Maximizing Specialty Pharmacy Contracts
When approached strategically, manufacturer contracting with specialty pharmacy networks can be an opportunity to positively impact patient experience and the company’s bottom line.
At Archbow, our clients often turn to our team of specialty pharmacy (SP) experts for assistance and guidance in contract creation, negotiation, and/or renegotiation.
We asked our new team member, Mike Poland, to share some of the insights he gained while working in account management at one of the largest SPs for the last ten years. Mike has seen it all – from open to limited to exclusive distribution and rare disease products to large patient populations - and has learned some important lessons along the way. Learn more about Mike here.
Maximizing Specialty Pharmacy Contracts
By Mike Poland
In my experience, it is not uncommon for manufacturers to approach SP contracting as an afterthought. After all, so much has already been accomplished by the time contracting rises to the surface – determination of SP network needs, the RFP process, and vendor selection can take months (or sometimes even years!) to get right.
However, an organized, methodical approach to SP contracting can give manufacturers a strategic advantage when managed correctly. In my previous role, I negotiated hundreds of contracts with manufacturers – that experience has allowed me to understand what good – and bad – contracts look like.
Now, working on behalf of manufacturer clients, I advise them to take a five-pronged approach to maximize their SP contracts:
Delineate Core vs. Enhanced Services. Ensuring everyone is aligned on what services the pharmacy will provide as part of their standard offering is essential. From there, enhanced services should be segregated and clearly defined. Eliminating ambiguity protects the manufacturer.
Develop a Win/Win Relationship. Entering a contractual relationship begins with cultivating a partnership between manufacturer and pharmacy. The terms should be mutually beneficial (financially and otherwise) while remaining aligned with the best program support available.
Align on Additional Services. Manufacturers should ask themselves if enhanced services effectively meet the program’s needs. If not, it’s a mistake to be caught paying for services that do not add value to the holistic program. It’s a best practice to clearly define the type, frequency, and quality of data to ensure the program has the information it needs, when it needs it, and to ensure manufacturer stakeholders, such as Pharmacovigilance/Compliance teams, have input to satisfy any manufacturer requirements.
Apply Fair Market Value Learnings and Analysis. Manufacturers should analyze service fees every 2-3 years to stay consistent with the market. A high-quality, third-party FMV assessment should always be on-hand to support contracts.
Appreciate that Experience Matters. Whether a consultant or trusted peer, an objective third party can provide priceless assurance during the contracting process. An “extra set of eyes” can catch contractual nuances, share evolving market insights and knowledge, and help guide the best possible outcomes.
As manufacturers prepare for the launch of a new product or re-evaluate their current program, an extensive contract review by a pharmaceutical consulting company with years of experience is often the best way to ensure manufacturers’ best possible contracting experience and outcomes. That’s where Archbow can help. Our team is available to review SP contracts and provide critical comments, edits, and subject matter expertise that can maximize the patient experience and company bottom line. Contact us today to get started.
Archbow Consulting helps pharmaceutical and biotech companies in the USA and Europe design, build, and optimize product distribution and patient access strategies. Archbow was founded by industry veterans to meet a need in the marketplace for consulting options that offer diverse real-world experience, are able to leverage deep connections across the industry, and can also provide actionable strategic guidance. We invite you to learn more about our team, services, and clients’ success, and connect with us via email, LinkedIn, Twitter or subscribing to this blog which you can do below.