster and grow your market share. By taking control over the supply chain and eliminating costly and inefficient middlemen, DTP can help you get products into patients’ hands in a quick, seamless, and customer-friendly way.

Improve Abandonment and Adherence

Studies have shown that fully a third of all new prescriptions written by physicians for the treatment of patients with chronic diseases are never filled. The research says that much of this abandonment rate can be attributed to the byzantine complexity and inconvenience of today’s pharmacy process. Fueled by the convenience of e-commerce and innovative final mile solutions, direct-to-patient eliminates the hassle of the traditional supply chain, addressing the problem of abandonment and adherence at its root.

Take Back Control Post-LOE

Loss of exclusivity (LOE) doesn’t have to be the end of the line for brand drugs and the patients that rely on them for improved quality of life. A direct-to-patient program lets manufacturer take back control over access to their products post-LOE. Manufacturers continue to generate revenue post-LOE and patients enjoy convenient, reliable access to the medication they need.

Give Patients the Power of Choice

A direct-to-patient platform gives you the power to support brand-loyal patients who want continued access to your product after it’s been blocked by a formulary or stymied by generic alternatives. Patients enjoy convenient, reliable access to the medication they need, and manufacturers continue to generate revenue. It’s a win-win solution.

Compete in the Era of Online Pharmacy

Consumers have come to expect frictionless e-commerce and fast, free delivery for nearly everything they buy. This increasingly includes their prescriptions. Direct-to-patient gives manufacturers an independent way to compete in an online marketplace that gets evermore crowded with pseudo-pharmacies and telehealth brands offering rebranded generics and convenient e-commerce experiences.

Leverage Brand Equity

The rebranded generics offered by the growing crop of online pseudo-pharmacies and telehealth brands represent a real threat to manufacturers, but within that threat exists a valuable opportunity. Manufacturers, after all, have one thing that new companies don’t have: brand equity. And brand equity is a powerful thing. Direct-to-patient lets manufacturers leverage their brand equity with tools to engage and serve brand-loyal patients directly.

Improve Patient Experience

Direct-to-patient offers patients the same prescriptions they used to get by way of a complex and inconvenient traditional pharmacy process through a branded customer experience meticulously designed for utmost convenience. Smart checkout technology and easy payment options are optimized for mobile, enabling patients to fill their prescriptions on the go, while custom packaging ensures patient delight the moment their medication arrives.

Is Direct-to-Patient Right for My Brand?

How can you know if a direct-to-patient program is right for your product? There are many scenarios where DTP is a good fit. The following are a couple of the most common:

Your Drug Has Been Blocked by a Formulary

You’ve found out that your product has landed on a formulary exclusion list. Do you have a plan in place for getting the drug to patients who need it? A direct-to-patient program can let you skip the formulary and connect with brand-loyal patients directly. It’s a reliable alternative to an increasingly unreliable traditional supply chain. Direct-to-patient is helping pharmaceutical manufacturers overcome the challenge of NDC blocks.

Your Drug is Facing Loss of Exclusivity

According to the a recent survey, $8.3 billion of small molecule sales were at risk due to loss of exclusivity in 2018. LOE may be inevitable, but it no longer has to mean such a catastrophic loss of revenue for drug companies. Direct-to-patient gives you the power to support brand-loyal patients who want continued access to your brand medication. Continued patient access means continued revenue post-LOE.

The Takeaway

Driven by e-commerce, streamlined by anticipatory pharmacy, and delivered by innovative fulfillment solutions, a fully integrated direct-to-patient platform is a powerful, independent way for pharmaceutical manufacturers to leverage brand loyalty in a new industry paradigm defined by patient choice and frictionless commerce.

Direct-to-patient lets manufacturers take control back from drug formularies and competing generics, and offer patients a new way to access the medications they know and trust. Why invest in direct-to-patient? In a consumer landscape that changes by the day and becomes increasingly unaccommodating to the traditional pharmacy supply chain, the real question seems to be, why wouldn’t manufacturers invest in an innovative, independent solution?

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

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At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

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The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

To Adjudicate or Not to Adjudicate?

To Adjudicate or Not to Adjudicate?

More and more these days, brand pharmaceutical companies run up against a roadblock when trying to obtain reimbursement from third-party payors, pharmacy benefit managers (PBMs), and insurance carriers. The roadblock? The drug exclusion list.

With drug exclusionary lists, payors and PBMs actively block all reimbursement to specific brand drugs at the National Drug Code (NDC) level. If, for some reason, your brand is unfortunate enough to find itself on one of these industry blacklists, tried and true traditional marketing strategies won’t help. To put it bluntly, you’re in trouble.

When it comes to NDC blocks “to adjudicate or not to adjudicate” is no longer the question. The very question itself is taken off the table. When faced with the prospect of a drug exclusion list, pharmaceutical manufacturers have little choice but to take their proverbial medicine.

A History of Adjudication

It wasn’t always like this. In the early days of managed care—some 40 years ago—pharmacy claims were processed on a manual basis. Each insurance company had their own paper claim form and pharmacies were required to complete and submit the forms for reimbursement in what was called a “shoebox.” It wasn’t uncommon for patients to collect and submit dozens of manual paper claims at once. At the time, there was no prescription medication drug benefit, as medications weren’t covered by insurance the way they are today.

In 1976, the National Council for Prescription Drug Programs (NCPDP) was formed to standardize third-party claim forms and ease the burden on pharmacies and consumers. The result was the Universal Claim Form, eventually adopted by most third-party payers.

Over the next 15 years, significant advances in technology made possible real-time information on eligibility, maximum amount dispensed, drug interactions, drug utilization, copay amount, and claim submission for payment. These advances opened the door for computerized point-of-sale (POS) systems that automated the entire pharmacy claims process.

Every U.S. pharmacy, whether retail, specialty, or mail-order, eventually had a proprietary or commercial pharmacy software system to adjudicate third-party pharmacy claims using the NCPDP standard.

The Rise of the PBM

Enter PBMs, which formed to help large insurance carriers and self-insured employers manage their pharmacy benefits and claims. In the early days of managed care, adjudication was a straightforward process. That’s because the majority of brand drugs were in one of three formulary tiers. Each tier presented a unique set of challenges. Tier 2 usually required a very aggressive rebate strategy, while Tier 3 required an expensive copay offset strategy.

In order to negotiate lower discounts and implement generic maximum allowable cost (MAC) lists, PBMs created their own retail pharmacy networks and, eventually, mail-order and specialty pharmacies as well. Increasingly exclusive formulary lists allowed them to negotiate rebate contracts with pharmaceutical companies, and it wasn’t long before PBMs were generating revenue on every stage of the pharmacy and pharmacy claim process.

These processes have resulted in PBMs becoming some of the largest and most profitable corporations in the world. Recently, there has been unprecedented consolidation within the industry, as PBMs have merged with national retailers and insurance carriers, further solidifying their stranglehold on the market. This vertical integration of the pharmacy supply chain has created winners and losers within the brand drug marketplace.

Hit and Miss Attempts to Counter PBM Controls

Over the past five years, many pharmacies and drug manufacturers have tried to develop strategies, programs, or techniques to circumvent PBM contracts and controls. Unfortunately, few of these attempts have been sustainable or scalable, and most have failed.

The most common strategy has been to create a “network” of individual retail pharmacies across a broad geography to adjudicate brand drug claims and then mail them directly to patients. This is only an effective strategy for very low-volume and/or low-cost medications, though.

The problem is, as soon as the program scales and becomes successful, PBMs notice that large numbers of claims are being processed outside the geographical location of a retail pharmacy service area. At that point, the PBM will notify the retail pharmacy that it is in breach of its retail contract and the pharmacy is forced to stop its participation in the program immediately.

If a retail pharmacy loses one of the top three PBM contacts, it can be devastating to their business. Over the years, the industry has seen numerous pharmaceutical companies buying or using small independent pharmacies across the country to stay one step ahead of PBMs. This business model is ultimately a whack-a-mole strategy, lacking both long-term sustainability and scalability.

The industry has also seen large national retail pharmacies create direct channels to consumers that bypass the traditional PBM model. But even this strategy has not been broadly adopted nor effective. Often the channel conflicts with state Boards of Pharmacies’ mandates that generic drugs not be dispensed without a dispense as written (DAW) code submitted by the physician. Obstacles like these ultimately make these strategies too challenging for any national retail pharmacy chain to successfully implement and execute.

The State of the Industry Today

Little has changed since the emergence of PBMs. Brand manufacturers are still faced with limited options and are losing ground with third-party payors, who are increasingly trying to limit consumer choice and interfere in the physician-patient relationship.

Given all the complexities and past failures, it sometimes seems like the best option is to continue within traditional channels and develop ways to compete for a smaller share of an increasingly smaller pie.

There are bright spots on the horizon, though.

Over the past few years, the industry has seen successes as brand manufacturers move to consumer-facing, direct-to-patient (DTP) models.

For Manufacturers, the Future is Direct

Loss of exclusivity (LOE), lifestyle, and dermatology products have all seen the potential of e-commerce driven direct-to-patient channels. These programs have been a boon for manufacturers faced with high distribution costs, even higher retail switching rates, prescription abandonment, and a low rate of insurance coverage.

The value of direct-to-patient channels lies in their flexibility and customization. Each manufacturer and each product are unique; they each have their own strengths and weaknesses that can be leveraged or addressed by a dedicated direct-to-patient channel. Innovative final mile solutions round out an integrated platform of services that improve patient experience from the moment they order their prescription to the moment they receive it at home.

Best of all, there are more options available now than ever before, as the onset of telemedicine, e-commerce, and modified hub services make the next generation of pharmacy services a brighter future for pharmaceutical manufacturers.

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

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The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

Manufacturers in the New Age of Online Pharmacy

Manufacturers in the New Age of Online Pharmacy

As the late great Yogi Berra once said, “It’s déjà vu all over again.” It seems the age of the digital pharmacy is here (again). An internet search for “Roman” history is now more likely to return results for erectile dysfunction. And it seems like a new player enters the marketplace every day.

A number of these companies are breathing new life into multi-source generics by rebranding them under their own name. Some are founded on telemedicine services that preclude patients having to travel to a prescribing physician. Still others are focused on specific disease states or essentially digital versions of the traditional pharmacy experience.

The question is, other than the passage of time, has anything really changed since the Drugstore.com implosion? After all, PBMs still block these pharmacies from seeking reimbursement. One has to question the long-term financial viability of the massive direct-to-consumer campaigns these companies are deploying to acquire patients given generic drug margins in the era of $4 generics at Walmart.

Whether we’re seeing the early days of a new market or tech-savvy entrepreneurs making the same mistakes of the dot-com bubble, the upshot of all of this activity is an increasingly disorganized competitive landscape and thoroughly confused consumer base.

Customers don’t yet understand the differences among online pharmacy brands and that confusion is likely to grow, as dozens of companies get in on the action. This includes legacy brands like CVS partnering with InstaCart on same-day delivery or the most momentous harbinger of the age of online pharmacy: Amazon’s acquisition of PillPack.

Pharmaceutical manufactures risk ceding their brand franchises to private label generics powered by digital pharmacy platforms.

For pharmaceutical manufacturers, the new age of online pharmacy represents both an imminent threat and a new commercial opportunity. Not only will brand manufacturers have to continue to contend with traditional generics post-LOE, they now find themselves competing against rebranded generics, complete with slick private equity backed marketing campaigns, seamless digital experiences, and custom-branded packaging. (As if the ever-growing expansion of formulary exclusion lists weren’t enough.)

If manufacturers who have invested an average $2.6 billion in the development of a brand franchise want to avoid ceding their brands to these new digital upstarts, they are going to have to rethink not only the way they manage their LOE strategies, but also develop new e-commerce platforms to engage and retain consumers and streamline the final-mile delivery of medications into the hands of the patients who need them.

Frictionless Digital Commerce

Consumers today expect a frictionless digital commerce experience. Gone are the days of waiting three weeks for a doctor’s appointment, getting a prescription in person, driving to the pharmacy, finding parking, waiting in line, and filling that prescription before finally driving back home.

As with every other corner of the retail sector, seamless digital experiences are reinventing the way patients purchase and receive medications.

The world’s largest retailer has entered the fray and more and more patients are discovering the burgeoning crop of online pharmacies, each of which feature smartly designed websites with streamlined user experiences. For millennial-aged men, numerous telehealth companies have destigmatized the process and made shopping for ED and hair loss medications almost hip. Others have extended the experience to women’s health, contact lens, and more.

Patient experience in the age of online pharmacy is highly engaging and—in stark contrast to the traditional pharmacy model—even enjoyable. With telemedicine and online chat bots often built into the experience, online pharmacy eliminates the need for doctors’ appointments altogether. The medicine you need can be delivered to your door literally hours after you complete your online order.

End-to-End Customer Experience

From marketing campaigns to personalized packaging, e-commerce offers patients the exact same generic prescriptions they used to get through a complex and inconvenient traditional pharmacy process through a high-end, branded customer experience that is meticulously designed for utmost convenience.

Online pharmacies offer opportunities for users to interact with a customer service representative at any point in the patient journey, delighting customers and maximizing conversion rates.

E-commerce-based online pharmacies provide smart checkout technology with easy payment options to streamline the purchase process. They capitalize on free shipping as a powerful customer motivator. And they design the entire experience for mobile, with the understanding that in the age of online pharmacy the overwhelming majority of consumers are interacting with brands on the go.

  • Customers expect a personalized experience
  • Free shipping is a powerful motivator for customers
  • Customers expect consistency regardless of channel
  • Brands should provide as many options as possible to interact with Customer Service
  • More people are using mobile for price comparisons while shopping
  • Smarter checkout process with easy payment options
  • Growing interest in customized packaging among consumers

The new face of generics in the age of online pharmacy isn’t what it used to be. Homogeneous translucent orange bottles procured through a byzantine and bureaucratic process have been replaced by sleekly packaged branded containers prescribed, purchased and delivered in a matter of hours.

It isn’t just rebranded generics that pharmaceutical manufacturers have to worry about. With acquisition of PillPack and its pharmacy licensure in all 50 U.S. states, Amazon has laid the groundwork for a prescription marketplace that will fundamentally change the brand-name pharmaceutical landscape, as well.

Whether or not manufacturers participate in Amazon’s prescription marketplace and/or outsource fulfillment to the company’s vast and rapidly expanding network of distribution centers, should be a carefully deliberated decision. The algorithm-driven commoditization implicit in the arrangement would likely have a significant impact on a manufacturer’s brand equity and long-term market strategy.

Pharmaceutical Manufacturers in the Age of Online Pharmacy

What happens when the consumer is trained to think about the pharmacy brand and not the medication? Online pharmacy represents a real threat to manufacturers, but within that threat exists an opportunity. Manufacturers, after all, have one thing that the new crop of fly-by-night online pharmacies don’t have: brand equity.

Manufacturer brand equity and loyalty established with physicians and consumers over a product’s 17-year proprietary lifecycle can be retained and even enhanced by engaging customers directly in the frictionless digital commerce model they have come to expect, complete with end-to-end customer experience.

In the age of digital pharmacy, manufacturers need a direct-to-patient platform powered by e-commerce technology, anticipatory logistics, and innovative final-mile solutions. They need to provide patients with an alternative to the fragmented and overly complex traditional pharmacy process that prevents nearly a third of all new prescriptions for patients with chronic diseases from being filled.

In this new world, manufacturers need an independent way to leverage customer loyalty, compete against the rise of these rebranded generics, and avoid the commoditization implicit in the forthcoming Amazon prescription marketplace.

E-commerce and the age of the online pharmacy stands to represent either the most lucrative opportunity in the history of the industry or an existential threat to the brand equity that manufacturers have built over decades of being in business.

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

LEARN MORE

The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

The Formulary Exclusion Squeeze

The Formulary Exclusion Squeeze

With the advent of managed care in the 1980s came prescription formularies—lists of medications that were approved for prescription to patients in various care settings.

Originally, formulary inclusion was based on third-party assessment and clinical evaluation of the efficacy, safety, and cost-effectiveness of a given medication. These lists represented a sensible way for payors, providers and patients to determine which drugs qualified for coverage and optimized the cost vs. clinical effectiveness equation.

Over the past thirty years, however, formularies have evolved from straightforward, single-tier lists of brand and generic medications to become exceedingly complex matrices of as many as ten separate tiers with selection criteria than can be described as opaque at best.

What was once defined by objective clinical standards is now dictated by for-profit middlemen in the form of pharmacy benefit managers (PBMs).

The growth of tier-based differential rebates—created by PBMs as a means for pharmaceutical manufacturers to secure access to formularies—fundamentally altered the role of formularies and become the driving force of formulary inclusion.

As the prevalence and size of these rebates has grown, formularies have become increasingly narrow, evolving from inclusion lists to the exclusion lists we know today. The result is that patients now pay larger and larger percentages of the cost of certain necessary medications, sometimes as much as 100 percent.

The Blacklists of the Pharmaceutical Industry

Formulary exclusion lists have become the blacklists of the pharmaceutical industry, created by PBMs to block consumers from gaining access to medications, not because of efficacy or safety concerns, but solely as leverage points for PBMs in their rebate negotiations with manufacturers.

And the exclusivity of formulary lists only continues to grow.

The size of formulary exclusion lists has increased by nearly 160 percent since 2014, during which time the combined number of treatments on CVS Pharmacy’s and Express Scripts’ drug formulary exclusion lists grew from 132 to 344.

Over this same period, the prevalence of consumer-driven health insurance models also grew substantially; approximately 40 percent of consumers are now enrolled in some form of high-deductible health plan.

With patients taking on more and more responsibility for the management of their own healthcare and experiencing first-dollar exposure for the actual costs of prescription medications, should a PBM continue to decide which medications prescribers and their patients select as optimal for their care?

When PBMs make these decisions based in large part on the scope and depth of the rebates that manufacturers are willing to pay, the resultant limitations on patient choice seem especially cynical.

How did we get to a point where one healthcare company can pay another to block patient access to a competing product in the marketplace?

An Existential Threat to Manufacturers

Given the recent vertical integration trifecta of Aetna/CVS (a payor/retailer combination), Cigna/ESI (a payor/PBM combination) and Walgreens/AmeriSource Bergen (a retail/wholesale combination), now is a good time to think about the next logical step in the evolution of increasingly narrow formularies.

If the PBM and the retailer are the same company, what motivation would they have to even stock non-formulary drugs in their stores? If wholesalers can’t get them into stores, why should they even include such medications in their supply chain or distribution networks?

CVS and Walgreens comprise no less than a 40-percent share of the US retail pharmacy marketplace. The manufacturers of products excluded from these companies’ formularies face an existential threat when it comes to medications in which they’ve invested billions of dollars to research, develop, and commercialize.

Overnight, the average $2.6 billion that manufacturers invest in the development of a brand franchise could be all but wiped out by a large PBM/retailer partnership that decides not to stock their product.

The upward trend of mergers and acquisitions throughout the healthcare industry means that the scenario described above isn’t just pessimistic speculation. It’s only a matter of time before patient access to medication via traditional retail channels is defined by singular corporate entities who control both the playing field and the rules of the game. And that’s just brick-and-mortar retail.

With its acquisition of mail-order pharmacy PillPack, Amazon’s entry into the pharmacy space represents a consolidated corporate force majeure on the online flank of the competitive landscape as well.

Leveraging Brand Loyalty with Direct-to-Patient

To survive in this new industry paradigm, pharmaceutical manufacturers are going to have to take their fate into their own hands.

Only by establishing independent, direct-to-patient channels can manufacturers ensure that the massive investments they’ve made and continue to make into innovation and development won’t be subject to the whims of PBMs and retailers who deem their products cost prohibitive.

By utilizing direct-to-patient platforms driven by e-commerce and anticipatory logistics, manufacturers will always have an ace up their sleeve when it comes to patient access, engagement and retention. Brand loyalty, after all, is a powerful thing.

Manufacturers can leverage brand loyalty by engaging patients on the clinical value of their brand and offering a more consumer-friendly alternative to the fragmented and overly complex traditional pharmacy process—an alternative that is streamlined by e-commerce and anticipatory logistics complete with innovative final-mile solutions.

The reality is that today’s formulary lists are pay to play, and rebates are the cost of admission. But increasingly narrow formularies are just the tip of the iceberg when it comes to the challenges that pharmaceutical manufacturers will face in the years ahead.

Brands that approach these challenges with passive strategies dependent on traditional channels risk facing existential threats to core products. Manufacturers that tackle these challenges head on, with independent, direct-to-patient platforms at the ready, will be poised to define the future of the industry themselves, rather than letting it define them.

Schedule your Direct-to-Patient consultation now

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

LEARN MORE

The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.

The Future of Final-Mile Pharmacy

The Future of Final-Mile Pharmacy

The way consumers purchase goods and services is changing by the minute. Anticipatory logistics, final-mile transportation networks, and same-day delivery services are fundamentally shifting how consumers access goods and services. New technologies and supply chain models that combine the convenience of e-commerce with the immediacy of traditional brick-and-mortar stores are the direct descendants of the biggest influencer in recent retail history: Amazon. With its rapid delivery service model, Amazon has transformed the retail landscape, along with customer expectations, establishing an aggressive benchmark of near frictionless consumer experience in virtually every industry.

To accommodate growing consumer demand for instantaneous order fulfillment, an ever-expanding array of well-financed final-mile platforms like Uber, Postmates, and Deliv have entered the fray, investing billions of dollars in the race to create crowd-sourced and asset-light regional logistics networks. These networks are designed to support the scale economies required to provide same-day delivery service in urbanized areas with dense metropolitan populations. As the new retail model expands to healthcare, it’s really only a matter of time before companies that provide car service and food delivery are playing an integral role in the distribution of pharmaceuticals as well.

  • 61% of internet users would pay more for same-day delivery
  • 82% of shoppers want same-day shipping options
  • 64% of millennials are more likely to purchase online if same-day is an option
  • 25% of shoppers would abandon their cart if same-day delivery was unavailable

A Supply Chain Ill-Equipped for the Future

The basic schematic of the pharmaceutical supply chain in the United States dates back to the turn of the century. Because it is inherently retrospective in nature, it is fundamentally ill-equipped to support the requirements of e-commerce platforms, including anticipatory logistics, distributed networks and home delivery. Industry pundits are quick to point out that prescription medications aren’t the same as books. And they’re right. The book industry doesn’t have to contend with the impact of entrenched middlemen, a crisis of runaway costs, poor product quality, and low consumer expectations. Would the book industry tolerate a supply chain where up to 37 percent of customer orders were never even filled?

Studies have shown that fully a third of all new prescriptions written by physicians for the treatment of patients with chronic disease are never filled. Research into the cause shows that much of the abandonment rate can be attributed to the byzantine complexity and inconvenience of today’s pharmacy process. While the complex supply chain requirements for prescription drugs differ from those for consumer packaged goods, Amazon’s entry into the pharmaceutical marketplace likely means the pharma industry is going to have to adapt to modern e-commerce models—not the other way around.

A Game Plan for the Amazon Effect

As consumer behavior continues to change, pharmaceutical manufacturers can expect competitors to respond with new fulfillment channels to meet increased customer expectations. Pharmacy Fulfillment by Amazon (PFBA) and its existing network of 150 distribution centers across the country will drive a paradigmatic industry shift in the coming years. Manufacturers need a game plan if they hope to survive the infamous “Amazon effect.”

What should that game plan look like? For starters, it needs a final-mile strategy. One option to consider for that strategy will be Amazon itself. For a defined set of service fees (as opposed to rebates and the traditional AWP, WAC and AMP gamesmanship), manufacturers will be able to advertise their brands on Amazon as well as have their products fulfilled by the company’s vast and rapidly expanding network of distribution centers. Whether or not to participate in Amazon’s prescription marketplace and/or outsource fulfillment to the company should be a carefully deliberated decision as the volume and commoditization entailed by the partnership would have a significant impact on a manufacturer’s brand and longer-term strategy.

An alternative to Amazon for pharmaceutical companies could be to partner with existing logistics companies like UPS, FedEx, or other third-party courier services to offer home delivery and position their product in regional distributions centers closer to consumers in population-dense geographic markets. The problem is that these companies don’t have the required licensure, pharmacy operations, dispensing automation, or expertise necessary to manage and dispense prescriptions to consumers at home.

An Independent, Direct-to-Patient Alternative

For manufacturers, the best alternative to partnering with Amazon is an independent solution, one that moves the traditional logistics and pharmacy process upstream in the value chain, closer to the end consumer. From e-commerce to pharmacy to final-mile fulfillment services, the best alternative to Amazon is a direct-to-patient platform that gives manufacturers faster, more efficient ways to reach patients. This anticipatory e-commerce pharmacy channel forms the backbone of the Medvantx platform.

With the industry’s only end-of-runway pharmacy, Medvantx is enabling manufacturers to reach patients anywhere in just hours. Partnering with UPS, we offer the largest dedicated healthcare storage and logistics capabilities in the U.S. Our proprietary final-mile solution and comprehensive fulfillment capabilities are designed to collapse the supply chain and bring manufacturers closer to patients.

Final-mile delivery is set to become a critical competitive battleground for the pharmaceutical industry in the coming age of e-commerce and instant fulfillment. To ensure the independence and long-term viability of their brands, especially in the face of increased formulary exclusion, manufacturers need to establish a final-mile strategy that will be able to keep pace with the evolution of consumer demand in the years ahead.

Schedule your Direct-to-Patient consultation today

Reach Patients Faster

Our direct-to-patient platform collapses the supply chain and brings manufacturers closer to patients. Contact us today to see how we can help you reach patients faster.

TALK TO AN EXPERT

About Us

At Medvantx, we give pharmaceutical brands a better way to connect with patients who need them: directly and immediately.That’s how we’re Redefining Pharmacy.

LEARN MORE

The Definitive Guide to Direct-to-Patient

Everything pharmaceutical manufacturers need to know about direct-to-patient channels.