Data-Driven Insights

Renewed Emphasis on Driving the Retail Pharmacy Channel

December 2, 2015   |   Josh Halpern

You might have noticed that we recently announced the release of a new set of channel visualizations focused on the retail pharmacy. In an era when specialty pharmacy so dominates our industry’s headlines, you might be surprised to learn that a growing number of our customers are turning renewed attention and resources to the retail pharmacy channel.  Manufacturers are examining retail pharmacy design and pharmacist engagement with a fresh eye, and some are finding attractive opportunities to improve the patient experience and maximize brand success.

First a little history. Back in the 20th century, before the advent of script data, drug reps maintained a close relationship with pharmacists so that they could learn which doctors were writing scripts for their products. But with the availability of third-party script data and longitudinal analytics, the importance of this intelligence source diminished and the rep-pharmacist relationship atrophied. Today, most call plans still mandate that the rep call two pharmacists per day. But, ask a senior commercial leader if these calls actually happen, and they’ll probably tell you that “At best, our President’s Club reps make those calls.”

Many pharma companies have Trade National Account teams that are charged with managing the manufacturer-chain relationship at a headquarters level. But these teams are not, typically, staffed to scale beyond headquarters calls.

Over the past five years, IntegriChain has worked closely with five different pharma companies that have launched field salesforces dedicated to engaging pharmacists. These teams all carry a pharmacy-oriented message and sales kit, with significantly greater emphasis on managed-care coverage, co-pay offset options, and demand in the pharmacy’s region, and less emphasis on clinical messaging. These teams are delivering value to pharmacists – helping them help their patients with medication cost and benefit navigation. And on the basis of that value, the pharmacy sales teams are developing relationships in the pharmacy that ultimately lower script abandonment and therapeutic interchange.

More than a dozen other IntegriChain customers are either evaluating the launch of a pharmacy salesforce or at a minimum re-prioritizing pharmacy calls in the HCP salesforce’s call plans and territory management. The manufacturer-pharmacy relationship is gaining traction.

Why now?  What trends are driving this surge in industry interest and investment?  Let me highlight a few developments that I believe have had the greatest influence on our customers’ thinking.

The Blurry Retail/Specialty Line
A growing percentage of innovative product launches are “specialty” drugs (higher price, smaller patient population, significant benefit hurdles), but not all of those drugs flow through tightly controlled specialty pharmacy networks. Instead, many are distributed through full line wholesale with little restriction on which pharmacies can source the product and fill scripts. For these products, there are often a small number of retail pharmacies – maybe 2,000 to 4,000 – that fill more than 50% of their scripts, despite the fact the products are in open distribution.  These pharmacies are often focused on specialty products, despite being “open door” retail locations. In some cases the pharmacist may have established relationships with specialists or clinics where scripts for the category of product typically originate, letting the providers know that the pharmacy is adept at filling scripts for the products in question. There is significant value in the brand, often through its provider salesforce, developing close relationships with these key pharmacies. The sales rep can foster the virtuous cycle of collaboration between specialist providers and clinics and the local area pharmacists best able to meet patient needs.  

Pharmacy-Patient Relationship
Some of our customers have conducted primary market research that shows that patients are most comfortable discussing their out-of-pocket medication costs with their community pharmacist. Although pharmacists are heavily incented to meet generic fulfilment quotas within their stores, the focus on generic fulfilment is somewhat more limited outside the major chains.  And even in the largest chains, pharmacists have a desire to provide value to their patients by assisting them with the cost equation of accessing the medicine their provider has prescribed. A growing number of brands are finding value in the pharmacy and chain programs by focusing efforts in this channel on communication and delivery of patient savings and access options.

No Call Backs
One of the fastest ways to alienate a doc is to burden them with frequent call backs from the pharmacist, for example, when the product is not available or the patient hits an unanticipated managed care hurdle. Brands need docs to see their products as “easy to write,” and plenty can go wrong in the pharmacy and make things harder. This is particularly true in an era when retail pharmacies are resisting stocking any but the fastest moving brands. IntegriChain has consistently found that the average pharmaceutical brand is in stock at less than 50% of pharmacies at any point in time. For more specialized product that flow through retail, that stocking rate might fall as low as 5%.

In this model, it’s more important than ever to understand which pharmacies see the most scripts presented for the brand and to engage those pharmacists in order to minimize the risk of physician call backs due to avoidable stocking or managed care issues.   

Data
Last but not least, the increased availability of pharmacy intelligence through channel data and channel analytics has been a key influence on brand willingness to engage the pharmacy.  Third- party script data does not identify which pharmacy filled a script and consequently could not be used to measure the effectiveness of retail programs and pharmacy detailing. But EDI 867 data and IntegriChain’s pharmacy analytics make it possible for a brand team and its supporting stakeholders to directly measure opportunity and lift. This in turn has increased leadership willingness to pilot programs and invest where pilots show the greatest impact.

In summary, brands and their partners in Sales and Trade are more engaged in the retail pharmacy than they have been in nearly two decades. This engagement is being driven by the evolution of drug portfolios to specialty, the shift in the retail pharmacy’s stocking model, and the pharmacist’s impact on both the patient journey and the provider’s perception of the ease of writing the brand.  

Pharma companies are experimenting with diverse models. Some are investing in full on pharmacy salesforces, others in a re-prioritization of daily pharmacy calls by the provider salesforce, and still others primarily in Trade driven headquarters and regional activity. And across the board, these initiatives are being planned, targeted, measured, and managed based on data.  

What is your company’s pharmacy strategy? Unless your portfolio has shifted completely to buy and bill and/or closed network specialty pharmacy, now is an ideal time to re-examine organizational assumptions about pharmacy and its value to your brands.

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