Before any anticipated specialty drug launch, a pharmaceutical manufacturer conducts an extensive market access evaluation to determine the best distribution model for their specialty drug. In general, there are three distinct drug distribution models to consider for a specialty drug launch: open, limited, and exclusive.1
We will explain each of the three models below and which is typically used for a specialty drug launch.
In the Open Distribution model, the manufacturer establishes distribution agreements with traditional wholesalers, specialty distributors, and specialty pharmacies to deliver the product to healthcare providers and patients. This model is used to distribute many specialty pharmaceuticals (orals, infusibles, injectables) that are used to treat large patient populations.
In the Limited Distribution mode, the manufacturer establishes distribution agreements with a selected, smaller set of wholesalers, specialty distributors, and specialty pharmacies to deliver the product to healthcare providers and patients. This model is used for drugs with small -to-midsize patient populations, pharmaceutical products that may have more severe side effects, and/or complex REMS programs. Most manufacturers with specialty drugs for rare diseases migrate towards the limited distribution model.
In the Exclusive Distribution model, the manufacturer establishes a distribution agreement with a single distributor to deliver the pharmaceutical product to healthcare providers and patients. This model is used for drugs with small patient populations or pharmaceutical products in orphan-drug categories with complex REMS programs.
Once the manufacturer has selected a distribution model for their specialty drug launch, they then go through a rigorous request for proposal (RFP) process, typically led by third-party consultants, to help identify high-performing and niched specialty pharmacies.
During the RFP process, here are a few related questions manufacturers should consider pursuing with potential specialty pharmacies:
1. What is the level of enthusiasm of the specialty pharmacy or is this just another contract?
2. What are the various disease states that the specialty pharmacy has served?
3. What is the breadth and depth of the specialty pharmacy payor contracts?
4. What is the specialty pharmacy experience on both the medical and pharmacy benefit authorizations?
5. What is the specialty pharmacy level of patient channel experience across commercial, Medicare, and Medicaid populations, especially when it comes to secondary and tertiary insurance billing?
Considering this, it is imperative to properly evaluate and choose a specialty pharmacy partner that can provide the best distribution method for your rare disease specialty drug. Learn more about how Orsini Specialty Pharmacy partners with pharmaceutical manufacturers.
Click here to download our new whitepaper detailing what payors should consider when evaluating a specialty pharmacy partner.
1. HDA Research Foundation. Specialty Pharmaceutical Distribution Facts, Figures, and Trends (2019 Edition) PDF. Accessed July 30, 2022.