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Specialty pharmaceutical inventory management

Having a specialty pharmaceutical inventory is more crucial than ever, as the demand for these drugs has increased. Commercials probably interrupted your favorite TV show this week stating: "Ask your doctor if BLANK is right for you." These medications, sometimes called specialty pharmaceuticals, work to treat conditions like Crohn's disease, non-Hodgkin's lymphoma, leukemia and multiple sclerosis, as well as infections resulting from anticancer drug treatments. They can also treat more common conditions, including high cholesterol and hepatitis C.

These specialized medications, once only administered by specialists, are now available in physician offices and requested by patients. But achieving better patient outcomes rests on something far more straightforward than product research — supply chain management and pharmaceutical inventory management.

Often administered by injection or infusion, specialty pharmaceuticals can get very expensive and are highly regulated. Many specialty pharmaceuticals require climate-controlled storage and special handling.

For these reasons and more, specialty pharmaceuticals represent another opportunity for supply chain professionals. They can use their expertise in high-dollar, temperature-sensitive pharmaceutical inventory management while controlling costs and pharmaceutical inventory software.

Specialty pharmaceutical inventory management can help practices handle supply chain challenges

"Part of the definition of specialty drugs is their limited availability, often through limited distribution networks based on manufacturers agreements," says Trevor Keeler, director of pharmaceutical field sales for McKesson Medical-Surgical. As such, figuring out which distributors supply certain specialty pharmaceuticals can pose some difficulties.

Traditionally, health systems have either worked with numerous manufacturers or a specialty distributor to source their drugs. Keeler says, "It makes the most sense to manage it internally, leveraging current distributors or your current network, especially if working with someone like McKesson, which has a large breadth of distribution services."

Of course, managing orders from multiple suppliers takes time and manpower.

Trevor says it's important to plan ahead when ordering specialty pharmaceuticals to treat patients. "Often, beginning a new treatment for a patient with a new specialty pharmaceutical you haven't used before might mean setting up a new account with a new distributor. That can take time. Giving the manufacturer or distributor a couple days' notice probably isn't enough time to get set up and receive in the product."

He recommends planning out two or more weeks for getting new products. "Unfortunately, specialty pharmaceuticals have a longer contracting cycle. We see cases where a provider says they really need this product in a day or two, but it requires additional contracting or sourcing paperwork. The last thing we want to do is delay a patient's treatment."

Specialty pharmaceuticals also present unique distribution challenges due to their need for controlled temperatures. "Many drugs require storage at a precise temperature. It's important to know which should be refrigerated in order to store them properly once you've received your shipment," says Nikeeia Harris, senior manager of specialty pharmaceuticals and biosimilars for McKesson Medical-Surgical.

In addition to making inventory space for them, protect the drugs, Keeler adds, "These drugs are much more valuable than many other pharmaceuticals, so you might want to consider having these items behind lock and key and with controlled access."

Simplify your pharmaceutical supply chain

Supply chain leaders must tackle many challenges facing healthcare — they shouldn't also have to manage specialty pharmaceuticals. Look for a solution that provides access to a broad product portfolio, an operational model that provides confidence in meeting quality and regulatory requirements and simple integration with existing processes. You want the same products, but with a better distribution model.

"It's really important to utilize your existing distribution network, whoever your distributor is that likely has the capabilities to provide you these items through their channel," Keeler says. "Work with your sales reps to find the best way to efficiently and cost-effectively source the specialty pharmaceuticals you need to treat your patients."

Let us help simplify the way you order products. Get the medical-surgical supplies, pharmaceuticals and even specialty drugs you need, all on one order. Learn more about our specialty pharmaceuticals program >

Specialty pharmaceuticals may require more patient access

Since these drugs often have additional complexity, physicians may need to be more attentive to the individual needs of patients. "There are many questions a patient will have, such as how the specialty pharmaceutical is equivalent to other branded drugs," Nikeeia Harris says. "Physicians have to make themselves available to their patients to answer any and all questions or have a nurse in the practice who can handle that."

Keeler also points out that the pharmaceuticals' manufacturers often provide a patient call line with staffed nurses to address such questions. "I think that's often an overlooked resource," he says. "Specialty pharmaceutical distributors may have clinical resources as well. However, for a physician's own peace of mind, considering it's a specialty drug and rare/chronic patients, they may want to be available."

Making the economics work 

"Specialty pharmaceuticals can come with a steep price tag, so physicians must think deeply about making the economics work for them," Harris adds. "Because not all physicians want to lay the money out upfront and seek reimbursement from their insurance, they might try some creative solutions. One such solution is writing a prescription to a local pharmacy so the patient can pick it up and bring it into the office to administer," she says. This is called brown-bagging.

"Brown-bagging is risky. There's a concern that with cold chain products, you don't know if the patient is maintaining the refrigeration," Harris says. "So, physicians need to take that into consideration and decide if the expense outweighs the risk."

Additionally, because these pharmaceuticals are sometimes expensive for patients, physicians should make use of manufacturer resources that help make these drugs more affordable, Harris adds." Physicians can also work with the individual payers who can give prior authorizations to let them know the cost and if there's a more cost-effective drug out there," she says. Many manufacturers offer sample and discount programs.

Related article:
The pros & cons of the "buy and bill" model of pharmaceutical distribution: What's appropriate for your practice?

What's a biosimilar?

As supply chain finds itself increasingly involved in specialty pharmaceuticals, you'll start hearing a lot about "biosimilars." But, what are biosimilars? How are they different?

While they're not the same as generic equivalents, biosimilars are highly similar to — and have no clinically meaningful differences from — existing, FDA-approved reference biologics. They're a rapidly growing treatment option for physicians treating advanced diseases, with more than 20 unique biosimilars expected to enter the U.S. healthcare market over the next decade.

Clinicians are finding that biosimilars:

  • Expand treatment options for complex diseases
  • Offer substantial cost savings on expensive therapies
  • Are FDA-approved, safe and effective treatments
  • Come with support from FDA and other leading medical advisory organizations

By taking advantage of existing manufacturer and distributor resources and planning ahead, physicians can successfully attend to specialty pharmaceutical inventory management and administration without major problems.

Want to learn more about biosimilars? Check out our article, What are biosimilars? How biosimilars differ from biologics in cost & benefits >

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