Small manufacturers speak out over changes to distribution
Small manufacturers' ability to compete following recent and proposed changes to the distribution of medicines may be under threat, according to Keith Davies, UK logistics manager at ProStrakan, speaking at the British
Association of Pharmaceutical Wholesalers' annual conference in Marlow, Buckinghamshire, last week.
“What we had was a successful way of delivering medicines to patients,” he
said. “If we lose the mixed economy there is a real risk that niche
products made by small companies on narrow margins will be at risk.”
Mr Davies added: “It is significant that 80 per cent of the medicines
dispensed by the NHS are produced by companies with a turnover of less
than £50m. And yet we are facing a change that seems to be dictated
by people in the minority.”
He said that the Ethical Medicines
Industry Group (EMIG), of which ProStrakan
is a member, has submitted the view of small manufacturers to the Office
of Fair Trading for its market study into UK medicines distribution.
In its OFT submission, EMIG — a trade association representing
small to medium size and emerging pharmaceutical companies — voiced
concerns that these changes will impact negatively on smaller companies
and their ability to provide valuable and essential medicines to the
NHS.
EMIG chairman Leslie Galloway commented: “We believe wholesalers
will struggle to maintain the level of service they have been able to
give to pharmacies and hospitals. Wholesalers are already moving to next-day
deliveries from the twice-daily service that has become the standard.
Once wholesalers realise that reducing their delivery service does not
replace the lost margin from the distribution changes, they will seek
to raise the discount level from the vulnerable small to medium size
companies. These changes will result in a lower level of service to patients
with the potential for delays in patients receiving vital medicines.”
The group maintains that smaller companies would not be able to make
the same changes as those proposed by some larger manufacturers, and
could therefore suffer detrimental impacts should the overall wholesaling
model change in the UK.
“We believe the OFT announcement is timely as increased costs are
already being imposed on smaller companies,” said Mr Galloway, “and
these costs will rapidly make the supply of specialist products prohibitive.
Smaller companies would need to increase their prices, which would probably
not be possible in agreement with the Department of Health. It could
therefore mean they need to withdraw niche or unique products from the
market.”
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