The specialty channels are driving both growth and channel complexity in the Pharma and Biotech industry. The specialty channels are more complex by design. Complexity = products handling requirements (e.g. cold chain), high prices (> $3K..), extensive patient support infrastructures/services, regulatory requirements (e.g. REMs), etc. Specialty channel management is like conventional channel management on steroids.
My take is that it moves channel management from a supply chain/distribution continuum into a business continuum. The “morphing” along into the business continuum relates brand needs to channel needs to contracting needs. The segmentation of the channel into its core components; a) channel strategy, b) channel contracting and c) channel execution can develop a holistic approach to specialty channel management.
The core components of the Specialty Channel Management Model are defined in a broad enough way to impart flexibility in the approach. The interrelationships of these components create multiple “sweet spots” of opportunities. The opportunities borne out a good strategy can bear much fruit. The careful alignment of the contracting strategy with the brand needs is essential to designing an appropriate contract designed to deliver performance.
Underlying the effective management and execution of specialty channel management is data. Data needs to be defined along the component parts of the continuum to ultimately be meaningful. The challenge is defining what data is truly needed and by whom. This easier said than done. Unfortunately data “creep” usually seeps in. If it permeates too deep, it has a tendency to undermine the simple data needs with complex data requirements. My advice, go simple and make sure you have the base elements for managing the channel. Save the long pass for those that have thought through all the details and have truly mapped out a comprehensive data strategy. It can work, but requires a disciplined commitment.
The utilization of the specialty channels and value created should be viewed as a means to an end. When done right through the appropriate channel segmentation, the specialty channels do the heavy lifting and work for you. Not the opposite, like you working for the channels arguing over contracts, chasing data and not knowing if the channel is performing (performance – saved for a subsequent discussion!!!).