The Pharmaceutical Journal
Vol 278 No 7449 p475
28 April 2007

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News summary

AZ follows Pfizer into direct-to-pharmacy distribution

AstraZeneca this week confirmed that it would adopt a direct-to-pharmacy model to distribute its medicines within the UK, using two wholesalers — AAH Pharmaceuticals and UniChem — as its “agency partners”.

AstraZeneca says that by appointing two agents choice is maintained, minimising disruption to customers.

Last year, in response to UniChem’s single-distributor arrangement with Pfizer, AAH managing director Steve Dunn said that AAH had put the interests of its customers first by refusing to sign a deal with Pfizer that would create an unprecedented and monopolistic stranglehold on the market. He told The Journal then that Pfizer’s arrangement would be a disruption to the usual supply chain and create multiple invoices and deliveries for pharmacists (PJ, 7 October 2006, p413).

However, Mr Dunn defended AAH’s deal with AstraZeneca at the group’s convention this week in Singapore: “AAH supports manufacturers in their desire to evolve their business models. We wish to work with manufacturers to ensure that this happens in a mutually beneficial way; but we will not support solutions which put at risk the integrity of the supply chain or which are implemented to the detriment of pharmacy and pharmacists.” Mr Dunn confirmed AAH’s continued opposition to a single-distributor model (see below).

David Coles, managing director, UniChem, said that UniChem’s involvement ensures “ease of ordering and frequency of delivery via a tried and tested logistics infrastructure”.

Scottish Pharmaceutical General Council chairman Martin Green said: “SPGC is extremely disappointed at the timing of AstraZeneca’s announcement following on so closely from the notice of intent by the Office of Fair Trading to conduct a market review of medicines distribution in the UK. We feel, it would have been better if AstraZeneca had waited until the OFT had completed its review before taking these steps.”

John D’Arcy, National Pharmacy Association chief executive, said: “Our members will now have another layer of administration to deal with, distracting them from patient care. We would also disagree with AZ’s assertion that choice is maintained. With only two wholesalers included choice is definitely reduced. This is a further nail in the coffin for the smaller wholesalers.”

Lindsay McClure, head of information services at the Pharmaceutical Services Negotiating Committee, told The Journal: “No information is yet available on proposed discount terms. The national contract guarantees community pharmacy £500m income from buying profit, measured at the level of independent pharmacy, and it is a major priority for PSNC to ensure that this funding is delivered. PSNC is seeking to meet with AstraZeneca at the earliest opportunity.” Community Pharmacy Wales also said that it wished to discuss the proposals with AstraZeneca.

AstraZeneca intends to implement its distribution model late in the summer. Findings from the OFT short market study (PJ, 14 April, p415) are expected by the end of the year.