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Wholesale Supply Channels Update

Web Exclusives - AVBCC COVID-19 Highlights

In response to the impact of the COVID-19 pandemic on oncology practices and providers, manufacturers immediately started offering extended payment terms to help them with cashflow, noted Duane Kembel, National Vice President of Physician Office Sales at Cardinal Health Specialty Solutions. “We were able to get those agreements in place and pass those terms on to practices. Many manufacturers also have performance-based agreements, and we knew that the pandemic would have a significant level of impact on performance measures, so it has been important to ensure that we are able to modify contract structures and educate on change to performance-based contracts, to avoid undue financial burdens on oncology practices.”

Amerisource Bergen and McKesson Specialty Health also negotiated similar terms with manufacturers and passed those on to its provider customers. However, there are limitations, noted Naomi Gutierrez, National Vice President for Provider Solutions Account Management with McKesson. “We needed to take a conservative approach with this, because, of course, these extended terms are short-term loans. As practices turned to new financial frontiers and patient visits started to slow down, we have been diligent about educating our customers about the opportunities and risks of these terms. We have received many comments from these practices telling us that had it not been for our very focused consulting, they might have gotten themselves into tough situations.”

Lisa Harrison, RPh, Amerisource Bergen’s President of Oncology Supply, reported that approximately 40% of practices her company surveyed saw a 40% decline in referrals to oncology, whereas nearly 30% saw a decline of 50% or higher. Significant numbers of them were able to leverage the offers of the various stimulus programs—55%, for example, utilized the federal Paycheck Protection Program.

“Although we are seeing practices slowly recover and some back toward the norm, data comparing July 2020 with July 2019 still show a decline of about 2.5% in the number of unique patients, about a 4% decrease in the total number of E&M visits, and nearly an 11% decline in new patient E&M visits,” said Ms Harrison. “Things are much better now than they were in early April, but there is still a serious concern over the reluctance to seek care.”

Ms Harrison noted that practices will see some relief by the suspension of sequestration until December 2020. Amerisource Bergen has also used its practice data to model the impact of the 2021 Medicare proposed rules, regionally as well as nationally. “On the surface, it appears that oncology will see a greater than 10% increase, but when applying those changes to real practice data, we see a much more modest change of around 1% to 2%, and some providers depending on their geographic location may potentially see a decline,” she said.

A particular area of concern in the supply chain has been a shortage of immune globulin (IG). In March 2020, the overall collection of plasma—an essential component of IG—declined for the first time in many years, said Patrick Schmidt, CEO of plasma products supplier FFF Enterprises. “In April, plasma collections plummeted to 2016 levels.” He presented data showing that in college cities, plasma collections had declined by 53% as of June 2020 compared with the same time in 2019. Plasma collections have also declined by 62% in Mexican border areas, and by 51% in the United States overall.

“This pandemic has exposed the vulnerability of all parts of our wholesale supply chain, including the plasma supply,” Mr Schmidt said. “The data we’ve seen so far would suggest that we are looking at future shortages of IG of nearly epic proportions.”

Suppressed demand resulting from missed infusions (patients missing doses because of fear of exposure to the pandemic) has fended off some of the impending shortage, Mr Schmidt went on to say. “We’ve seen a decline in demand by about 10% over the first 6 months of 2020,” he noted. However, he also predicted that the shortages would soon be felt and recommended that IG usage in the United States be adjusted and conserved through dosage optimization and management of off-label usage in anticipation of a difficult supply period. “For example, one rare neuromuscular indication, chronic inflammatory demyelinating polyneuropathy (CIDP), consumes about 25% of today’s market share of IG, and studies have suggested that there is significant overuse or misuse of IG in CIDP. Some of that volume could be reallocated,” he noted.

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Last modified: August 24, 2020
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