Cutting out the middleman: the rise of direct distribution in pharma

A new trend in the US pharmaceutical sector, restricted distribution, is providing new opportunities to companies providing technologies that track goods from the manufacturer to the consumer.

Drugmakers are increasingly bypassing traditional distributors in the US altogether, and shipping medicines directly to patients - or care of the patient to an individual pharmacy or doctor's office - for example using courier services such as UPS and FedEx.

One driver for the trend is the greater use by the US Food and Drug Administration of risk evaluation and mitigation strategies (REMS) to help ensure that medicines are used safely and appropriately in patients, according to John Cervione of healthcare consultancy Blue Fin Group.

"The approach is becoming more frequent as more specialty products enter the market," Cervione told SecuringPharma.com in a recent interview. The agency is approving REMS to ensure a drug's benefits outweigh the risks, he said.

"Most products in the past have had a medication guide and product insert included," he said. "But now we see more communication plans being implemented involving physicians, pharmacists and other healthcare professionals."

At the heart of this is the concept of 'elements to ensure safe use' (ETASU), which is encouraging the adoption of pharmacy and physician certification schemes, patient and physician registries, etc, according to Cervione.

A good example of how the direct distribution approach can help mitigate risk is Jazz Pharmaceuticals' programme for Xyrem (sodium oxybate) a medicine related to gamma hduxybutyrate (GHB) used is US-approved for the treatment of narcolepsy.

Because GHB is known as a drug of abuse, the concern was that Xyrem could be at risk of diversion. In order to alleviate the FDA's concerns, Jazz developed a restricted distribution network which relies on the use of a central pharmacy which ships product directly to the patient.

Another example is a Biogen Idec programme for multiple sclerosis and Crohn's disease treatment Tysabri (natalizumab). In this case the concern was not diversion but the risk of a rare but serious side effect - progressive multifocal leukoencephalopathy (PML) - which has been encountered in a few patients taking the drug.

Biogen Idec was able to keep Tysabri on the market when the PML problem emerged because of a restricted distribution network that is accompanied by a physician certification programme and patient registry to enable close tabs to be kept on those receiving the treatment.

Last September, FDA issued draft guidance on risk evaluation and mitigation strategies (REMS) to ensure the safe use of certain drug and biologic products, such as opioid analgesics.

REMS cover a plethora of initiatives, including medication guides, patient package inserts, a communication plan for health care providers and elements to ensure safe use including requirements for those who prescribe, dispense, or use the drug.

Steve Wood, chief executive of track-and-trace and authentication technology company Covectra (formerly PharmoRx), believes the increasing requirement for REMS by the FDA is increasing the interest among drugmakers in evaluating and implementing technologies to protect medicines from diversion and counterfeiting.

"Direct distribution is growing fast in the US, to the extent that the biggest distribution firms have started their own overnight shipping divisions to deliver medicines directly to patients," he said in a recent interview.

"Several companies have failed to get approval for product launch in the US because their REMS was too weak," Wood added.

That sentiment is echoed by Cervione. "I don’t think REMS is driving serialisation, but serialisation is an appropriate tactic to support a REMS programme," he said.

Filling the e-pedigree vacuum?

It may be that some pharmaceutical companies are looking at restricted distribution because distributors have dragged their heels on implementing electronic pedigree (e-pedigree), and a growing recognition that they will not step up to this task without a mandate from the federal government because of the costs of implementation, according to Wood.

"Rather than wait for a mandate, some pharma companies have decided to sidestep the distributors altogether," he said, adding this is being seen particularly among those firms selling short shelf-life injectables and controlled substances.

Covectra has been contacted by a number of firms asking for help to provide unit dose serialisation. "This is the only foolproof way to convince the FDA that you're serious about abuse and diversion," said Wood.

"Within five years, we believe most opioids will be serialised down to the unit dose."