The Pharmaceutical Journal
Vol 275 (Supplement) F09-F10
October 2005

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FIP Congress 2005

Problems associated with medicines selection, supply and distribution

Speaking on 6 September, Richard Bergström, of the Swedish Association of the Pharmaceutical Industry, said that there would be no problems with medicines selection supply and distributions if there was a functioning market. He went on to explain the reasons for the lack of a functioning market. Markets for pharmaceuticals are administered with controls on prices and reimbursements. Selection of products may also be restricted, he said. The main drivers for control within pharmaceutical markets include shortage of funds, public money and tenders.

Discussing ways of approaching the selection of drugs, he emphasised that there is a need for choice because individuals vary in their responses to medicines. A variety of medicines with small differences between them offer a means of achieving optimal effects for each person. The notion of one pill is no longer tenable, and there is a need for follow-on drugs, he said. “The idea that only breakthrough medicines are of value is a myth,” he added. Many valuable medicines are actually examples of “incremental development” (eg, pegylated interferon, new insulins, second generation sulphonylureas).

He went on to describe a recent analysis by Tufts University in the US which had looked at the development of “follow-on drugs” and investigated whether the innovator drug, or “first in the class”, is necessarily the best in the class. One of the study’s findings was that for products approved from 1995–98, two thirds of all “me too” drugs were in phase III development before the so-called first-in-the-class drug was approved. “It is therefore not fair to say that companies are copying. While copying was a feature of the 1970s and 80s, exclusivity time now is extremely short,” he said. Several formularies also provide coverage for a high percentage of follow-on drugs. For example, the British National Formulary covers 75 per cent of first-in-class drugs and 85 per cent of follow-on drugs, he added.

“But do we need any more drugs,” he asked. Although uninformed opinion suggests not, a recent World Health Organization report, entitled “Priority medicines for Europe and the world”, identified considerable gaps in unmet therapeutic need, he said. In developing countries, it is evident that effective treatments are needed not only for conditions like malaria and tuberculosis, but also for chronic conditions existing in western countries such as cardiovascular disease, cancer, osteoarthritis and diabetes.

He called for a rational approach to drug selection and use. Governments focus on the quantities and costs of drugs needed in their populations and concerns are raised if their country uses more of a certain drug than another country with a similar population and disease profile. “However, it may be more rational to look at health outcomes,” he said. “A country using relatively large quantities of, say, simvastatin, may be achieving target lipid levels and reductions in ischaemic events and mortality.”

“The question is how much you are willing to invest in health,” he said. Investing in health, he explained, means setting a quality target based on medical evidence and offering a choice of drugs with clear treatment goals and measuring outcomes. “The volume and cost will be what it will be.” Where there is not enough money, rationing must be implemented. This involves selecting drugs of maximum value and ranking patients according to need. “However, it is wrong to pretend — as some governments do — that everyone will get what they need and that the best treatment is being offered,” he said.

Concluding, Mr Bergström said that choosing the right medicine is about what is best for each patient. Quality targets should be developed to drive the market, which will in turn manage demand and supply. Too many interventions in the market will jeopardise correct choices and supplies. More worryingly, insufficient reward for innovation will threaten long-term commitment to R&D.”

Drug procurement in developing countries — a case study in South Africa

Mandisa Hela, of the Department of Health, South Africa, focused on drug procurement, using South Africa as a case study of a developing country. In South Africa, she explained, drugs are selected through the essential medicines programme with therapeutic committees managing selection for specialised needs. Acquisition occurs through open competitive bidding by generic name with price, followed by lead time, as the main determinants. The product must be registered with the regulatory authority and distribution occurs mainly through warehouses, she said.

She told congress participants that evidence-based decision making is beginning to drive selection, but there are problems with finding evidence. There is a dearth of good quality evidence for older medicines and paediatric medicines. Epidemiological data can be difficult to find as can trade information such as patent expiries and registration of generics. Cost benefit analyses are difficult to conduct in a developing country environment, partly because of a lack of people with the relevant skills.

Drug prices have generally been 40 per cent lower in the public than the private sector, although this trend is now being reversed, she said. Generic penetration and competition are vital for driving prices down as is more strategic sourcing, particularly for older medicines and conditions specific to South Africa. New forecasting tools for utilisation are also required, and trends need to be tightly monitored in partnership with suppliers.

Highlighting the need for better pharmaceutical intelligence and price negotiation skills, she said that pharmacists should have a thorough knowledge of disciplines such as pharmacoeconomics, epidemiology, biostatistics, logistics management, contract law and risk management.

Teaching these subjects at undergraduate level would help to address the country’s needs, she added.

“Improved accessibility, affordability and quality of medicines can best be achieved by having the right numbers of people with the right skills,” Ms Hela concluded.

Improving the health of aboriginal Australians

Lance Emerson, of the Pharmacy Guild of Australia, used Australia as a case study to look at the problems associated with the supply and distribution of medicines in a developed country. Mr Emerson said that although many developed countries are currently focused on quality use and rational use of medicines, a more critical and often unrecognised problem is the adequate supply and distribution of medicines, particularly where there are cultural, geographic or financial barriers.

He explained that although Australia is one of the richest countries in the world, it has made poor progress in addressing the needs of aboriginal Australians. Their life expectancy is significantly poorer than the majority of the 20 poorest countries in the world. Aboriginal people suffer huge educational disadvantage and poverty. In remote areas, unemployment is 95 per cent and in cities is around 5 per cent. The average income of Aboriginal people is 65 per cent of that enjoyed by other Australians, he said.

Cultural barriers, including the existence of 250 Aboriginal languages, often deny Aboriginal people access to mainstream health services. Eye contact is culturally unacceptable and communication demands concise answers. These barriers are exacerbated in remote Australia, where huge distances and transport problems limit access to health services, including doctors and pharmacists. While these barriers are commonly encountered in many developing countries, among developed countries they are most noticeable in Australia, he said. Lack of access to medicines is also illustrated by the fact that before 2000, government expenditure on medicines for Aboriginal people was only a third of that for non-Aboriginal people.

Mr Emerson described a scheme which has revolutionised access to medicines, particularly in remote Australia. Developed by the Pharmacy Guild of Australia, in collaboration with the National Aboriginal Community Controlled Health Organisation and the Australian government, the scheme allows for the supply of medicines at the point of care. In contrast with the previous situation, the remote village now has a medical store run by a health care worker who has been trained by a pharmacist on the uses, side effects and administration of medicines. The health care worker provides counselling in a patient’s own language and dispenses repeat prescriptions. Medicines are ordered in bulk and despatched by the nearest community pharmacy, usually by air because of the distances involved. This new scheme had led to an increased use of medicines, he said. However, there are no data yet on population health outcomes.

Supply, of course, is only part of the picture, he emphasised. Aboriginal medical service staff need knowledge and skills to provide medicines to patients. They also need help in developing and maintaining appropriate storage facilities. To provide further help to the Aboriginal medical services, the Pharmacy Guild has secured government funding to allow community pharmacists to become involved.

Two pharmacist roles have evolved, he explained. The first is where a pharmacist consultant visits a medical station four times a year. The pharmacist provides no direct dispensing service to patients, but acts as a clinical adviser and educator, providing compliance aids, helping with stock control and maintenance and training health workers in medicines and disease monitoring.

The second role is where a pharmacist is permanently on site. Employed by the local community pharmacy, which also supplies the medical service’s medicines, these pharmacists act not only as consultants but also have direct contact with patients in dispensing, counselling and medication reviews, he said.

During the past six years, the number of Aboriginal pharmacists has doubled. Scholarships are now being offered to both Aboriginal pharmacists and pharmacy assistants and there is information about the pharmacist role in newspapers and on television. Significant government funding has been allocated to expand the scheme to further areas.

“The Pharmacy Guild has put enormous effort in to this scheme. But it is vital. Pharmacy needs to find solutions to supply and distribution problems — or others will,” concluded Mr Emerson.

New models of drug distribution described

Per Troein, of IMS Health, UK, gave an overview of the different models of drug distribution world-wide. Overall trends in all countries are similar, but drug distribution models are changing, with drugs reaching patients through many different routes, not all of which involve traditional wholesalers or community pharmacies. Mr Troein said: “The reasons for this are mainly economic. Payers want to reduce their costs and entrepreneurs want to earn a greater margin.” Other factors include liberalisation of trade and patient convenience.

He identified three key trends of note in the dispensing process. The first is the increase in pharmacy chains. These can be anything from corporate chains with a single brand name throughout the country to buying groups or franchises, small local chains or supermarket pharmacies. In the UK, chains are well established, and they handle 21 per cent of the total dispensing volume, he said.

A second key trend is the increase in mail order, especially in the US, where the pharmaceutical benefit management system provides an incentive to the patient to use mail order. In Europe, he explained, mail order is available to a much more limited extent — mainly for lifestyle drugs, such as Viagra. However, it is taking off in Sweden and also in Germany. Mr Troein described one German mail order company, DocMorris, which has 0.5 per cent of the total German market.

He told congress participants that DocMorris patients do not use mail order because of the logistics of home delivery, nor do they order on the internet. With a turnover of €150m, DocMorris has 500,000 patients, of whom more than half are over 50 years old. Most live in urban areas, most have chronic diseases and what they like about DocMorris is the perceived added value in terms of information about their medicines, he said.

He went on to discuss the third and most significant trend in the dispensing process, which is related to specialty products and the ways in which they are distributed. There is an increase in hospital outpatient dispensing in many countries, for example, in both the UK and Portugal, where the growth rate is 15 per cent per year. In Italy, a “direct to patient” service, by-passing both wholesalers and community pharmacies, operates for a limited number of drugs, all of which are expensive, he said. Targeted at outpatients, this service saves 50 per cent on drug costs. In the UK, the homecare service market, which is also in high-cost, low-volume products, is worth $500m. Of note in the Netherlands is the advent of specialist pharmacies offering home delivery of specialist medicines in which the manufacturer will make an agreement with one pharmacy to take care of a product and its delivery to the patient.

Mr Troein concluded by saying that there are many positive elements to these changes, including patient convenience and expert support. “Although few prescriptions are currently going through these new channels, the market is expanding, particularly for specialty drugs. Community pharmacists need to learn from these trends and be prepared to offer similar seamless services to the patient,” he said.