The hub-and-spoke approach has become a standard of drug commercialization. Having a network of patient hub services, specialty pharmacies (SPs) and other stakeholders was originally conceived to provide easy access to a manufacturer’s drug and drive compliance. In theory, the model would allow each stakeholder to focus on core competencies and create greater overall value for manufacturer and patient alike.
In practice, however, the model encourages stakeholders to operate in silos—with disjointed communications, poor data visibility and inconsistency across the network. The consequences for the patient and manufacturer alike are dire.
Yet, many commercialization officers and CEOs believe the hub-and-spoke model is the only way to bring their drugs to market. That’s understandable: the issues are often invisible, if you don’t believe there’s an alternative.
So let me reveal some of these issues now. What you’re about to see are five hidden truths regarding the hub-and-spoke model. These issues can be especially daunting in the commercialization of rare and orphan drugs, where high-touch patient service is essential. If you are creating (or revisiting) a commercialization strategy for one of these drugs, I encourage you to pay particular attention as you read on. See where the hub-and-spoke model can fall short for everyone involved, especially patients. Then take the next step to learn about a better way.
#1: Patients must navigate the healthcare system on their own.
Change is inevitable: patients change jobs or move. Payers drop in and out of hub-and-spoke networks. The SP that patients are required to use transitions from one to another. Out-of-pocket costs can shift due to changes in coverage, deductibles, co-pays and patient assistance programs. The question is not if, but when.
And when it does, the hub, SPs and other participants work in silos, so communications are often disjointed. At the same time, patients suddenly become their own care coordinators. On their own, they must navigate multiple layers of complexity within the insurance company and manage the prior authorization (PA) process just to get approval for their medication. Then, patients have to identify the right SP to obtain it.
Most importantly, patients have to do all this navigation quickly and efficiently to ensure there’s no disruption in a life-sustaining therapy. They are dealing not only with the issues of the disease itself, but also the added complexity of a hub-and-spoke model that, ironically, was originally designed to help patients get and stay on therapy. In truth, the exact opposite is the typical result.
The goal was to create a premier patient experience, when the actual result can be inconsistent and ineffective. There is an alternative. You can design your strategy first around the patient instead of around “the way we have always done it.” And, in doing so, you can avoid leaving patients to navigate the system on their own.
#2: There’s disjointed data from multiple stakeholders.
When you have several organizations operating independently with inconsistent communication among them, it’s difficult to get a clear picture of your program’s efficiency and effectiveness. Different entities use different KPIs and other metrics to measure performance. With so many unrelated data points flowing your way, how can you make informed decisions to improve the patient journey and other aspects of your commercialization strategy? How can you truly measure success?
It can be a management nightmare, and it’s unnecessary. Manufacturers may believe there’s no way to overcome the status quo, but you can. I’ve talked with commercialization officers and CEOs of biopharma companies who were focused on squeezing the best results out of a system that, at its core, is not optimized for small patient populations. With a patient-first model bringing the hub and SP services together, you can unify your data. That way, you have a reliable basis to more confidently make decisions in the future.
#3: You likely lose revenue.
A tremendous fallacy with the hub-and-spoke model is that it creates healthy competition among SPs, resulting in better pricing for the manufacturer. You think you’re gaining price control, when in fact you’ve created your own competition.
A common scenario is SPs are under pressure to offer bigger discounts to stay within the payer network. The SPs then ask the manufacturer for the difference in margin. Otherwise, the SP could not perform the services that the manufacturer wants and the patients need. It’s a constant battle of negotiating discounts and rates—all the result of the hub-and-spoke network the manufacturer created to control pricing.
Another potential loss of revenue occurs due to delays in beginning therapy and dropped patients. In small patient populations, even one delay or dropped patient can represent a significant loss of revenue for the manufacturer.
I know of one drug manufacturer whose patient moved and had to change SPs. The patient wasn’t sure how to find a new SP inside a complex hub-and-spoke network, so was noncompliant for many months. Considering that this therapy cost about $1 million a year, imagine the financial impact on the manufacturer. Even more importantly, the patient’s life could have been at risk while not taking the medication.
It’s important that no one “falls through the cracks.” If you only serve 1,000 patients—and 10 are experiencing delays in starting therapy due to an inefficient system—that could have a big impact on your drug’s success. I have heard about patients who have been essentially lost in a hub-and-spoke system for months and finally an SP says, “Oh, the approval is sitting on someone’s desk over here.” Meanwhile, the patient isn’t benefiting from the essential therapy and the manufacturer isn’t generating revenue.
#4: You will not get a team that is accountable and dedicated to your therapy.
Often, pharmacies and hubs promise you teams of experts. However, for the sake of efficiency, it’s rare that these teams are 100% dedicated to one drug. That means no single team is accountable for the patient experience.
For example, let’s say there are 1,000 patients for a particular drug and an SP is going to serve only 200 of them. The SP determines that it doesn’t make economic sense to dedicate resources exclusively to the drug. Instead, the SP may have an automated system that directs patients to someone who handles multiple, similar drugs. But that person does not eat, sleep and breathe your drug alone.
In contrast, imagine having a team dedicated to serving the unique needs of your patient population, no matter how small. The team would know every particular nuance regarding the disease state, its treatment and available coverage. These people would have heard every question many times before and could ease the minds of patients and caregivers. At the same time, the team would help physicians navigate a complex PA system, so that patients could start therapy faster.
It’s all possible, but not with a disjointed hub-and-spoke model—where multiple hand-offs among multiple stakeholders create inefficiency, impede data collection and delay therapy.
#5: You are not locked into a hub-and-spoke model.
Another common misconception is that, once you create a traditional hub-and-spoke model, you can’t transition to a model that is more focused on improving the patient experience. The perceived concern is that you would be disrupting patient access to your drug, which would negatively impact not only patient compliance and outcomes, but also your revenue stream.
In my experience, the opposite is true. After rare and orphan drug manufacturers switch to a patient-first model, I’ve seen patient compliance and retention increase—and satisfaction scores skyrocket. More often, manufacturers who have made significant adjustments to their commercialization strategies discover new patients and increase access for an otherwise underserved cohort.
The key is following a systematic blueprint with a track record of success. The blueprint should include every task required to transition patients to the new model, with stakeholders understanding their individual roles and having clear communication every step of the way.
The patient-first model
Above all, patients with rare and orphan disorders need consistency, so they can manage their condition with confidence. The hub-and-spoke model is the very picture of inconsistency—while a centralized, patient-first model brings clarity. When the hub and SP act as one, manufacturers have a better understanding of a drug’s performance, while patients benefit from a better experience.
To learn more, download our white paper, “How to create a patient-first strategy.” Or contact me directly at email@example.com or call 888-287-2017.