Oncology Market Access - Channel Dynamics ... - Kantar Health

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Emerging Markets
Market Access &
Health Outcomes
Channel Dynamics
Channel companies are seeking to
diversify in order to remain competitive.
Oncology
Digital
Epidemiology &
Forecasting
Kantar Health explores how providers of distribution services
are diversifying, the types of services provided, and how they
add value to oncology products. We discuss how the increased
availability of oral cancer therapies influenced and expanded
the role of the specialty pharmacy. Lastly, we identify factors
a manufacturer must consider when developing a channel
strategy for an oncology drug.
Marketing Insights
Risk Management, Safety
& Surveillance
Stakeholder Reach
These market analyses are part of Kantar Health’s Oncology Market Access (OMA)
subscription. OMA US provides cutting-edge information and analysis on critical
reimbursement, coverage and competitive issues in the US oncology landscape. This
subscription helps pharmaceutical marketing and sales professionals more successfully
position cancer drugs in an increasingly scrutinized and regulated oncology marketplace.
The analyses are based on industry experience augmented by in-depth research with
key stakeholders, including oncologists, payers, practice managers, patients and subject
matter experts.
Stakeholder Satisfaction
Measurement
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About the Experts
Mark Looman
Analyst, Commercial
Development
Mr. Looman is responsible for analysis and
authorship of OMA US subscription materials
as well as responding to client inquiries and
supporting custom engagements. Mr. Looman
has co-authored peer-reviewed publications on
the burden of illness and developed financial
models, including budget impact models.
He has a depth of expertise in healthcare
coding systems and the Medicare inpatient
reimbursement system.
Question 1: Providers of distribution
services for oncology drugs are
diversifying. What are the types of
services now provided by channel
partners, and how do they add value
to the product?
Kantar Health’s Channel Dynamics module
explores channel companies as the
“middlemen” in the industry. They touch many
of the major stakeholders and use these touch
points to gain market share and power by
moving product and providing increasingly
valuable services. The core of what they
offer is access to specialty drugs for a large
base of providers who provide and administer
these drugs (i.e., market share); the rest of
their services build off this foundation and are
proving highly important to the stakeholders.
Consolidation in the specialty distributors (SD)
market has left a few companies with a lot of
power and a need to differentiate themselves.
Product distribution is a low-margin
commodity; services aimed at physicians
secure distribution market share, but services
targeted at payers and manufacturers are more
profitable. Distributors have different strategies,
so familiarity with the organizations is important
for knowing how to leverage their services or
for identifying potential issues.
Although their core business is to distribute
specialty drugs, SDs provide a wide range of
services targeted toward specific stakeholders
that they serve. SDs can offer payers ways to
control spending on specialty drugs and act as
a conduit of information between payers and
providers; they can offer oncologists practice
services, including electronic health records
Figure 1: Channel companies interact directly with providers,
payers and patients in the oncology care landscape
Gordon Gochenauer
Director, Commercial
Development
Mr. Gochenauer brings extensive experience
in current treatment trends and assessments
of the future treatment evolution for 30+ cancer
types. His in-depth understanding of numerous
clinical development programs combined with
lessons learned from pricing, coverage and
reimbursement and patient assistance programs
make him uniquely qualified to help clients
make important commercial development
decisions. Mr. Gochenauer has authored a
variety of oncology reports and is recognized as
a market expert for both the US and Japanese
markets.
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Specialty distributors are
evolving their business
models to remain
competitive and relevant.
(EHR), inventory management services and
practice workflow and financial management
software, as well as access to their group
purchasing organizations (GPOs) to obtain
discounts on drugs; and they can offer
manufacturers data and consulting for their
products throughout their lifecycle, including
reimbursement and product launch strategies,
hub services, REMS operations and product
marketing.
Manufacturers should keep abreast of practice
management solutions offered by SDs with
the goal of understanding how they affect
prescribing and whether and to what degree
they tilt the balance of power toward the SDs
and away from the manufacturers.
Question 2: How has the increased
availability of oral cancer therapies
influenced or expanded the role of
the specialty pharmacy?
Specialty pharmacies (SPs) are commanding
increased attention as oral therapy is more
common and accepted. Physicians have become
more willing to prescribe oral therapy despite
no financial incentive to their practice—in part
because of the services offered by SPs. Just
two years ago, 60% of oncologists preferred
to prescribe an IV drug over a therapeutically
equivalent oral option. In 2012 this preference
for IV drugs declined to just over 50% of
oncologists 1 . As additional oral oncolytics become
available and oncologists are prescribing them
more, reliance on SPs is increasingly becoming a
routine part of a practice’s daily business.
Figure 2: % of All US Cancer Patients
Treated with Branded Oral Oncolytics
Figure 3: Expenditures on oral
oncology are skyrocketing despite
modest increases in utilization
Oral Oncology Drug Statistics, 2011
% of Total Drug Spend 2.3%
∆ from 2010, Utilization 2.6%
∆ from 2010, Inflation* 8.6%
Source: Kantar Health CancerMPact ® US Patient Metrics
Available from www.cancermpact.com.
Accessed August 2012
∆ from 2010, PMPM 18.6%
*Inflation corresponds to changes in the cost of drugs; Unit
cost inflation was driven almost exclusively by brand name
drugs.
Source: Prime Therapeutics
PMPM = Per member per month
1. Kantar Health; Oncologist Survey, June 2012
ONC 4.15 If there were two treatments, one oral and one IV, that were essentially equivalent in efficacy and tolerability, would you be more likely to prescribe the oral or IV?
ONC 4.15.1 Thinking back to two years ago, would you be more likely to prescribe the oral or IV for two treatments that were essentially equivalent in efficacy and tolerability?
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Specialty pharmacy
services play an
important role in
acceptance of oral
oncology drugs
Payers have also identified SPs as an important
part of caring for their patients; the vast majority
have a closed SP network and a single preferred
SP. Payers use SPs to help control specialty
spend. Improved patient care not only ensures
that patients are being taken care of but also
reduces unnecessary spend on incorrect dosing
and biomarker eligibility, incorrect administration
of patient self-administered medications, and
additional and sometimes emergency care visits
to resolve drug-drug interactions or difficult-totolerate
side effects.
SPs evolved to meet the unique needs
associated with specialty pharmaceuticals. In
fact, SP clinical expertise ultimately defines the
niche that SPs will fill. When a manufacturer is
seeking SP services, it is wise to consider the
SPs that have the most relevant clinical expertise
and experience. For example, an SP with indepth
knowledge of hepatitis or HIV may not be
as well equipped to manage an oncology drug.
Question 3: What are the factors a
manufacturer must consider when
developing a channel strategy for an
oncology drug?
preferred relationships that may result in more
favorable contract terms or better placement in
the SD’s portfolio of drugs, but the burden for
obtaining the drug will be higher than if you have
an open network.
For oral drugs, SPs improve patient compliance
and persistence with their therapy. When
determining an SP network, there are multiple
factors to consider. For example, very small
patient populations can warrant a very limited
SP distribution strategy, while a limited strategy
for large patient populations could result in a
bottleneck for obtaining the drug and cause
issues with higher patient cost-sharing due to
distribution through non-payer-preferred SP.
The nature of the product is also important, as
drugs with few safety risks and uncomplicated
administration could potentially go through the
retail pharmacy segment as well, though prior
authorizations and high cost sharing will likely
remain an access challenge. Access to market
data is also important as SPs do not regularly
report this information to data aggregators.
Establishing data submission as part of the SP
contract or working with hub services is important
in order to know how your product is being used
and to identify issues and opportunities.
Manufacturers should incorporate a channel
strategy into their commercialization plans
beginning at least 18 months before launch. It is
necessary to understand the opportunities and
risks of strategic options with both SDs and SPs.
For physician-administered products, the primary
channel will be SDs. As discussed, SDs offer
many services to a number of stakeholders in
the oncology marketplace. This central position
provides a platform to impact prescribing, so
understanding what services can threaten or
improve market access is vital. Beyond the
services provided by SDs, it is important to
think about the size of your distribution network.
Contracting with a few SDs can allow for
For more information,
please email us at:
info@kantarhealth.com
www.kantarhealth.com
Source: Kantar Health, Oncology Market Access US, Channel Dynamics module. Available at
www.oncologymarketaccess.com.