The distribution channel for provider-administered oncology drugs is undergoing significant change—notwithstanding the Centers for Medicare & Medicaid Services’ (CMS) misguided and controversial Part B Drug Payment Model.

As you will see below, pharmacies—via white and brown bagging—have displaced buy-and-bill distribution channels for about one-quarter of oncology products. For the remaining purchases, community oncologists still rely on traditional buy-and-bill wholesale distribution channels. Hospital-based practices, however, are more likely to source products from the hospital’s pharmacy.

This shift has important implications for manufacturers’ channel strategies, specialty pharmacies’ business growth, distributors’ share of channel volume, and the expansion of 340B pricing to non-340B providers. When you eliminate the impossible, whatever remains, however improbable, must be the truth.

TO EXPLORE STRANGE NEW CHANNELS

In the buy-and-bill process, a healthcare provider purchases a drug from a pharmaceutical wholesaler or specialty distributor. After administering the drug, the provider submits a claim for reimbursement for the drug and any other medical services. Over the past 10 years, buy-and-bill has shifted dramatically from lower-cost physician offices to higher-cost hospital outpatient settings. See The Decline and Fall of Physician Buy-and-Bill For Specialty Drugs

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