While pharmaceutical companies invest millions in drug development and commercialization, many overlook the critical connection between their products and patients: the pharmacy. This blind spot can be especially costly for retail and specialty-lite brands if they treat pharmacy strategy as an operational afterthought rather than the strategic imperative – with consequences affecting both patient outcomes and brand performance.
The mounting pressure on “traditional” pharmacy models
Recent industry shifts have created a perfect storm of challenges. Vertical integrations among PBMs, insurers, and pharmacies have accelerated formulary exclusions and cost-control measures. More than 600 drugs were excluded from the formularies of the three largest PBMs in 2024 alone.1 Simultaneously, retail pharmacy closures continue nationwide, creating “pharmacy deserts” where patients face significant access barriers.
Decreasing reimbursement and increasing drug costs have created unsustainable conditions for both chain and independent pharmacies. Pharmacy under-reimbursement often leads to “underwater scripts” where dispensing certain medications becomes financially untenable. This challenge is exacerbated by benefit design tools that divert manufacturer support away from the pharmacy ecosystem. As of 2024, 43% of commercially insured lives were in plans using copay accumulators, while 47% were in plans using maximizers.2 Collectively, these programs redirect approximately $6.5 billion of manufacturers’ copayment support funds away from patients and toward plans and PBMs, further straining pharmacy economics while adding complexity to prescription fulfillment and patient access.
The ripple effect across the prescription journey
A poorly designed pharmacy strategy creates far-reaching consequences that affect all stakeholders. For patients and providers, the impact is immediate and troublesome:
- Fragmented patient experiences lead to treatment delays, therapy abandonment, and significant adherence challenges that directly compromise clinical outcomes
- Increased provider burden from excessive prior authorizations creates workflow disruptions and information gaps
- Prescribing behavior shifts as healthcare providers choose alternative therapies with fewer access barriers, even when not clinically optimal
- Medication access barriers as pharmacies struggle to stock prescribed therapies due to reimbursement challenges result in fewer patients able to access their prescribed treatments
Alternative channel models, like digital hubs with integrated pharmacy networks, directly address these challenges by aligning reimbursement with actual drug costs, ensuring pharmacies can reliably stock and dispense prescribed medications while maintaining comprehensive benefits investigation processes that maximize patient access.
The brand performance implications
Beyond patient care, suboptimal pharmacy strategies directly undermine brand performance in several ways:
- Revenue leakage through gross-to-net erosion and lost market share as patients, pharmacies, and prescribers switch to alternative therapies with more convenient or affordable access
- Weakened market position with less favorable formulary placement and diminished competitive standing
- Critical data blind spots from disconnected pharmacy touchpoints, limiting visibility into adherence patterns and real-world outcomes
- Missed engagement opportunities across the patient journey, impacting relationship-building efforts
- Benefits optimization gaps when pharmacies do not consistently perform thorough coverage support, leading to unnecessary application of manufacturer subsidies in cases where insurance coverage does exist
Alternative channels: A strategic imperative for retail and specialty-lite
As traditional pharmacy models struggle with these challenges, alternative channels have emerged as a strategic solution of choice. Unlike conventional models, this approach provides visibility into the script journey and addresses the growing issue of “underwater scripts,” where pharmacy under-reimbursement threatens both patient access and brand performance. After exhausting coverage options, they also ensure manufacturer-sponsored programs like copay cards are consistently applied when available, improving out-of-pocket costs and reducing abandonment. Alternative channels also simplify pharmacy network management through a single vendor relationship rather than managing multiple pharmacy partnerships. Working together, this approach positively impacts brand economics.
By integrating brand access services and streamlining the patient journey, alternative channels create a seamless experience that minimizes time-to-therapy, reduces administrative burden, and provides clear access to medication. For brands, this approach delivers optimized gross-to-net management, accelerated prescription momentum, enhanced persistence rates, and expanded data intelligence. Critically, it ensures a consistent patient experience nationwide, independent of local pharmacy variations, so all patients receive the same high-quality access regardless of location.
Moving from transactional to strategic
A brand’s pharmacy strategy has evolved from an operational consideration to a core strategic imperative that directly impacts brand performance. The difference between a subpar and optimized pharmacy strategy may ultimately determine which brands thrive and which brands fail to reach the patients who need them most.
By approaching pharmacy strategies as strategic assets rather than transactional functions, pharmaceutical brands can transform access challenges into competitive advantages. The question facing pharma executives is no longer whether to optimize their pharmacy network, but how quickly they can implement an approach that addresses today’s most pressing access barriers and brand challenges.
PhilRx offers an alternative pharmacy channel that empowers manufacturers with greater control over and full visibility into the prescription lifecycle, from first fill to refill. Our expert team will guide you through designing and implementing a pharmacy strategy that transforms your commercial success. Book a demo to learn how PhilRx can help you improve patient outcomes while driving strong economic outcomes.
Sources
1 Fein AJ. The 2025 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. Drug Channels Institute; March 2025. https://drugchannelsinstitute.com/files/2025-PharmacyPBM-DCI-Overview.pdf
2 Fein AJ. Why Plan Sponsors and PBMs Are Still Falling Hard for Copay Maximizers. Published February 12, 2025. https://www.drugchannels.net/2025/02/why-plan-sponsors-and-pbms-are-still.html