Executive Briefings

Changes in Prescription Drug Market Bring Changes in Healthcare and Life Science Supply Chains

Since the passage of the Prescription Drug Marketing Act (PDMA) in 1987, marketing has become increasingly important to branded pharmaceutical companies. Pharmaceutical companies have been very successful at generating and sustaining demand for their products through marketing campaigns. But as payors' policies shift more and more to evidence-based practice, the demand for drugs is being shifted to those therapies that are most cost-effective, as measured by outcome research. Outcome data and measurements are therefore more and more critical, becoming key drivers of actual demand and consumption in the market. Pharmaceutical markets are being determined and demand shaped by this data. This is driving some fundamental changes in focus for pharmaceutical companies, beyond just marketing, to try and maximize the clinically measured outcome of the treatments they sell.

Of course, pharmaceutical companies have always had an interest in having the best possible proven clinical outcomes. But now that interest has increased exponentially and is no longer just about discovering and manufacturing a drug that is effective and safe. There are many activities along the entire supply chain that can impact the ultimate outcome for the patient. Drug manufacturers will increasingly pay attention to the downstream activities that affect outcomes, such as how the drug is handled in the distribution chain, doctor and patient education programs, and partnering with service providers that can help improve compliance and lifestyle choices.

Some drug manufacturers likely will start trying to measure the impact on patient outcomes of these various end-to-end supply chain activities. For example, do the drugs delivered by one 3PL consistently perform better or worse than those handled by another (after compensating for other factors)? If so, then why-what are they doing wrong or right? The same type of analysis could be done to measure the effectiveness and impact of manufacturing processes, doctor and patient education programs, counseling services, and so forth. Some of these efforts could be integrated into initiatives to serialize and track drugs at the end-salable unit level, from the manufacturing plant through to sale to the patient, and perhaps taking those one step further to the actual consumption of the drug by the patient (privacy concerns need to be addressed here, of course). This will require increased capabilities for conducting complex, fine-grained adaptive trials and multiple stages of in-life testing, as well as the competencies for gathering and analyzing the data.

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Since the passage of the Prescription Drug Marketing Act (PDMA) in 1987, marketing has become increasingly important to branded pharmaceutical companies. Pharmaceutical companies have been very successful at generating and sustaining demand for their products through marketing campaigns. But as payors' policies shift more and more to evidence-based practice, the demand for drugs is being shifted to those therapies that are most cost-effective, as measured by outcome research. Outcome data and measurements are therefore more and more critical, becoming key drivers of actual demand and consumption in the market. Pharmaceutical markets are being determined and demand shaped by this data. This is driving some fundamental changes in focus for pharmaceutical companies, beyond just marketing, to try and maximize the clinically measured outcome of the treatments they sell.

Of course, pharmaceutical companies have always had an interest in having the best possible proven clinical outcomes. But now that interest has increased exponentially and is no longer just about discovering and manufacturing a drug that is effective and safe. There are many activities along the entire supply chain that can impact the ultimate outcome for the patient. Drug manufacturers will increasingly pay attention to the downstream activities that affect outcomes, such as how the drug is handled in the distribution chain, doctor and patient education programs, and partnering with service providers that can help improve compliance and lifestyle choices.

Some drug manufacturers likely will start trying to measure the impact on patient outcomes of these various end-to-end supply chain activities. For example, do the drugs delivered by one 3PL consistently perform better or worse than those handled by another (after compensating for other factors)? If so, then why-what are they doing wrong or right? The same type of analysis could be done to measure the effectiveness and impact of manufacturing processes, doctor and patient education programs, counseling services, and so forth. Some of these efforts could be integrated into initiatives to serialize and track drugs at the end-salable unit level, from the manufacturing plant through to sale to the patient, and perhaps taking those one step further to the actual consumption of the drug by the patient (privacy concerns need to be addressed here, of course). This will require increased capabilities for conducting complex, fine-grained adaptive trials and multiple stages of in-life testing, as well as the competencies for gathering and analyzing the data.

Read Full Article