Cencora VP of Emerging Therapies Discusses Cell & Gene Therapy Distribution Strategies

PE: Making the right choice in channel strategy is vital to achieve commercial success. What key questions do CGT developers need to answer to inform their distribution strategy?

Lattanzi: In terms of time, I recommend starting as early as possible, even prior to the start of your pivotal trial, because you really need to start thinking about what some of these channel and distribution considerations are downstream. I think one of the differences with cell and gene therapies versus traditional brand products is that for traditional brand products, you typically have a clinical trial support infrastructure, and then you're building out a whole new commercialization infrastructure for launch. With cell and gene therapy, you're actually dealing with a lot of the same players. So, you're dealing with similar centers that might already be doing your clinical trials, even some of the same teams and individuals within those centers. Also, some of your venders are very similar if you think about some of the specialty logistics providers. They’re doing the clinical and the commercial logistics as well. Setting up that infrastructure early on can then provide that foundation, so you can then expand upon it and scale it out for the broader patient population needs, as well as layering on some of the other things you might need in terms of reimbursement support.

Beyond that, the first thing that comes to mind is the logistical challenges. These products have to be kept frozen. There are specialized pack outs, doors, and real time temperature monitoring that needs to occur to make sure that the products maintain viability. While the frozen aspect creates some flexibility in terms of the time that you have to store and ship the products, they can usually be kept at those temperatures for years at a time. It can create some downstream challenges because not all providers or sites have the ability to store at those times. For example, they might not have a cell therapy lab or ultra-low freezer. On the other end of the spectrum, there is the fresh cells. While they’re easier to ship, they offer additional complexities in terms of scheduling and coordination. Usually, the viability of those cells is only a few hours or days at most. If you think about the time it takes to do quality release, to transport the product, to give the facility time to receive it, and then administer it to the patient within that window, it can be really challenging, especially in a commercial environment. When the clock's ticking and they're not able to use that product, then they can't get reimbursed for it. Thinking about credit policies and return policies for some of the pharma developers is really important in that kind of scenario.

The other logistical difference is the chain of custody and chain of identity requirements. You need to make sure that a person’s cells get put into a product for them and only go back to them, they don’t go to anybody else.

Other than that, the big thing here is the price point. Most of these therapies are one-time treatments, or they're a single course of treatment. The upfront cost is much higher than what we've seen for anything else. The most expensive product is $4.25 million on the market today, and there are some providers that just won't be comfortable taking on that reimbursement risk at these kinds of price points. Even if they are, there could be certain patients that they might not want to take on. This is especially true when there might be a really small network of providers that might be treating patients. That increases the chances for patients to have to travel from out of state. That means they could be covered by a plan or a payer that the facility just doesn't have any experience and working with. There are just nuances with different plans and payers around how they need to submit claims that could cause denials. Some of these facilities just decide for particular patients, they don’t want to take the risk. If you want to include a specialty pharmacy, they usually have a national footprint. They’re oftentimes working with a wider variety of payers that maybe any one individual center may not have as much familiarity with. Looking back, when you combine some of the price considerations along with the logistical considerations, it really creates this unique need for very tight integration, communication, and coordination across all the stakeholders in the value chain. There's the cell orchestration aspect along with some of the scheduling and coordination. There’s also the back end when the product goes back. There are some vendors out there that can help with that. It can be done manually, but it's really not scalable. That only works when you're talking small patient populations. Having an electronic provider really helps to create a lot of efficiencies. But a lot of the cell orchestration suppliers are missing certain aspects of the process. For example, the order to cash process, the patient reimbursement, support the prior authorization support, and some of that information. Cencora is actually partnered with one of the big cell orchestration platforms. We’ve also taken some of our other services and solutions, some of those things around reimbursement and created our integration hub to help streamline a lot of that collaboration, communication, and coordination, really across all of those stakeholders.