Last week, in part 1 of this series, we described some of the special supply chain challenges that can apply to rare disease (RD) therapies. Now, we turn our attention to some solutions.
Below, we outline a multi-step process that we’ve evolved over the course of more than 75 RD supply chain development engagements. This process is intended to help decision-makers identify and address the critical aspects of supply chain development. It’s important to remember that in this article, we can only offer a general overview, as every product has its own unique characteristics and needs that must be addressed individually.
Typical Steps, Activities, and Deliverables
Step 1 – Achieve Strategic Alignment
Senior corporate and functional leaders must be aligned on how important RD therapies will be to the company, how much latitude is allowed in development of solutions, and how scalable the solutions need to be. For example, will supply chain capabilities only be used for one RD product or does the company anticipate a growing portfolio of RD assets?
Step 2 – Conduct initial data gathering
Building an effective supply chain will require
- Forming a cross-functional project team
- Defining a project charter
- Setting up a governance structure
These things cannot happen in a vacuum, so some basic information is needed before doing so. To start, it’s important to conduct an analysis to understand the company’s existing commercial distribution network, the capabilities and performance of that network, and the new product’s characteristics and requirements. One aspect that we sometimes encounter is the “me-too” approach when robust competition is present in the market. No company wants to offer services that are viewed as inferior to the competition, so the presence of competitors may necessitate the addition of specific services, which can drive increased costs. The initial data gathering phase will uncover these types of situations and provide a solid foundation of knowledge on which to build.
Step 3 – Gather specialized information from key multidisciplinary SMEs
Going a level deeper, it’s important to gather input relevant to the supply chain from various subject matter experts who work in a range of functions across the company. These include Sales and Marketing, Medical Affairs, Supply Chain, Commercial Distribution, Logistics, Quality Assurance, Regulatory Affairs, Finance / Tax, IT, and others. AIM leverages function-specific questionnaires to help facilitate this part of the process. Besides the collection of relevant and necessary information, this activity also serves as a signal to the wider organization that the specific commercial distribution needs of the new RD product(s) are being investigated, thereby supporting awareness-building and helping pave the way for the change management initiative that may be needed when a solution is implemented.
Step 4 – Analyze RD product commercial distribution requirements
Using the information gathered in the steps above, the project team must create a specific commercial distribution profile for the new RD product, bringing together relevant aspects from all sides of the business. The goal is to achieve a 360-degree view of the patient, the product, and the elements needed to bring them together in the most efficient and effective way.
At this point, it’s also important to ensure that any potential benefits and requirements of a possible “orphan drug” regulatory status are covered, as they may influence the set-up of the (downstream) supply chain and the commercial distribution network. The key deliverable from this step is a distribution profile that is shared with leadership and approved for use in subsequent steps. It helps clarify what the new therapy will need to succeed from a commercial distribution standpoint and paints an initial picture of the optimal supply / distribution network.
Step 5 – Analyze capabilities of existing commercial distribution solutions (including vendors)
With all relevant information about the existing network and the new RD therapy now available, this step basically involves a fit-gap analysis to highlight the differences between the status quo and the desired commercial distribution infrastructure. This analysis is another deliverable, which paints a clearer picture of what the company must do to get to the desired state.
Step 6 – Create high level solution options
During this step, it’s time to define the solution options. This can include using all or part of the existing commercial distribution network combined with actions to close the identified gaps. Or, it can involve setting up a new commercial distribution network. For each potential option, project leaders must build a high-level implementation and operational impact overview. Each overview will address areas such as project cost, required resources, capabilities and processes, the order-to-cash solution, and so on. Overviews should also outline the expected product physical, title, and financial flows, and summarize the required commercial and GMP/GDP license landscape. AIM employs benchmark data during this part of the process to help inform development of the overviews. These overviews provide leaders with a deeper understanding of each potential solution and help facilitate subsequent decision-making.
Step 7 – Prepare and present the recommended solution
In this step the project team will
- Select the preferred option
- Create a high-level road map with timelines and milestones for implementation
- Outline the next steps to be taken
Once approved by leadership, the implementation phase can begin.
Some Thoughts on Typical Outcomes
In our experience, the company’s existing distribution network can meet the requirements of the new RD products in about 50% of cases, though small adjustments may be needed. The other 50% of the time, all-new or partially-new solutions are necessary to enable successful commercial distribution of the new products.
Most often, some form of change management initiative and clearly-voiced senior management support is necessary to achieve success. The need for—and scope of—this effort will be influenced by the organizational set-up of the company (e.g., product franchise versus country organizations, allocation of P&L responsibilities, etc.).
Common Pitfalls and Key Takeaways
Common pitfalls include the following:
- Failing to sufficiently investigate whether the existing commercial distribution solutions can meet the requirements of the new RD products.
- Investigating the fit referenced above too late, resulting in launch delays.
- Failing to provide enough senior management backing and operational support to the team responsible for the new products, resulting in sub-optimal solutions and/or implementation results.
- Underestimating the commercial potential of “small products” and the importance of right-fit solutions for their commercial success, even if this may take longer to be achieved.
To summarize, below are a few key takeaways:
- Rare disease products often have specific commercial distribution requirements, which usually differ from existing products and thus require a level of operational change (and change management) to support their commercial success.
- A timely and thorough review by an objective and experienced (external) expert will help ensure that decisions will be based on complete sets of facts covering all relevant aspects and not on assumptions or pre-defined / political positions that have not been challenged.
- Acquisition or internal development of RD products is resource-intensive, therefore these new products deserve fitting and optimal solutions to support their commercial and medical success.
The launch of these complex products can indeed represent a “new ball game” for a biopharma company that has a pre-existing portfolio of more traditional therapies. If your company is considering such a strategic move, then AIM is here to help. To connect with our team, feel free to contact us via our website or direct an email to email@example.com.