Other companies consider distribution shake-up
Turmoil in the supply chain seems set to continue following a report published this week in The
Times, saying that AstraZeneca will introduce a single-wholesaler distribution arrangement in the UK, following Pfizer's lead.
However, a spokeswoman for AstraZeneca told The Journal that, although
the company is undertaking a review of its supply chain arrangements,
no decision has been reached about a distribution model. “AstraZeneca
has communicated with a number of organisations to see if they are interested
in engaging in discussions,” she said.
The Times also reported that Lilly UK, Novartis and sanofi-aventis are
considering altering their own distribution channels.
Dominic Wake, communications manager at Lilly UK, said: “Lilly
is considering a number of options about how we warehouse and supply
our medicines. We expect to make a decision next year. One option is
to continue our existing arrangements.” He said that the main driver
is a potential reduction in Lilly’s warehousing capacity.
Mike Dent, head of finance, Pharmaceutical Services Negotiating Committee,
commented: “The PSNC has been aware for several months that a number
of pharmaceutical manufacturers have been considering changing their
distribution arrangements. Community pharmacies, particularly independents,
value the support and relationship they have with their full-line wholesalers,
and any changes that threaten this are
unwelcome.”
Mr Dent also said that the PSNC will be seeking discussions with AstraZeneca
and the other manufacturers named in the Times article.
Alex McKinnon, head of professional services development, Scottish Pharmaceutical
General Council, said that the direct-to-pharmacy distribution model
has many long-term implications that have not adequately been discussed
with key stakeholders. He added that it is important to make sure that
patients do not suffer.
He said that problems envisaged with the Pfizer scheme would be compounded
if other manufactures take on the model. The existing wholesale network
provides competition and choice and keeps drug prices down for the NHS,
he pointed out.
Fin McCaul, chairman of the Independent Pharmacy Federation, told The
Journal that manufacturers following Pfizer will fundamentally affect
the distribution of medicines and the way the contract is funded. “It
undermines a contractual arrangement with the Government that is based
on stability within the supply chain, and will have a huge financial
impact on the Treasury.
“We believe the direct cost of the Pfizer scheme to the Treasury
will be £30m with an additional £20m of associated costs
that pharmacies and wholesalers will face.” He said that, should
the AstraZeneca plans go ahead, the estimated cost to the Treasury could
be more than double that if the committed £500m of purchase profit
is to be protected.
A spokesman for Novartis commented: “Novartis understands the range
of direct-to-pharmacy options being pursued across the industry …
[and] is considering all options available to more closely partner with
these critical health care providers, with whom we share a common goal
to ensure secure and effective delivery and use of medicines.”
A spokesman for sanofi-aventis declined to comment.
Roche, a company not mentioned by The Times, is sticking with its current
method of distribution, a spokeswoman for the company told The Journal.
Concerns over Pfizer’s discount structure
Pfizer’s recently revealed discount
terms (PJ, 9 December,
p679) will adversely affect small and medium players and the Government’s
bottom line, according to the Independent Pharmacy Federation.
Fin McCaul, IPF chairman, said that pharmacies purchasing less
than £250,000 worth of Pfizer products per annum will lose
out on 2 per cent of discount that would normally be available
on Pfizer products from wholesalers.
Graham Phillips, commenting on behalf of the IPF, told The Journal: “It
is quite apparent from the discounts on offer that the net effect,
from the introduction of the Pfizer scheme, is the reduced availability
of discounts and this will affect the smaller pharmacy disproportionately.”
The Pharmaceutical Services Negotiating Committee commented: “All
elements of the national funding arrangements, which have been
based on evidence from inquiries and analyses, are based on averages,
and for each individual contractor there are many variables that
affect their particular situation. This is the case, for example,
with local prescribing practices, premises costs and many other
factors. The Pfizer scheme removes, in respect of a significant
amount of product, individual contractors’ ability to negotiate
terms, and there will be winners and losers.
“In calculating the purchase profits available to independent pharmacies
next year, full account [will be taken] of any changes in the average
discount levels for Pfizer products that independents earn. And
if full-line wholesalers adjust their statement discounts to reflect
the removal of Pfizer purchases, this will also be picked up.” |
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