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Direct Purchasing deals with Pharmaceutical companies, what is the best path forward, it at all?

We are currently negotiating rather tempting to negotiate a Direct Price with several pharma's but the first one we approached, claimed they do not enter into those deals.. Is this because pharma's want to maintain their high margins? is there some good, practical advice to circumvent this process?

8 Replies

Rafael Apocalypse
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Rafael Apocalypse Entrepreneur
Software Engineer at MercadoLivre.com
Here in Brazil, the goverment bid pharmasand by in high quantity so they can bargain prices, hospitals do the same, but the numbers are incredibly high.

Don't know how much do you want to negotiate, but those guys are looking for milions of dollars for each sell.
John Papathanasis
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John Papathanasis Entrepreneur
Vice President of Product Management at Wellpartner, Inc.
Mark, I can probably help here but I do not fully understand what you are trying to accomplish. As a general rule, independent pharmacies do not purchase inventory direct from pharmaceutical manufacturers. Instead they purchase from wholesalers such as Cardinal or McKesson. Large chains also purchase from wholesalers, but may purchase certain drugs direct from the manufacturers.

Prices for drugs, particularly generics, fluctuate, which is why non cash (meaning not funded insurance patients) transactions adjudicate using a price schedule which price using a semi-complex pricing algorithm with a pharmacy benefit manager.

I'm happy to share a conversation to try to help answer your questions.
Mark Sendo
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Mark Sendo Entrepreneur • Advisor
Founder, CEO, Forbes Contributor, Conference Speaker, TechCrunch featured story twice
This pharam has a patent and FDA approval (no generics and no competitors) and we believe we can distribute significantly more Units through our innovative approach. For doing so, we feel "entitled" to a better pricing scheme, hence, DP. WE are based in Ann Arbor, are you near by?
Thomas J. Kaled
2
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Thomas J. Kaled Advisor
Business Development Consultant @ thomas.kaled@gmail.com
If @John Papathanasis cannot help you I would be more than pleased to try. Know however that I very much agree with John's thoughts and would add that you might also have good luck with GPO's (Group Purchasing Organizations) depending on what you are trying to achieve.
John Papathanasis
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John Papathanasis Entrepreneur
Vice President of Product Management at Wellpartner, Inc.
Mark,

I did a little reading on your website. If I have this right what you envision is using drones to distribute certain medications and an injection system to every day people to treat people overdosing on opioids.

Right?

If so it raises some questions that you may have already addressed. Pharmacy licensing and distribution for example. How is the patient paying for the drug? You aren't asking those, so I presume those things are complete.

What Thomas said is spot on. Simply showing a better distribution system to get a DP is a tough sell to the manufacturer. They tend to base pricing on volume. However, have you had a discussion on rebates? Those are post-dispensing negotiated discounts. I can definitely help with that subject.

Suryanarayanan A
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Head, Incubator consulting services at Bhiveworkspace
Hi, I solved this problem by offering services that they could not do with patients/doctors as value add and broke the ice.
Mark Sendo
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Mark Sendo Entrepreneur • Advisor
Founder, CEO, Forbes Contributor, Conference Speaker, TechCrunch featured story twice
Thank you for your suggesting, and let me try to share some non confidential info. We have a two phased approached to distribute medical devices (think EpiPen) or nasal/injector for Naloxone. Using what we call Human Social Engineering, we transfigure the layperson (friend/family/caregiver) to become the actual administrator of badly needed, sometimes life saving medication. that designed for the layperson to administer.
We do not believe our new education/training/distribution platform has been tried before in the healthcare space, and as there are a few more "hands in the fire" we felt direct pricing (less expensive drug acquisition cost) would be necessary. However, i suppose we first need to show proof ? Then at that point once proof is demonstrated would a pharma then be open-minded to a DP model? And are there trade-groups or other regulatory issues they can use as an excuse (or reality) that would prevent them from a DP deal?
Thomas J. Kaled
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Thomas J. Kaled Advisor
Business Development Consultant @ thomas.kaled@gmail.com
Neat concept, has lots of applications beyond what you present here @Mark Sendo, although I suspect you understand that you are have given us only a 'tip of the iceberg' picture.
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