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DISTRIBUTOR CONTRACT POSITIONS VALIDATED

How a small pharmaceutical manufacturer realized significant savings following a review of distribution partner contracts.

SITUATION

A smaller pharmaceutical company was in the middle of an important product transition and wanted to validate the viability and value of their existing wholesaler, specialty distributor, and GPO contracts. Archbow was hired to review existing contracts and provide expert guidance on negotiations with one of the “Big 3” wholesalers.

Archbow conducted a thorough assessment of all wholesaler, specialty distributor, and GPO contracts. Archbow score carded each agreement twice:


  • Distribution partner vs. distribution partner

  • Manufacturer’s existing agreements vs. the industry standard, based on sales volume


Considerations were given for organization size, product volumes, expected portfolio growth, etc. Archbow provided a full analysis and outlined a negotiation strategy. Following the project read-out, Archbow remained engaged to ensure the manufacturer could effectively utilize the strategic advice while re-negotiating agreements.

APPROACH

RESULTS

Archbow’s analysis validated the company’s contract position, determining that their contracts were within Fair Market Value

Strategic and tactical opportunities for improvements in future renegotiations were identified and communicated.


Manufacturer was able to negotiate from a position of strength after understanding “critical contract levers” that the wholesale partners would target. Manufacturer is applying key learnings to all new negotiations, resulting in significant DSA savings in perpetuity.