How and when a patient receives their medications continues to change. Traditionally manufacturers have relied on wholesalers because of their ability to navigate regional complexities and their capacity to gain access into the market. This is just one link in a long chain of organizations involved in the distribution process which also includes pharmacies and pharmacy benefits managers (PBM). This process has led to many inefficiencies and inflated costs leaving branded drug manufacturers struggling to compete with generic alternatives. As a result, the method of using wholesalers, distributors, and middlemen to service customers is moving direct. The industry is investigating alternative distribution models in order to take greater control in the distribution process. Distribution models such as Direct-to-Pharmacy and more recently Direct-to-Patient are helping to significantly reduce the number of hands touching the product and in the process significantly reducing the inflated costs attributed to each link in the chain.
The Direct-to-Patient (DtP) distribution model has had a tremendous impact on patient care. The DtP model has allowed patients participating in clinical trials to receive treatments at home, increasing the treatment success rates as patients are more likely to continue with the trial. DtP has streamlined the diagnostic testing process by changing where and when samples can be collected. Finally, manufacturers are able to deliver significant cost savings to their patients on their day to day medications allowing them to use brand name pharmaceuticals and avoiding the one size fits all generic medications. The end result in each of these scenarios is a more satisfied patient.
The increased efficiencies of DtP distribution process have improved patient satisfaction. DtP drastically reduces the amount of waste attributed to the traditional distribution methods. With each change of hands, from wholesaler to pharmacy and beyond, the delivery time to the patient is increased. In order to negate this delay in delivery time, manufacturers work with wholesalers to keep considerable volumes of product in inventory. With DtP, organizations are no longer leaving millions of dollars on shelves where the product expiration date is a significant concern, by streamlining the journey from manufacturer to patient.
DtP can also help branded pharmaceutical manufacturers become more competitive against generics. Traditionally, insurance companies have steered patients towards the use of cheaper generic medications and are more reluctant to cover brand name pharmaceuticals. As manufacturers are moving towards eliminating the traditional distribution middlemen, the costs of these pharmaceuticals are coming more in alignment with their generic competitors. As a result, they are gaining greater acceptance from these insurance carriers.
Adopting a Direct-to-Patient distribution model is not without its challenges. Manufacturers must now consider how they will navigate the regional complexities previously supported by wholesalers. For this reason, manufacturers are seeking first-rate logistics partners and solutions. Organizations are utilizing technology to help them more closely manage shipping and distribution as well as transportation execution of their products. Manufacturers are learning to leverage advanced technologies such as machine learning, AI, robotic process automation to make the distribution process more efficient through better decision making. Most importantly, organizations are leaning on logistics partners with first hand regional and industry expertise to take the product from manufacturer to patient. These partners are operating in ways beyond those performed by a traditional courier, such as mitigating risks like cold chain and temperature management, regional regulatory nuances, and complex documentation requirements.
Inflated costs have driven patients to seek alternative treatments whether by choice or because insurance carriers are not covering brand name medications. Much of this can be attributed to a bloated distribution process that requires involvement from many organizations before it reaches its final destination. This has left pharmaceutical manufacturers focusing on ways they can compete with their generic competitors and regain control of the distribution process. Direct-to-Patient distribution has given them the ability to level the playing field.