McKesson’s Ability to Adapt to Changing Trends
With advancements in drug therapy solutions moving at the speed of light, specifically around cell and gene therapy, the end-to-end supply chain including wholesale distributors must respond with equal velocity. A wholesale distributor’s core capabilities of disaggregation and aggregation in large volume and scale are being replaced by concierge, white-glove handling of low-volume, small-scale products where environment and timing are critical. Wholesale distributors are defining strategies to meet the needs of their stakeholders in this changing environment. This includes expanding services offerings to provide the vehicle for successful migration across the entire supply chain. Biopharma companies are looking for their partners to help address the distribution challenges in cell and gene therapy.
McKesson, one of the Fortune 500, and a global leader in healthcare supply chain management solutions, retail pharmacy, healthcare technology, community oncology and specialty care, and drug commercialization has successfully moved into this space. McKesson provides services which are transforming the traditional wholesale distribution model within the life sciences supply chain while continuing to address traditional wholesale distribution challenges.
To share some insight into McKesson’s journey, and what’s ahead, we sat down with Layne Martin, Vice President and General Manager of Specialty Distribution Solutions for McKesson.
Wholesale Distribution Challenges in Cell and Gene Therapy
Cell and gene therapies are dramatically changing legacy distribution models. Just as previous advancements in drug therapies have impacted wholesalers, so too the advancements in cell and gene therapy. The response from wholesalers must include an examination of their processes around transportation, product handling and the overall communication and coordination between the supplier and the provider. This change is compounded by the shift from a fundamental and proactive make-to-stock process to a more complex and reactive make-to-order process. We asked Layne how McKesson is able to adjust to these rapid advancements.
“[The rapid advancements in drug therapy] changes virtually everything about the way that a distributor needs to look at the challenges at stake. This, to me, is like what distributors had to do in the early aughts, as they see change coming with these new cell and gene products coming into the market and they have to say, ‘Wait a second, this changes everything…’ and ‘How do we change everything about the way we go to market to meet this kind of customer need for this version of autologous drugs.”
“[Cell and gene therapy has] many levels of complexity even more challenging than the shift to cold chain glass vials was, but this is something that we’ve kind of had to look in the mirror in the same way, that this can either be a threat to the distribution channels or this could be an opportunity.”
To further understand the challenges facing wholesale distributors, we break down a few of the challenges being presented by the advancements in cell and gene therapy.
Small-volume / small-batch products are a deviation from what had previously been large-scale disaggregation / aggregation distribution processes. This is particularly evident in specialty biologics where the movement of treatments are in small scale. These types of therapy require white-glove handling of small batch treatments from the biopharma company to the approved providers in the supply chain where the one-of-a-kind therapy is then administered to the patient. Close tracking and orchestration of the movement of the therapy becomes a critical element to the process as well.
Layne provides some additional context to the small-volume / small-batch issue with cell and gene therapy at McKesson. “I think the biggest challenge we’ve faced, is that this is very different from a distributor’s traditional role in the supply chain. McKesson is very good at doing certain activities at scale. We’re really good at picking and packaging and shipping therapies. We’re really good at handling a large case load of patients through a predefined process. This is a much wholly different animal, in that everything is being done subscale.”
Logistics and transportation of drugs requiring special handling adds additional challenges. Environmental controls and monitoring must be reliable to ensure the product maintains integrity. Cryogenics is being explored to support the environmental conditions required for the safe and efficient transportation of therapies and patient samples. To add further complexity, different biopharma companies have separate and distinct transportation and control parameters which need to be executed precisely. An additional constraint is a result of the timing associated with the patient’s treatment schedule. Layne shares that McKesson, like other wholesales, are facing similar challenges.
“In cell and gene therapy, everything is different about the way product gets stored and moved through the supply chain. This proves to be a challenging set of obstacles, given that none of the distributors are particularly adept at shipping and moving cryogenically frozen products.”
Significance to Key Stakeholders in the Cell and Gene Therapy Treatment Process
Understanding and simplifying the patient journey is a crucial aspect of any solution. Providers must administer life-saving therapies and most importantly provide the mechanism to assure patients that their care management process will be well controlled so they can focus on getting well. Pharmaceutical and biotechnology manufacturers are focused on developing treatments and locating patients to which their treatments can be administered.
The biopharma company’s commercialization strategy must account for the costs associated with treatment, limited patient pools, and small-scale production. The ability to locate target patients as well as providers who can support the protocols in administering treatments is a challenge to which the biopharma company is unaccustomed. In order to maintain the commercialization of their product, biopharma companies are also challenged with gathering efficacy data to demonstrate the long-term benefits of their treatments. Being the connecting tissue between the biopharma company and provider has positioned distributors to support the biopharma company in identifying appropriate providers. Layne recognized this challenge and is working to position McKesson as a service provider to support this opportunity.
“I think a lot of patient demand is showing up at the door, but there is still a problem for some of these biopharma companies, especially in the precommercial stages where they’re still trying to find patients where they live… either for trials or for commercial endeavors in the future.”
The provider, regardless of whether they are large hospitals or oncology centers, or small clinics, face challenges in being included in the commercial network. While they are focused downstream on treating the patient, managing their care and regimenting their treatment, they are focused as well upstream in gaining access to the treatment from the biopharma company.
The patient is the most important stakeholder in this process for whom all the pieces must come together to provide the treatment and support required. Patients are faced with the challenge of finding providers, managing the financial burden and applying to various treatment programs while maintaining focus on getting well. In evaluating the patient’s journey through treatment, McKesson identified needs which were previously unaccounted for.
“When we first started down this path [of] mapping out all the patient needs and how the patient goes through the journey of the care protocols… you could really see the patients needed tremendous amounts of education and care coordination on top of all the traditional benefit investigation and prior authorization services.”
The challenges of these stakeholders individually are unique, however when considered in totality they present an opportunity to bring together a service offering to provide the support, collaboration and communication necessary to the overall success of each element of the supply chain. The wholesale distributor is well positioned to deliver such a service. This vision to provide the next level of services is shared by both McKesson and Clarkston Consulting.
Supply Chain Services Must Continue to Evolve
Coordination, communication, and data sharing is critical in managing the demand and supply through the supply chain. The ability to maintain alignment between the primary players becomes essential, like a conductor in front of a symphony orchestra directing the rhythm and tempo required across the brass, strings and percussion. The needs of each stakeholder vary from treatment to treatment and patient to patient thus highlighting the importance a single service platform can provide in managing effectively and efficiently the critical aspects of the end-to-end collaboration within the supply chain. Individual stakeholders must be provided the tools and insights required to sustain in the changing environment and ultimately provide the treatments the patient requires.
Supporting the operational needs of cell and gene therapy does not fit into the current architectures of life sciences organizations. Real-time access to information and the changing variables of patients and manufacturing in a single platform are critical to realizing full operational capacities. McKesson and Clarkston Consulting are partnering together to enable cell and gene therapy companies, providers, and patients to have the tools they need to successfully commercialize these lifesaving treatments. To learn more about how to address distribution challenges in cell and gene therapy, please subscribe to our newsletter.
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Coauthor and contributions from Kim Kuesel.