The Power of Distribution

Tyler Whisman
November 10, 2023

After a short sabbatical, Medical Affairs Weekly is back!

As always, thank you for your continued support. And a reminder that you can access the past editions at www.medicalaffairsweekly.com

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For those of you in Field Medical roles

When you are doing account or customer engagement planning, how do you prefer to document?

Before 2022, PRIME Hydration didn’t exist.

Just this week, the team behind the product announced they were on track for $1.2 Billion in sales this year. Even at a ridiculously overpriced $2 per bottle, that is a staggering figure.

Objectively, the drinks taste awful. And there’s plenty of debate on whether it’s actually effective at hydration. Nevertheless, if you have young kids like me, odds are, you’ve heard of the PRIME.

I’ve contributed more than I care to admit to the sales figures above. After a spring baseball game, we provided drinks and a snack for my son’s team. We gave the boys PRIME, and the reaction rivaled Christmas morning. For different reasons, I too am obsessed with the brand.

My son is 10, and I’d venture to say he knows more about PRIME than any other kid his age. I’ve used it to teach him business lessons, and his obsession with the product keeps him interested. We’ve spent hours discussing it.

One of the lessons had to do with distribution.

PRIME’s rapid ascent in a fiercely competitive and saturated category is directly attributable to creators Logan Paul and KSI. The pair are probably best described as YouTubers and come with a fair amount of controversy. Still, they have massive audiences.

Their product lacks differentiation, yet the product is wildly successful due to their distribution.

Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true. No matter how strong your product - even if it easily fits into already established habits and anybody who tries it likes it immediately - you must still support it with a strong distribution plan.

Peter Thiel

So, what does this have to do with Medical Affairs? Quite a bit, actually. Especially for those within Field Medical. If that’s you, you're in the business of distribution…

Borrow, Build, or Buy?

From the perspective of an organization, distribution is like oxygen. It’s required for survival.

With that, there are three means to effective distribution. They can borrow it, buy it, or build it. Each has its place, depending on the circumstances.

A company could borrow distribution by leveraging a team of contract MSLs. Theoretically, they have existing relationships where they’d be needed and could be used accordingly. They could also partner with another company, something not uncommon in our industry.

Most companies will want to buy or build the distribution themselves. Neither is inherently better. Which approach is chosen typically depends on the timing and resources available.

A company that is years from a product launch has time to build its own distribution. Conversely, a team with a shorter runway to launch might be forced to buy distribution.

To be clear, buying distribution, in this case, refers to hiring individuals who have established relationships in the therapeutic area of interest.

With this in mind, how should you use this to your advantage? In my opinion, it ties in with my recent newsletter on The Case for Specializing.

The relationships you possess and develop over time are an important component of your specialization.

If you’re starting out, be intentional about the therapeutic areas you pursue. There’s nothing wrong with trying to get experience, as your skills will be transferable. That said, if you’re able to be picky, choose a therapeutic area you’re committed to for the long run. Your relationships will compound over time.

Conversely, if you’re a seasoned Medical Affairs professional, I would encourage you to be intentional about the companies you work for. Ultimately, you “own” your relationships. They do not sit with the company you represent. However, you can enhance your relationships by working for companies that consistently meet the needs of your customers and their patients. Here, you’re being strategic, so your value to the customer always increases. If you do this correctly, the customer will have loyalty to you. This provides tremendous leverage when companies are in a position to buy distribution. You may think your value is the set of skills that you bring to the table. But their only value is that they have allowed you to develop strong relationships and become an effective means of distribution.

To sum this up, based on where you are:

Build = Focus on the Therapeutic Area you choose to work

Buy = Focus on the Company and Product/Pipeline you choose (assumes you’re staying in the same Therapeutic Area)

Let’s revisit PRIME. When I asked my son why it was so successful, he gave the answer I was expecting. It was something like, “his (Logan Paul) audience is so big, anything he tried to sell would work!”

I countered with, “then why didn’t BioSteel work?” Again, his answered with the response I was exptecting, “I’ve never even heard of that.”

The face of BioSteel is the second-best Quarterback in the NFL (Joe Burrow fan here) and its most popular athlete, Patrick Mahomes. NBA Player Luka Doncic was another one of their sponsored athletes. Still, they recently filed for bankruptcy.

The lesson here is that the audience provides the platform or permission to execute. But make no mistake about it, it’s not sufficient by itself.

Bringing this back to Medical Affairs - your company, or the product(s) you’re supporting might open some doors, but it’s up to you to capitalize on the opportunities provided.

Make your relationships your priority. They are like currency, especially in this line of work. Understand that you can take those relationships with you, and as I mentioned, if you specialize, they can compound over time.

That means you show up at every interaction with the long term in mind. Ensure each engagement brings your customer value and routinely check in with them to confirm their needs.

In an industry where things are always changing, the importance of distribution is one constant. The industry’s ability to reach important customers is a pressing issue. One made worse by the pandemic.

Companies restructure all the time and each iteration is their guess on how to maximize their distribution channels, nothing more. So, if you want to have longevity in this industry, you know what to do.

In summary, you are in the business of distribution. You might not see it that way, but trust me. Understand that attention is scarce and, as a result, incredibly valuable. Use that to your advantage. Specialize. Provide value. Invest in relationships.

Now might be a good time to check in and see if there’s anything you’d like me to write about. Just reply to this email with your suggested topic.

Personal Finance for Medical Affairs Professionals or Transitioning to Leadership will likely be the focus for next week. Let me know if you have a preference!

Until next week,

Tyler

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