Specialty Pharma Is on the Move

As pharmaceutical companies diversify their portfolios to retain market leadership, the once-tactical process of analyzing data has become more of a strategic, C-level concern. With each new product comes a wealth of sales and marketing data. Though cumbersome, examining this data offers critical insight into market dynamics for business planning, sales management, targeted marketing… the list goes on.

Until now, the process has been complex but manageable. Syndicated vendors like IMS and WK collect and distill data from different distribution channels, tracking a drug’s path to the customer and feeding the data back to the company for analysis. There, it’s scrubbed, polished, and rearranged – ultimately providing a complete view of the supply chain according to a company’s specific business objectives.

But specialty pharmaceuticals-expected to be a $100 billion market by 2010 (IMS Health) are often noticeably missing from the syndicated data. And savvy executives must take note, or risk turning a viable new business prospect into a colossal missed opportunity.

Hit or Miss
Designed to treat a host of chronic conditions, specialty pharmaceutical products, needless to say, require special handling. Some require refrigeration; some must be injected. As a result, most cannot be distributed through traditional channels. Three Rivers Pharmaceuticals headquartered in Warrendale, P.A., for instance, offers Infergen, an injectable treatment for hepatitis C, through both direct and “alternative” distribution channels. These alternative channels include specialty provider pharmacies, or SPPs-among them BioPlus, Axium Heathcare, ITS, Precision Rx, Accredo, Special Design, Caremark, NMHC-Ascend and others. And these specialty provider pharmacies are typically absent from traditional syndicated data feeds.

While the proportion of missing data compared to total volume may be small, it can still have a significant impact. At the national level, the specialty provider pharmacies can account for up to 40 percent of sales volume; yet sub-nationally, they can represent more than 50 percent of a single representative’s share. This can quickly create a profit sieve instead of a profit center; with no insight into the missing piece, companies risk wasting significant time, misplacing critical resources, missing business cues, and losing key opportunities.

What is the real impact of this misinformation to a company’s strategic plan? Here’s where the impact of having only a partial view of the supply chain can be felt most:

• Sales. The impact is perhaps most dramatic at the sales force level, where an individual representative might handle the lion’s share of specialty provider pharmacy transactions. For Three Rivers Pharmaceuticals, the percentage of sales via traditional channels versus specialty provider pharmacies varies by territory. As a result, tracking both data feeds is essential – especially for motivational programs such as incentive compensation. Without the specialty provider pharmacy data, the market could be misrepresented, payouts misallocated, and employee morale misplaced. This can directly impact a sales team’s performance…and a company’s bottom line.

• Marketing. Future forecasting, planning and promotional efforts are only as strong and as effective as the data used to develop them. Without a complete view of their audience, marketing executives lose sight of the gaps that need to be filled, the messages that might be persuasive, and the tools that might be effective. This can result in millions of wasted marketing dollars and even more missed opportunities.

• Budgeting. In today’s market landscape, efficiency is more important than ever. Pharmaceutical companies are reassessing their budgets and redundancies in the sales force have become a major focus. To address them, management must have a full understanding of territory alignments, sales segmentation and overall effectiveness. Without it, they can’t cut costs – and worse, risk additional and unnecessary spending.

• Competitive Edge. Put simply, specialty provider pharmacy data is valuable simply because it’s harder to come by than other data. Traditional syndicated data has become a commodity, enabling every company to gain access to the same key customers and market numbers as the rest. Accessing and using data from specialty provider pharmacies can provide a tangible competitive edge.

Dig Up the Data
Knowing you need the data is easy. Getting it in a usable form can be a major challenge. The specialty provider pharmacies themselves are service providers, not data aggregators. Their data is raw and unfiltered; quality is questionable and formatting is non-existent. It’s a far cry from the actionable information and insight that pharmaceutical companies need to drive their business objectives. And it can create an even bigger mess when integrated with syndicated data already in use – data that has been subjected to stringent “scrubbing” processes and quality controls.

To effectively manage and use data from specialty provider pharmacies, companies need to put a process in place – one that involves careful data analysis, custom programming, stringent validation, and quality assurance. Sound impossible? It’s not. All you need is the right approach and it has to start from the top.

First: pharmaceutical executives must decide what they want their specialty data to tell them, from both the strategic and the tactical standpoints (see Sidebar). Next, companies must build a platform to systematically collect and distill the data. This should include thorough checks for quality and accuracy, and specific procedures to normalize and integrate the data with other data within the organization.

All of this can and should happen with the help of a multi-dimensional team, consisting of both IT and analyst resources. Sales management must also be prepared to stay involved, as decisions are made about how best to manipulate each dataset for successful integration with the existing data sources.

Outsourcing this initiative to a third party with experience dealing with integration issues is another option. With outside help, Three Rivers Pharmaceuticals built a web-accessible data mart to effectively synthesize all of the data streams for all of its products – including syndicated retail and non-retail, specialty provider pharmacy, even internal promotional tracking. By blending a wide range of disparate information into a single, intelligent view, the company can now analyze and report on data from multiple sources to better understand sales territories, implement incentive compensation, and capitalize on open opportunities.

At first, bringing specialty provider pharmacy data into the mix may sound like a daunting task, but it’s clear that the rewards far outweigh the risks of ignoring the channel altogether. When it comes down to it, specialty pharmaceutical companies are handcuffed without the complete marketplace intelligence this data provides. With it, they can monitor the entire supply chain to identify key opportunities and track industry changes – offering a critical advantage in a highly competitive, fast-moving, ever-changing market.