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Home » Logistics » Evidence-based Medicine Has Pharma Manufacturers Taking More End-to-End Responsibility

Evidence-based Medicine Has Pharma Manufacturers Taking More End-to-End Responsibility

March 8, 2013
SupplyChainBrain

Public and private payers are increasingly basing payment policies on the use of evidence-based medicine to shape demand. Most insurers use evidence-based approaches in their coverage policies and formularies and have tiered co-pay structures which encourage patients to use more cost-effective drugs, such as generics, through a lower co-pay. Germany, Sweden, France, Spain and Italy have value-based pricing to align the price they pay for drugs with the measured clinical benefits. The UK's National Health Service (NHS) is moving to a value-based pricing policy by the end of 2013. The U.S. and other developed economies are moving in a similar direction.

All of this should make pharmaceutical manufacturers shift some attention from how well they market the drug to how well they can maximize the effectiveness of the drug in the post-marketing phase (after clinical trials and approval). Although the clinical effectiveness of a drug is paramount, the post-marketing effectiveness of a drug is determined by more than just its chemical formula. There are many factors across the end-to-end supply chain that impact how well a drug works in actual use in patient populations: all the way from the quality of raw materials to the manufacturing process, to the patient's own behavior. Some of the end-to-end factors impacting effectiveness, which a pharmaceutical manufacturer might want to manage or at least influence, include:

"¢ Quality and purity of the input ingredients received from suppliers

"¢ Manufacturing process consistency and quality

"¢ Proper handling of drugs in transit and in storage, including temperature control and in some cases humidity control

"¢ Ensuring counterfeits are not entering the supply chain

"¢ Ensuring physicians are prescribing optimal doses, which usually vary from patient to patient based on a wide variety of factors

"¢ Patient compliance, including not just whether the patient is actually taking the drug on the prescribed schedule, but ensuring they are aware of and complying with other factors that would reduce effectiveness of the drug, including interactions with other drugs or foods.

So the pharma manufacturer's end-to-end concerns go beyond managing suppliers and logistics, though those are key. It could include both supply chain and non-supply-chain actions like:

"¢ certifying third parties to properly handle the drugs (especially for temperature-sensitive drugs)

"¢ educating, perhaps even certifying, pharmacies (both retail and hospital) to ensure proper handling and dispensing

"¢ educating doctors and providing protocols for optimal dosing and therapeutic regimes, including potentially individualized or cohort-specific therapy variations

"¢ patient compliance improvements through more intuitive packaging and instructions

"¢ partnering with caregivers and third parties to develop more effective patient compliance programs.

Taken together, these will improve the effectiveness of drugs in actual use in the field - an increasingly important factor to pharma manufacturers as the paradigm continues its inexorable shift towards outcome-based payments.

                                      The Outlook

Payers will continue their move to evidence-based approaches to reimbursement. However, it will take time for pharmaceutical manufacturers to adjust their practices to this new world. The shift to increasing importance of supply chain, operations, and the end-to-end view for pharmaceutical companies is one that started years ago and will continue for many years to come.


Keywords: supply chain management, value chain, inventory management, inventory control, supply chain risk management, pharmaceutical supply chain, healthcare supply chain

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