Return-to-Stock Is Costly to Everyone, Including Pharma

When a medication is dispensed, it’s almost at the end of its journey. All that remains, from the perspective of the pharmacist, provider, insurance company, and pharmaceutical manufacturer, is for the patient to pick up that medication and, hopefully, take it as prescribed.

But all too often, that amber vial, injectable biologic, or bottle of liquid antibiotic sits in the pharmacy’s will call system for days on end. Ten to fourteen days pass, and it’s time for that medication to be returned to stock. We’ve discussed the impact of this process on pharmacies and patients before. But prescription abandonment hurts the pharmaceutical manufacturer, as well: they’ve invested a lot of effort into getting the medication to that point.

What Pharma Loses from Abandonment

Let’s briefly walk through the manufacturer’s journey.

Even after years of work to research, develop, test, get approval for, and finally launch a new medication, the manufacturer can’t rest on their laurels. Once their medication is on the market, they need to invest in salespeople who can explain the drug to providers. This is a necessary role; healthcare providers are overworked as it is. They can’t be expected to keep up with every single drug launch that might be relevant to their practice. Without a channel of information on new medications, providers can end up prescribing drugs with which they’re familiar, but may not be the best therapy for their patient.

But educating the provider is just the first step. Manufacturers also have to negotiate with insurance payors to ensure they’ll cover the drug. Then they need to negotiate with wholesalers to keep it in stock. If the wholesaler doesn’t have the drug, then pharmacies can’t get it.

At this point, everything seems aligned, right? The provider has prescribed the drug to the patient, the patient’s insurance has agreed to cover it, and the patient’s pharmacy has the medication in stock. But wait – there’s always more. If the medication is expensive or the therapy is complex, the manufacturer will need to create a copay card to help patients afford it and patient hub program to keep patients on track.

So far, all of these activities have cost the manufacturer money. The only revenue-generating exchange is the moment when the patient picks up the drug from their pharmacy. If that doesn’t happen, all of the manufacturer’s time and effort has been wasted.

Yet that still isn’t the end of this journey. If the medication is returned to stock and isn’t re-dispensed within a specific timeframe, the pharmacy will eventually try to recoup their costs by returning the product to their wholesaler. Usually, if a product is within twelve to six months of its expiration date (and is eligible for return), it will be sent back.

The wholesaler will then keep the medication at their distribution center for another few months. Usually, once it’s within three months of expiration, the wholesaler recoups their cost by returning the product to the manufacturer. Generally, wholesalers and pharmacies receive 90-100% of the wholesale acquisition cost (WAC) on returns.

At that point, the medication’s journey ends unsuccessfully. Prescription abandonment has added up to a massive amount of waste for the manufacturer and everyone else.

A Possible Solution

To be clear, some return to stock – or reverse distribution – is expected. It’s particularly common when a manufacturer loses exclusivity over a brand. As soon as cheaper, generic alternatives hit the market, fewer patients will want the brand name drug, and that brand inventory will end up returning to the manufacturer.

But as we know well, prescription abandonment has many root causes. Some of those causes are remarkably simple: the patient doesn’t have reliable transportation. The patient is too sick to leave the house. The patient meant to pick up their prescription, but somewhere between work and caregiving, they completely forgot about it.

Currently, there isn’t a good way for pharmaceutical companies to intervene at that stage of the process. They don’t have insight into which of their brands are sitting in pharmacies’ will call systems. They don’t know which patients need help physically picking up their medications, and which have abandoned their prescription for some other reason.

But there may be a way to rescue these medications from being returned to stock: targeted prescription delivery. If manufacturers can find a way to work with pharmacies to identify prescriptions that are likely to be abandoned and returned to stock, they’ll have a chance to step in to help. By offering free home delivery strategically, manufacturers could reduce the amount of inventory that eventually returns to them.

ScriptDrop is committed to helping life sciences companies in this respect. After all, we’re an innovator in prescription access; we have delivered well over 10 million prescriptions in just over five years, have a proprietary delivery platform that keeps pharmacists in-workflow, and have the most extensive courier network of any prescription delivery provider. We work with everyone, from major retailers to small community pharmacies. If anyone can help, it's us!

If you work with a pharmaceutical manufacturer, keep an eye on ScriptDrop. Or reach out to our pharma Sales representative Jane Crandall at jane.crandall@scriptdrop.co to learn more about our current delivery solutions.

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