Data-Driven Insights

Insights from CBI’s Customized Distribution and Pharmacy Strategies Summit

May 20, 2015   |   Kevin Leininger

I gave an interesting presentation to a group of pharmacy distribution experts at the recent CBI Customized distribution and Pharmacy Strategies Summit and would like to share some of my insights from the conference.

The retail channel is undergoing a significant change and must be thought of and managed differently than in the past.

  • The retail channel is saturated with product and it is getting harder and harder to get product on shelves.
  • It is getting harder and harder to have the right amount of product available for purchase: too little and you risk therapeutic interchange and too much and you risk returns.

Given this set of challenges, the group discussed several things that these leading experts are doing with newly available analytics and data. These include:

  • Forming stocking strategies well in advance of launch and only stocking those pharmacies that make sense for a brand. Often this is 10,000 pharmacies or less irrespective of size of launch or therapeutic category. The days of the old style auto-stocking program are coming to a close.
  • Monitoring update with daily or weekly channel data-based analytics and data and adjusting on the fly using coupons and copay cards where overall demand for a therapeutic category is highest but individual product sales is lowest.

In reviewing the latest successful launches, a few key stocking strategies have become best practices. These include:

  • By month three, most successful launches experienced demand pull-through from both newly stocked pharmacies as well as reordering pharmacies.
  • Those pharmacy-stocking strategies that employed a targeted approach as outlined above, experienced materially lower returns. Those still utilizing auto-stocking programs experienced materially higher returns.
  • Stocking reached full stock levels within the first 26 weeks; however, utilizing targeted stocking programs led to materially better lift and lower returns thus maximizing return to the manufacturer and retailer.

Data is driving launch and channel collaboration.
One pharma company attendee stressed the use of channel data and analytics to work with the retailer as a great way to establish credibility with the retailer and collaborate to build the best possible launch plans. He stressed that the available channel data was great and used in concert with the retailers’ data to provide the best possible outcome. The company has been using this approach for more than two years and were going to use this approach for all launches going forward.

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