The Importance of Independent and Specialty Distributors Throughout the Pandemic

The pandemic provided its share of challenges for the healthcare supply chain throughout 2020. As health systems scrambled to meet demand brought on by COVID-19, distributors and manufacturers were also asked to adjust to the threat level created by the novel coronavirus. It required resiliency, creativity, and an ability to source—and qualify—excellent product.

True to form, independent and specialty distributors demonstrated their agility. “They went beyond their specializations and provided the best possible products to their customers,” said Mark Kline, Chief Commercial Officer for NDC, Inc., a healthcare supply chain company serving multiple markets. “Independent distributors offered the flexibility to change to the models necessary to meet demand.”

Supply chain models have evolved over the years from large inventories to just-in-time inventory to stockpiles; and now, the healthcare industry is planning for a post-pandemic model.

“The networks and connections of independent distributors positioned them to broadly serve health systems across the country,” said John Cook, Vice President of Sales for NDC. “Their contacts in local communities and regional areas allowed them to operate quickly. Plus, their associations with governments, emergency management departments and healthcare organizations created their agility in the marketplace.”

These relationships proved vital to health systems receiving products and resources in a timely and cost-efficient manner during the height of the pandemic, according to Kline and Cook.

“Distributors are an extension of health systems for having resources on hand,” Cook said. “Clinical coordination requires distribution representatives to make sure proper training is occurring on products given to those caring for patients.”

Cook added that distributors must serve as a full-service clinical supply chain team and not just as a product provider. “Sales teams must be educated on the clinical needs of the health systems,” he said. “It’s important to bring the right model fit to customers post-pandemic.”  

Just as distributors are an extension of health systems, NDC acts as such for distributors. It has evolved into a unique healthcare supply chain company serving the acute care, physician, extended care, physical therapy and veterinary markets. It provides comprehensive and customized master distribution and logistics solutions for more than 1,500 distributors and approximately 400 manufacturers.

Its history as a small buying cooperative of independent healthcare distributors lends itself to NDC offering a specialized collection of business services and tailored marketing tools to its customers. 

NuEdge Alliance gives NDC its own GPO

The contract process can be intimidating and complex. We had to simplify the process and build a program of attraction for all supply chain stakeholders, said Dave Rose, Vice President of Business Development for NDC.

While larger group purchasing organizations (GPOs) focus on hospitals, NuEdge Alliance, NDC’s own GPO, offers both end-user customers and distributors meaningful contracts applicable to non-acute care markets. “It’s our sweet spot,” Rose said. 

“NuEdge developed a new competitive edge for independent distributors,” he added. “It’s easy for distributors to enroll their customers on our platform and identify contract opportunities.”

Membership Enrollment is completed quickly online and membership for distributors’ customers is available at no charge without any on-going fees. 

“We worked with our parent GPO – Provista/Vizient – to improve the engagement through our intuitive program,” Rose explained. Plus, NuEdge developed its contract alignment program so that distributors can elect to outsource their rebate process of alignment. That makes it easier for distributors to report through NDC. 

Rose described GPO contracting as complex on the surface from nuances to requirements to rebates to reporting and management of denials. But NuEdge is designed to ease these contracting pain-points for its partners.

“We developed a process to access contract pricing essential for independent distributors to compete nationally,” Rose said.  

NuEdge helps facilitate over 9 million in rebates during 2020 for its 90 distributor members at an average of approximately $113,500 rebates per distributor. “That’s meaningful to our member providers in controlling supply and equipment costs,” Rose emphasized.

NuEdge Connect is a special aggregation program that brings product focus and volume pricing to our authorized distributors. Manufacturers receive marketing assistance to distributors and unique product solutions are given to providers.

Rose said NuEdge continues to grow its Connect aggregation program and an ancillary services program called NuEdge Business, which launches soon. It will help all supply chain partners through non-product portfolio management like credit card processing, shipping and fleet program discounts.

Rose encouraged independent distributors to keep an open mind as to what a GPO can do for their business and customers.

“Put your foot in the water,” he said. “If you’ve never worked with a GPO, then NuEdge is a great partner to start with. Our business environment is constantly changing. The team is experienced, capable and understands best practices for leveraging contracts for profitability and competitiveness.