Editorial Note: This article is custom content created in collaboration with AmerisourceBergen.
While the pandemic has disrupted much of everyday life across the planet in negative ways it has also highlighted positive changes, particularly within the healthcare supply chain ecosystem.
Though the struggle to meet the crushing demand for personal protection gear and pharmaceutical treatments early in the crisis could have painted a picture of backroom, hardball negotiations over acquisitions, the reality within the industry was far different. More traditional, transactional approaches that used to drive negotiations gave way to nurturing partnerships with a view to ask how organizations ranging from small drug developers to large government agencies can help each other during the crisis and beyond.
“You can do business transactionally, but you really need to have that longer-term view and commitment to creating a better healthcare system overall. We should always strive for that. The partnerships that it takes to make (the drug supply chain) go smoothly and ultimately make every element go right for the patient, is really the most important piece,” Janine Burkett, SVP of Global Specialty, Branded & Consumer Products for AmerisourceBergen, said. “It’s really important to have a partnership and be able to understand where everyone at the table is coming from.”
Burkett, who joined AmerisourceBergen late last spring from Express Scripts, brought decades of experience garnered from a progression of senior level positions at the giant pharmacy benefits manager (PBM). That experience honed her philosophy on business relationships.
“Being with such a large PBM capable of doing a tremendous job of bringing prices down helps you understand the responsibility that comes with that kind of leverage,” Burkett said. “You can have a lot of leverage, but at the end of the day it’s the partnership that keeps the ongoing discussions open.”
Moving from transactional to partnerships
Though leverage is the lynchpin of transactional relationships, Burkett added that it should only be wielded when necessary. More importantly, she said, is understanding where an organization came from and where it is going and finding your place to help them get there. For small drug manufacturers that can mean taking on more of an advisory role versus the adversarial, transactional position.
Learning and adjusting to a new corporate environment is challenging enough during normal times, but for Burkett making those changes during a global pandemic only reinforced her belief in partnerships over straight transactional exchanges. Certainly, she looks forward to resuming business travel and actually meeting her team members face-to-face in the coming year, but the past few months have cemented the importance of strategic relationships in her view.
“What I’ve learned so far is how quickly AmerisourceBergen acclimated, especially during a pandemic, to meet the needs of the health system, and the patients, in providing not just medications but also addressing government requirements as well as partnering with those same regulatory agencies in order to ensure we and everyone involved was on top of things for the entire country,” said Burkett.
Though COVID-19 has been a dominant driver in the healthcare industry this year, other non-pandemic related treatments and products have hit the market in 2020 and AmerisourceBergen has had a key role in distributing those products as well. In the specialty space the company has supported 124 launches this past year that includes helping manufacturers get the message out that the products are available.
“The overarching theme of the year has, understandably, been COVID,” Burkett said. “And I believe that our customers and AmerisourceBergen have risen to the occasion to support patients during this time. A proud moment for me has been lifting up the distribution programs we’re executing for the COVID-19 therapies in the market. We’ve broken down processes that would normally take years to develop into a matter of weeks. It’s been remarkable. And although we’ve had to adjust and take on COVID-19 therapies, we’ve continued to successfully support other launched products out there as well. R&D around new therapies continues to go on and we’ll be there to support those products with the same level of rigor and expertise.”
That ability to pivot as quickly as possible for both pandemic and non-pandemic products is ingrained in the company, and with a collaborative partnership attitude.
In the AmerisourceBergen DNA
“That DNA pervades AmerisourceBergen from the top on down,” Sun Park, EVP and Group Chief Financial Officer, Pharmaceutical Distribution & Strategic Global Sourcing, said. “But it also requires you to follow through. It’s easy to say you want to do a partner-based model, but then it compels you to figure out exactly what that means.”
And that, Park added, can be a complicated process that is based on open and consistent dialogue centering on knowing each organization’s strengths and weaknesses and what each side needs to be successful, and then being able to have all parties adjust to meet those needs.
“It means that both we and our manufacturing customers have a pretty open dialogue about what each of us brings to the table and what we each need so that we are able to reach the goals each side has set together,” Park said. “I would draw the same pathway with how we operate global sourcing across all products. Our manufacturers should and would need our insights and understanding of what challenges our customers face.”
Park, who joined AmerisourceBergen in 2012 after an extensive career in M&A and financing, said he spent his first six years at the company working closely with third parties until he moved to the global sourcing and finance teams two years ago.
“Essentially, ABC can offer a broad portfolio of 15 to 20 different business services from distribution, GPOs, consulting, patient reimbursement, global clinical trial logistics, and on and on,” he said. “It’s a complicated process that involves giving as much transparency as possible to both our customers and manufacturers on what is happening day-to-day on product availability.”
Park’s team also provides a second key element to maintaining a robust healthcare ecosystem by providing critical financial support from either AmerisourceBergen or related ventures.
Yet, he added, there is much more to do in being in the middle of conversations to help organizations with technology, data and systems processes.
“The long-term vision is to have manufacturers see us as not just having core distribution capabilities but also being a partner by helping them with broader services that will meet their overall needs like managing supply chain shortages, specialty distribution, and navigating the financial and commercial pressures of operating every day.
The challenge is to continue to educate both their manufacturing partners as well as providers to the resources AmerisourceBergen offers.
“It is critical for me and Jan, and all of our leadership teams, to transform our associates into this thinking as well in order to show how expert we are at knowing the global healthcare systems and our commitment to making it better,” said Park.
To learn more about how AmerisourceBergen anticipates supply and demand and the role of distributors in the supply chain please visit: https://www.amerisourcebergen.com/value-of-the-distributor