Episode 71: How to Source Specialty Pharmaceuticals Smarter with Layne Martin

Amanda Brummitt:  WeInfuse Podcast Episode 71. Welcome to the WeInfuse Podcast. My name is Amanda Brummitt. In every episode, we give you a seat at the table as we talk to infusion center owners, operators, and experts, so that you get the insight you need to run a thriving practice. In this episode, we talk with Layne Martin, Senior Vice President, General Manager Specialty at Morris & Dickson. Layne shares his journey into specialty pharmaceuticals and insights into smarter purchasing for sustainability of infusion centers. Layne, thank you so much for being here with us today. If you could start by just telling our listeners who you are and what your background is.

Layne Martin: Yeah, sure. I was at McKesson for about 20 years or so, which is a long time, but I found them in 2001. I had lived in the Bay Area at the time and I guess as you will in that time, everybody was into “.com”. So I had been struggling and trying to figure out a way to “get rich quick” in the “.com” era, and that business, it did what most all of them did at that time, is it went out of business.

So I was online posting, maybe even a monster .com posting, and then I found McKesson and happened to get the job there. My first day in the job as it happened, like shockingly, it was September 11th, 2001, was my first day in McKesson. So I–

Amanda Brummitt: Oh my goodness. 

Layne Martin: Yeah, I didn’t work a whole lot that first day. My second day on the job, I came back and tried to roll up my sleeves, but I spent much of that time negotiating distribution contracts for pharmaceutical products with pharmaceutical manufacturers, so biopharm customers. It really became like a great way to build some credibility in the pharma world.

The key there was to figure out a way to align my interests as a distributor with that of the pharmaceutical manufacturer and with the downstream healthcare practitioner. Then you start to build some relationships, you start to get to know the products, you start to learn a little bit about how to build sustainable supply chains and maybe more than anything, just build some trust that you do what you say and say what you’re gonna do.

So that’s probably the biggest thing that I learned there. And then right around 2020 I got a chance to go off and work. Apparently, I didn’t learn from the “.com” bubble. I went and took a couple roles in digital pharmacy, especially pharmacy where I got a chance to learn firsthand how pharmacy transformed care in the self-administer products.

Really, it’s some of the similar themes is what I think some of our listeners might experience, that you’re building a brand around caring for patients, building trust with your providers that are referring these patients to you, and showing that you’ve got some skill in helping care for patients access insurance benefits and improve their outcomes. A couple of different terms before I came to Morris & Dickson. 

Amanda Brummitt: Yeah. I’m bummed for you that the “get rich quick” thing didn’t work out, but it seems like specialty pharmacy’s probably better since you’re in it. 

Layne Martin: I not sure the “get rich quick” would have benefited my life, so no complaints. 

Amanda Brummitt: So Layne, did five-year-old Layne want to be a “.com” guy or a specialty pharmacy distributor? Like how did you find yourself in this industry? 

Layne Martin: Hell no. I think five-year-old Layne wanted to be Mike Schmidt. I guess I was a big baseball fan and I was convinced I’d be in the Hall of Fame.

No I got a chance to get in the specialty world in somewhere around 2007, which is early days for the specialty market as a whole. It was clear that the pipeline, the drug pipeline was robust and all these people were talking about how that was gonna disrupt the wholesale environment, but we didn’t really know what it meant or how we were gonna do it.

But we’d seen a lot. We had seen one of our competitors grow substantially in this space, and we had this vague idea that it was gonna drive the market going forward. And so I got a chance to become part of that for us. So, as a second employee in our specialty business, which really just means that I got to make all the mistakes and learn all the lessons about how to innovate and we had to take a bit of a disruptive approach. We differentiated ourselves by listening to our customers, listening to our pharma partners, and really hearing their needs and trying to develop solutions that address that. So you know that over the course of 2007, we took businesses that were in a distant last place position to market, and by the time I left in 2020, was a market leader in specialty distribution. It was, I think you could say that in a lot of ways they’re laying out the strategy roadmap for everyone else in the industry at this point. 

Amanda Brummitt: What an incredible time to be in specialty pharmacy that early on. And as for baseball, I think we should go ahead and give you an honorary gold glove for efforts.

Layne Martin: If only!

Amanda Brummitt: So Layne, you have a long and rich history in both the finance and the distribution sides of pharma. So a real vast knowledge of all the players. What made you choose Morris & Dickson when you were deciding to make your next move? 

Layne Martin: Well, I found the Morris & Dickson folks in 2002 at a time when they were in a position that’s not all that different from the specialty story I just told back in the early days of the market, they were pretty well behind their competitors in the specialty space.

Just as in 2007, I think there was a market that was right for a disruptive message. It was an exciting place for me to go. Pharma, they’re not overly happy with this highly consolidated, vertically integrated, model in the distribution space right now. And providers, I think aren’t generally convinced that the industry consolidation is doing as much to help them as it is to enrich the investors and market aggregators or, and distributors themselves.

The Dicksons have proven to me time and time again that they both have the ability and the willingness to invest in this space. And they, generally speaking, asked me to help guide them along this path as we try to grow into this marketplace. So it’s been an amazing opportunity for me to come and innovate again as a market disruptor, this time maybe with the benefit of a little bit of experience. 

Amanda Brummitt: Yeah. So you mentioned the Dicksons. So as I understand, Morris & Dickson is a very old company, like even late 1800s, and the Dickson family still runs it. Is that accurate? 

Layne Martin: That’s right. Yeah. It’s been around since 1841, so you know they have a nice legacy to point to.

And there are three of the Dicksons, I believe it’s a seventh or eighth generation. The three of them are involved in the business today in various leadership roles and I get a chance to interact with them. This is a privately held business, so no outside kind of stuff on their cap table.

So I get a chance to interact with the Dicksons every day and we’re building a business together. 

Amanda Brummitt: Very cool. Very cool. I don’t think we run into that a lot these days, so I like it. 

Layne Martin: No, that’s, it’s true. 

Amanda Brummitt: Yeah. So tell me about their specialty pharma distribution. If you’ve got your 6o second or 30 second elevator pitch, what is it?

Layne Martin: The elevator pitch really is that we truly understand and appreciate the role that an infusion center plays in disrupting some of the older and costlier care delivery models out there. Helping to deliver care to patients in need. We’re deeply committed to the mission of helping these infusion businesses create sustainable business models in support of their patient care goals.

If I think about what that means, I don’t know, that’s my elevator pitch, right? But if I think about what that means, I think it’s about ensuring that they get a quality distribution service model. Make sure that if something goes wrong, that we’re invested in making it right. And like who are you gonna, can you actually call somebody and get someone to help when there’s a problem? Because there will be issues, right?

Amanda Brummitt: Sure. 

Layne Martin: And then obviously by using some of that McKesson experience I referred to earlier, we wanna really ensure the ongoing stability of the Buy & Bill market as a whole. Help them know there’s novel therapies that are coming to market or maybe help them understand when there’s a loss of exclusivity product coming, maybe there are alternatives that can help them save some money. Or even advocate on their behalf with pharmaceutical companies to try and help them get access to some of the limited distribution products that can sometimes really vex these providers.

Amanda Brummitt: Wow. Okay. So almost like a consulting role built within the distribution. 

Layne Martin: That’s how we really wanna approach it, right? Because I think that the unmet need in the market is that folks want someone who really is trying to help, not just trying to monetize them. 

Amanda Brummitt: Yeah. Yeah. So you mentioned when things go wrong, and I have heard about your old chain distribution trucks. Can you tell us about those and when people might need that?

Layne Martin: We do think this is a differentiator for us. By virtue of the model that we have, you know we are, this business has been traditionally located in the southeast region of the United States. We are now a national distributor, our primary distribution operations are in Shreveport, Louisiana, and soon to be in Memphis, Tennessee.

Because of the historic nature of this natural geography, all of our distribution operations with our own seat of fleet of trucks. That gives us an advantage. We’re reaching 13 states out of one building using our own fleet. So we never have to worry about whether our trucks are getting out on the road when there’s a storm or snow or ice or anything like that.

This business gets out and our trucks hit the road every day no matter what. So there is a certain something to that. We take advantage of that opportunity to make sure that we’re able to deliver every single day. And I mentioned our willingness to invest, by virtue of the fact that we’re not a public company or not the public capital markets, we’re not chasing that kind of scale and efficiency target that you never seem to reach, right?

So we don’t mind investing in quality around our coaching capabilities. We use a great partner called AeroSafe Global that we signed up with last year. We use them for all of our outbound deliveries. When there’s a cold chain pack out gives us a 72 hour rated pack out. So this product can sit for over a weekend if it has to.

And if we did around a Friday and the customer can’t get around till a Monday, they’ve got a qualified pack out for 72 hours. They’ve got all the data that show that whether their product feels warm, we can actually show them that that their product stayed at temperature the entire 70 hours, 72 hours, that it was in that packout, and we can help assure them that this product is safe and ready to use no matter what.

These are the kinds of things that, like if you really were only going for efficiency, you might not do.

Amanda Brummitt: Yeah. And these drugs are thousands and tens of thousands of dollars, right? 

Layne Martin: Yeah. This whole supply chain is built around high value products that you need to be very precise and you gotta be on time and you gotta make sure you come to work every day.

Amanda Brummitt: Yeah. Do you find that being privately owned allows you guys to be a little bit more nimble, like when you see a shift in the market and you need to do something about it, are you able to move more quickly? 

Layne Martin: We certainly work to that. That’s always something that you strive for, right?

I mean, as opposed to striving for scale or efficiency, we certainly strive to be nimble every day. I think we do a pretty good job. The things that matter to them is they wanted someone who was willing to invest in carrying a little bit more supply of product because these products sometimes can have market shortages for supply of the drug. Carrying a little bit more on hand than maybe makes your finance person happy. That’s one of the things that we’re willing to do. And that’s, in a way, that’s nimble, but that’s really just around what is the thing that the market needs. And what are you willing to do to support that? That’s helping support pharma, but honestly that’s really supporting the patient because in moments when these products go on short supply, if you’ve got extra couple months of supply at these of this product, you’re able to weather these supply chain disruptions that do inevitably happen.

The market is seeing these time and time again in the last several years. So that’s the kind of thing in helping everyone succeed instead of whether you make your quarterly number or not. 

Amanda Brummitt: Yeah. I could not imagine being one of these patients with a debilitating autoimmune condition and fearing whether or not we could get my drug sounds terrifying. 

Layne Martin: That’s the thing.If there’s one thing that makes me lose sleep at night is that if you ever realize and you’re talking to a provider and you see that you failed them in that respect and they had to turn a patient away. That’s just the thing you don’t wanna do. That’s our true north, if you will.

Amanda Brummitt: Definitely, that’s a really good illustration of one of the many challenges that infusion centers face. What do you find is the biggest challenge within specialty pharmacy?

Is it a certain drug, a certain process? 

Layne Martin: No. I guess I’d say a lead there. We always wanna lead with curiosity in these things. Number one thing for me is I wanna always listen and learn for the folks that are closer to the patient than I am. So I guess, in some ways, if anyone out there has a chance to talk with me, I’d love to hear what they had to say.

The feedback from our customers right now mostly focuses on gaining clarity and transparency. What products they’re eligible to infuse, which ones are not. So are there incentives in place that pharma has put out there that they’re eligible for, that maybe aren’t aware of?

So these are really issues. This a lot of the times, this comes down to just that partnership, right? I think there are bigger competitors out there in which you were, these customers tend to be small fish in big ponds, so are they getting the attention? Are they hearing about stuff? Is there a conversation happening between the infusion center and or distributor?

Our thesis is, and we’re hearing that oftentimes there’s not. We are really out there looking to support our customers’ bottom line. And, we’ve created some mechanisms to help with that. We have a GPO (group purchasing organization) called BeaconMD that we started up last year that is really designed to get access to all of the different incentives and pricing and rebate programs that are out there. And so we can bring those programs to bear for our customers and make sure that they are aware of the incentives that they have available to them. 

Amanda Brummitt: Yeah, definitely. And just, for anybody that’s new to getting into the industry or dipping their toe in it, how do those work?

Are we talking about a percentage of savings or–

Layne Martin: It’s a menu. I think when you’ve seen one, you’ve seen one. 

Amanda Brummitt: Okay. So they need Layne so they don’t have to navigate it?

Layne Martin: Yeah. Oftentimes, the first and foremost, there’s always an off-invoice discount that’s involved, right?

So there’s some amount of invoice. These are going to be pretty, traditionally in the Buy & Bill market, you’ve got these contracts that have a price that changes along with the reimbursement, the ASP (Average Sales Price) of the drug, right? So it floats with that value. And then there’s always some amount of some minor rebate on the backend that the pharma makes available to the member for performing in some way that the manufacturer wants.

So we don’t necessarily, well we don’t dictate any of that. We really are facilitating the program the manufacturer puts in place. There’s usually some combination of an off-invoice discount. That allows a margin for the provider and then some amount of rebate in support of the manufacturer’s goals.

Amanda Brummitt: Okay, awesome. Thank you for that clarification there. With your 20+ years experience, what would you say is the biggest light bulb moment you’ve had when it comes to the needs of infusion centers? 

Layne Martin: Yeah. It is really, to me, I guess the light bulb, if you were to be pithy about it, it turns out that the best way to build a meaningful supply chain is to find a way to be valuable to everyone up and down the channel from you.

So, in this case can you create a way to make people wanna do business with you again? So the label moment from, if I think about pharma, do I help them to design a supply chain that drives value down to the patient and the provider. If I do, then I’m more likely to get repeat visits from them, and they’re more likely to ask me something about the voice of the customer.

How should they think about bringing their next drug to market? That gives me a certain benefit because if I’m able to have that conversation with a pharm and I’m usually able to bring my customer’s point-of-view to bear and I think about it as an infusion center.

I think, just showing them that we are as interested in their bottom line as we are on our own. This is about sustainability. Smaller infusion centers, they’re often, like I said, they’re left to be small fish in big ponds a lot of times, which is really unfortunate. And that you think about a lot of these infusion centers are serving remote or rural patient populations and they may lack options in their care. That really is the way we try to approach all these things. And if that’s a lightbulb then so be it. But, we really are trying, that was the a-ha moment maybe as we started to make that turn in McKesson several years ago from innovating disruptor to, oh, this is when we learned that was the key to getting to be a more established player in the market. And the challenge becomes how do you stay that way once you become a leader, innovative and disruptive? I guess I’ll see if I get to find that out later on, but right now we get to be disruptive and we’ll continue to act that way. 

Amanda Brummitt: Yeah. I’m gonna check in with you in two years. 

Layne Martin: Please do. 

Amanda Brummitt: So I understand from Reece that Morris & Dickson has joined WeInfuse’s Distributor Connect Program and so pretty soon your mutual clients will be able to eOrder directly within the WeInfuse software platform. Can you tell us about how that will work? 

Layne Martin: Yeah. I’m certainly one of the last people out there you’d wanna talk tech with. Yeah, I’m going through this process right now. I’m learning as we go, but yes, that’s right. My understanding is this is an eOrder that gets generated and I think WeInfuse then goes in and pings my distribution center to make sure that there is actually supply on hand and that we’ve got enough to fulfill.

And once that’s confirmed, the customers didn’t have the opportunity to confirm and place that order by EDI to us. So it comes to us electronically and then they get certain communications back from us confirming the order receipt and we’ll give status updates when it’s been shipped, when it’s been received, all that good stuff.

It’s a pretty amazing tool that really helps to streamline this entire process that can otherwise be pretty clunky. We learned about WeInfuse sometime mid-year, last year and it was a quick adoption for us. We’re like, this is the kind of innovation that I think really helps providers and if it can help us to participate with them, then that’s all the better.

Amanda Brummitt: Nice. Yeah, I couldn’t imagine trying to buy the medications in one system, bill a patient in another system, care for the patient in another system, and as many moving parts as there are in infusion and as tight as margins are on some of these things that everything being connected just seems to make sense to me.

Layne Martin: And if you spend any time, look at some of these folks that are the pharmacist or the practice administrator or there’s always that person there who’s having to do this task. Those people have a lot of demand on their time. So if we can, you can improve that, then they get closer to caring for the patient and let surround the administrative burden running that practice.

Amanda Brummitt: Definitely. Because I promise nobody went to pharmacy school or nursing school so that they could place orders for drugs and figure out how much it costs. 

Layne Martin: Yeah, it’s true. 

Amanda Brummitt: Layne, what are you most excited about right now in the infusion industry?

Layne Martin: I think I’m most excited about, there’s an incredible number of novel therapies that are coming to market that will address, oftentimes, clinically unmet needs for patients. This explosion of interest in the infusion center market really comes in a great time.

There’s just so much happening. Some of the Alzheimer’s price and Myasthenia gravis (MG) products, and there’s all these neurology indications that are being addressed in new ways. And it’s really amazing that patients dealing with these conditions now can have some options around getting a more convenient infusion experience administered by a trained professional as opposed to going into an acute care hospital setting, which is just maybe not the same kind of a level of convenience and support for them. So it’s reminiscent of what we saw early days in the oncology community clinics setting in the early 2010s, is a shift in the site of care. For patients it was coinciding with the boom in the number of novel therapies coming to market. So you saw all of these providers set up community clinics, you address that. I think we’re seeing some of the same in the way some patients are getting therapies. 

Amanda Brummitt: Yeah, I agree. It’s super exciting. If you could give just one last piece of advice to our listeners, what would it be? 

Layne Martin: I guess I’d say keep disrupting, keep innovating, keep offering your patients and your referring physician partners a choice in their care, and maybe keep asking questions of your service providers. I encourage you to look for folks that are as invested in your business and its success as you are.

Amanda Brummitt: Any particular questions that you would say? 

Layne Martin: Talk to me about the next biosimilar product that’s coming out where, what can it do for me? Talk to me about where I am buying a product that I could get an alternative, one at a higher net cost recovery for me. What are the things I can do that can bolster the economic viability of my business? 

Amanda Brummitt: Perfect. Oh, I love tangible advice that people can implement like tomorrow in their practice. Yeah. Thank you so much for all of this information, all your pearls of wisdom, and we’re really excited to have you connected with WeInfuse.

Layne Martin: I’m excited to be here. Thank you. This is a great opportunity to talk a little bit about our business, but mostly talk to the listeners out there. This is why we’re super passionate about this.

Amanda Brummitt: Great information from Layne Martin of Morris & Dickson about specialty pharmacy distribution. I really appreciate his approach in thinking first about what patients and infusion providers need to be successful and the company’s dedication to business practices that put patient outcomes and patients’ needs.

Up front, if you aren’t familiar with the WeInfuse software platform and RxToolKit‘s web-based resources, I encourage you to take a test drive and check them out. Be sure to ask about that Morris & Dickson integration. While you do that, these tools can save you time and money in your practice while making infusions safer for patients and caregivers. My name is Amanda Brummitt, and we’ll catch you in the next episode.