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Blog: Limited Distribution Networks: Industry Impact and Tips for Securing LDD Contracts

The explosion of specialty drugs into the pharmaceutical market has created a greater need for structure, accountability, and therapy success. As specialty drug manufacturers look to balance patient access and safety – along with revenue and reimbursement – limited distribution networks are becoming an increasingly common strategy.

It’s clear that having access to specialty drugs has a significant impact on the quality of care that pharmacies can provide to their patients, especially as newer, more effective drugs enter the market. As competition continues, specialty pharmacies face growing pressure to perform up to the standards of manufacturers in order to win limited distribution drug (LDD) contracts.

The Value of Limited Distribution for ManufacturersLimited Distribution Networks- Industry Impact and Tips for Securing LDD Contracts blog-02

Manufacturers face myriad considerations when it comes to distributing their medications, from patient access and education to market reach to compliance with federal regulations. For example, the FDA’s Risk Evaluation and Mitigation Strategy (REMS) initiative requires detailed reporting on factors like communication, assurance of safe use, and implementation systems.

In addition to meeting stringent federal requirements, manufacturers contend with the need to deliver medications to patients as quickly as possible without compromising the quality of care needed for optimal outcomes. Smaller networks may allow a focus on more specialized pharmacies with core expertise in delivering successful high-touch care for specific conditions. This also provides an increased ability to track adherence patterns and implement comprehensive and effective education programs.

In terms of finances and revenue, limited distribution networks often streamline transactions, resulting in higher reimbursement rates. Due to the competitive nature of LDD inclusion, manufacturers also have the ability to administer fees for network participants (within Fair Market Value). In some cases, pharmacy selection can reduce the fees that distributors charge manufacturers for distributing drugs.

What Factors Help Pharmacies to Secure Contracts?

Specialty pharmacies can increase their industry clout and chances of securing contracts by showcasing a proven track record, data-driven outcomes, and strong relationships.

Specialty Pharmacy Times discusses several key factors for securing LDD contracts, including:

  • Clinical expertise: Arguably the most decisive component, a qualified and knowledgeable care team is paramount for managing relationships between patients, caregivers, prescribers, and payers. From request processing to prior authorization to long-term follow-up, the care team must be able to treat patients quickly and effectively, with comprehensive communication and adherence support tools in place to do so.
  • National accreditation: Accreditation signifies to limited distribution agents that a specialty pharmacy has comprehensively documented policies and procedures in place, all of which are consistently monitored as ongoing initiatives.
  • Comprehensive reporting capabilities: Manufacturers will require timely, accurate, and actionable reporting that includes information like diagnosis codes, lab values, and previous and concurrent therapies. These reports must show the ongoing progression of patient-level clinical data, as well as operational and financial performance.
  • Prescriber support: Pharmacy sales teams are an important piece of the puzzle in selling the pharmacy’s services, assisting prescribers with use management requirements from payers, financial issues related to drug access, and continuous follow-up throughout the care continuum. In many cases, sales team capabilities for garnering prescriber support are among the final determining factors for contracts.
  • National reach: While the selected specialty pharmacies may be small, it’s important to be able to meet patient and prescriber demand across all U.S. states and territories, according to their unique jurisdiction requirements.

Limited Distribution Networks- Industry Impact and Tips for Securing LDD Contracts blog-03The Power of a Strong Technology Partner

With all the moving parts involved for managing operations, compliance, and patient outcomes – in addition to meeting the mandatory criteria for securing LDD contracts – specialty pharmacies may wish to seek assistance and guidance from a trusted partner. The collection, organization, and analysis of data plays a critical role, which is why a strong technology partner can provide make-or-break support for pharmacies.

TherigySTM and Therigy Consulting Services

TherigySTM is designed with these opportunities and challenges in mind. The platform provides key functionality to help pharmacies manage and communicate their data, including:

  • Preconfigured, customizable care plans with clinical assessments that span 20 disease states and 400+ drugs
  • Data integration capabilities to interface with major dispensing systems while extracting normalized data for use in unique data warehouses
  • Advanced custom reporting capabilities to meet the daily, weekly, or monthly reporting requirements for LDD contracts

In addition to the TherigySTM platform, Therigy also offers consulting services to help gain traction and a competitive foothold in the industry, while building and nurturing relationships with manufacturers, payers, and other third parties that influence distribution.

Contact us to learn more about how Therigy can help your pharmacy secure and maintain critical limited distribution contracts and stay competitive in the specialty marketplace.