Genentech Faces Backlash Following Onco-Specialty Decision

Having decided to restrict the distribution of 3 of its top-selling oncology medications, Avastin, Rituxan, and Herceptin only through specialty pharmacies, Genentech is witnessing protests in various forms from healthcare centers.

After a change in distribution strategy at Genentech, Ascension Health has prohibited sales representatives from the drug maker to solicit physicians at Ascension’s 1900 sites of care around the country. The ban is the result of a supply-chain move that routes 3 infused cancer medications—Avastin (bevacizumab), Rituxan (rituximab), and Herceptin (trastuzumab)—out of the regular distribution channels and into the specialty pharmacy channel.

Most large-molecule biologics are moved through the specialty channel because they require special temperature-sensitive handling and are usually higher-priced medications that need to be tracked more carefully to avoid waste. The specialty channel is actually a distribution model that typically allows for better inventory management, Genentech said in a statement to The Wall Street Journal. A narrow network also helps maintain integrity in the supply chain.

Genentech’s decision to move these cancer medications to a new distribution model will mean the drugs will go through just 5 distribution centers instead of the 80 that had previously been processing the orders. The specialty distributors are actually divisions of the same wholesalers that have already been distributing the drugs, so not much will change in terms of whom will actually move the product. Switching the drugs to a narrower channel, however, will also mean that the hospitals and medical centers will lose the discounts from wholesalers they once had when the drugs traveled through the normal route.

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