如何进入英国医药市场的.ppt

1、Where is Distribution Going in the UK?,GHP Procurement and Distribution Interest Group, 7 June 2007, Coventry Donald Macarthur Industry Consultant on International Pharmaceutical Business Issues,Unchanged since many decades , but tomorrow?,The classic distribution chain with the wholesaler as the vi

2、tal link,manufacturers warehouse/ prewholesaler,full line wholesaler,community pharmacy,patient,High volume/low margin business, but efficient route from manufacturer to patient and one-stop supplier to pharmacies,235,000 UK deliveries/week by BAPW wholesalers 2 billion items distributed/year,UK dis

3、tribution to retail pharmacies 2005,Number of full-line wholesalers11 Market share of full-line wholesalers 71% Market share of short-line wholesalers 13% Market share of self-distributing pharmacy chains 13% Direct distribution 3%,Breakdown of distribution to pharmacy market, 2004 (source: GIRP),Mo

4、st wholesaling efficiencies have already been realised in UK (2004 vs 1995),Examples of services offered to UK pharmacies by full-line wholesalers,Twice daily scheduled delivery High service levels No minimum order/delivery charge Sales-related discounts Automated order processing 30-days credit IT

5、solutions Emergency supplies Product recalls,Financial services Stock management Own brands Collection of out-of-date products Special handling Collection of packaging waste Merchandising support Promotional literature Education and staff training,Factors favouring wholesaling,Wide product range Cus

6、tomers have limited inventory capacity Customers have cash flow difficulties High order frequency Need for immediate delivery,Threats to wholesaling,Falling sales value with price cuts Margin erosion Higher costs (e.g. staff, fuel, IT, automation) Manufacturers views of wholesalers as margin stealer

7、s rather than distribution partners barrier to closer relationship with pharmacists (and patients) Stock shortages Continuing parallel trade Entry of counterfeit medicines and diversion of genuine products Retail market liberalisation/growth in self-distributing pharmacy chains Increasing unit price

8、s favouring the economics of direct distribution,What is the UK distribution margin for Rx brands?,PPRS: After appropriate consultation, the Department will from time to time indicate the level of margin normally allowable in published NHS prices of supplies distributed through wholesalers. No recor

9、d of what this margin actually is since 1983 when reduced from 15% of value of goods at NHS prices to 12.5%. By custom and practice, 12.5% has been retained. Almost 10% of gross margin given away to pharmacy customers as discounts on brand purchases. Pharmacies in turn have an average 9.5% of reimbu

10、rsement withheld by NHS through clawback.,Effect of pressure on margins,Wholesalers are: consolidating (acquiring local/regional wholesalers) - for economies of scale but limited by EU competition law internationalising - to spread risk of market regulation but no single EU market offering additiona

11、l services (e.g. pre-wholesaling, marketing) integrating forwards into retail - for higher profits and to secure customer base but limited by national laws on pharmacy ownership diversifying (e.g. manufacturing, homecare),Leading pharma wholesalers, 2003,Wholesaling market share (%) of big three, 20

12、05 (Source: Booz Allen Hamilton),Forwards integration into retailing,Total European pharmacy numbers steady, but ownership in some countries has changed dramatically: 3 wholesalers own all Norwegian pharmacies Independent pharmacies in UK are a dying breed Lloyds (Celesio) 1,625; Boots (Alliance Boo

13、ts) 1,500; Co-op 429; Rowland (Phoenix) 384, Superdrug 226; Tesco 197; Sainsbury 143, Day Lewis 100 Remaining independents have formed buying groups to compete with the chains, but the biggest of these Numark acquired by Phoenix. Big three also own pharmacies in Belgium, Czech Republic, Estonia, Ire

14、land, Italy, Latvia, Lithuania, Netherlands, Norway Alliance Boots 2,700 Pharmacies financially dependent on wholesalers in countries that do not allow pharmacy chains: numerous,Europes No 1 mail order pharmacy now owned by Celesio,Parallel trade: wholesalers act like Jekyll and Hyde,Publicly Highly

15、 critical attitude to PIs Privately Wholesalers are both the main suppliers of PIs in the source countries and the main customers for them in the countries of destination Some have even entered the PI business directly (e.g Alliance Boots has parallel trading subsidiaries in the Netherlands (Stephar

16、), Spain (SAFA) and the UK (Cordia, Beachcourse, OTC Direct); its UK retail operation dispenses 600,000 PI packs/month),Market growth increasingly comes from speciality products,US spending on biotech products in 2006 was $54 billion (+21% on 2005 versus 6% market growth with traditional pharmaceuti

17、cals) it is expected to rise to $99 billion by 2010. 23% of all marketing authorisation applications made to EMEA in 2006 were for EU-designated orphan drugs.,Manufacturers views of wholesalers with high-cost speciality products,Fixed margin structure provides disproportionate reward for handling hi

18、gh cost/low volume products. Do not deliver to hospitals at all in number of EU countries (e.g. A, B, F, D, GR, I, P & ES). Exclusively national operation, so being by-passed as more manufacturers seek pan-European distribution solutions. Increasingly distrusted by manufacturers due to vertical and

19、horizontal integration, support for generics and parallel trade.,Manufacturers seek more control over distribution,direct distribution supply quotas relegating wholesalers to agents/logistic providers investigating new distribution models to ensure: product availability at point of dispensing minima

20、l parallel trade/stock diversion cost effective distribution secure supply integrity/traceability closer relationship with pharmacies and patients,GSKs agency distribution scheme in UK Moving closer to our customers,Introduced by Glaxo in 1991-02, continued by Glaxo Wellcome and now by GSK. Hospital

21、 products added in 1997. Rationale: Curtail use of generics & PIs? Curtail power of big wholesalers? Glaxo provided wholesalers with 50 million as margin and preferred to use this to build its own business rather than go to enhance that of wholesalers? Obtain more detailed and faster sales data than

22、 from IMS? All then 30 full-line wholesalers signed up as agents to receive a management fee for distribution and data provision. Glaxo retained stock ownership and assigned discounts to customers. Failed attempt to extend to the Netherlands.,Original concerns voiced on Glaxos agency scheme,By whole

23、salers Fears that management fee would be progressively reduced in 1991, the average fee was 5% of value at NHS prices of Glaxo products handled by April 2005 this % had been cut by almost half from 2007 it changed from % to a fee-for-service basis Added costs, responsibility for bad debts Fears tha

24、t other manufacturers would follow they didnt for 15 years anyway! By pharmacies Lose wholesaler discount Glaxo brands separated from non-Glaxo brands in discount inquiries More paperwork By Department of Health Lose clawback,Pfizers agency distribution scheme in UK (Delivering directly to our custo

25、mers),UniChem (Alliance Boots) sole logistics partner for all Pfizer Rx products from 5 March 2007. 18-month contract. Fee-for-service. Stated aims of change: improve supply management more responsive to stock shortages reduce risk of counterfeit entry improved visibility over supply chain better ab

26、le to trace and recall not to save money All pharmacies and dispensing doctors had to open UniChem account to obtain Pfizer products. 99% have already done so. PSNC satisfied with pharmacy discount structure (5 mil/yr 11.5%). No minimum order. Current twice-daily deliveries maintained. Other full-li

27、ne wholesalers and all shortliners no longer supplied. Pfizer does not rule out having more than one distributor in future.,Concerns voiced on Pfizers agency scheme,Anticompetitive? Decreased customer choice? Nail in coffin for regional wholesalers? Can single channel provide continuity of supply? I

28、ncreased ordering workload and difficulties for pharmacies and dispensing doctors, e.g. opening new accounts, uncertain ordering cut-off & delivery times, time spent reconciling invoices Renders pharmacy buying groups redundant? Reports of quota application at contractor level. Loss of procurement d

29、iscounts? Hidden added costs for NHS? Wholesaler added-value services to pharmacies put at risk. Preferential treatment of Boots? Damaging to environment. Potential for manufacturers who follow to make different arrangements (e.g. once-daily delivery) or for DoH to implement central procurement. Ris

30、ks customer backlash that could hit market share. The pharmaceutical distribution system in the UK isnt broke, so why try to fix it?,Who is next?,Astra Zeneca appoints AAH and UniChem as fee-for-service distribution agents. Scheme to start Q3 2007. Novartis launches tender and to decide by late summ

31、er on whether to change to direct-to-pharmacy. Sanofi-Aventis and Lilly also reported to be considering their options. Last year, Roche said it had no plan to change. 66% of pharmaceutical companies were considering changes to their channel-to-market structures, according to May 2005 survey of Europ

32、ean and global supply chain directors by Accenture.,DoH not content to be interested observer,PPRS encourages efficient and competitive supply of medicines. Joint DoH/ABPI review of distribution margin called for as part of 2005 PPRS. DoH already recipient of annual cycles of financial data from bra

33、nd companies under PPRS and quarterly sales and price data on generics from manufacturers and wholesalers (categories M & W). 500 million/year of purchase profits can be retained by pharmacies in England & Wales under pharmacy contract. Moves by GSK and Ivax to stop discounts on some products = burg

34、eoning ZD list. Voluntary request to PPRS-member manufacturers for quarterly gross and net sales data on brands by customer group (community pharmacies, hospitals, dispensing doctors). OFT market study into medicines distribution in UK announced.,Distribution changes by Pfizer in Europe: Two years a

35、dvance warning were given,Speaking at the International Federation of Pharmaceutical Wholesaler Associations general membership meeting in Shanghai in September 2004 Per Troein (VP Industry Relations, IMS Europe) forecast that Pfizer would move to direct distribution in the EU-5 (Germany, France, UK

36、, Italy & Spain) citing patient safety as justification.,Distribution changes by Pfizer Spain,Dual pricing scheme introduced in 2001 Since 2004 a mixed distribution system has evolved: - direct sales to pharmacies using LSPs - supply contracts with 16 wholesalers out of almost 100 and differential p

37、ricing. Proof that sales within Spain required before refund made between initial price and price for NHS (difference can be 100%) based on (a) Article 90(2) of Medicines Act (price intervention only applies to products dispensed in Spain) (b) Royal Decree 725/2003 which obliges wholesalers to have

38、batch tracking controls and inform authorities of sales destination. Details can be requested on their own products by manufacturers,More distribution changes soon by Pfizer?,Pfizer, the US drugs group, is planning to extend proposed reforms of its UK supply chain across Europe. The US-style reforms

39、 which would force every chemist, dispensing doctor and hospital to buy Pfizer medicines from Pfizer rather than wholesalers, giving the group more control of pricing could be extended initially to Germany and Poland. Source: The Times, February 16th, 2007,Single agent akin to single channel distrib

40、ution,Born out of the wishes of manufacturers Each manufacturer makes an exclusive, fixed-term distribution agreement with one wholesaler, which alone is responsible for meeting all demands in the country for that manufacturers products. Only distribution model found in two EU countries, Finland and

41、 Sweden. Each country has only two pharmaceutical wholesalers today Market shares: Finland - Tamro (Phoenix) 60%, Oriola (Oriola-KD) 40% Sweden - Tamro (Phoenix) 57%, KD (Oriola-KD) 43% Wholesale margin in both countries unregulated (but estimated at 4%) government only controls pharmacy purchase pr

42、ices and pharmacy margins,Pros and cons of single channel distribution,Advantages For manufacturer Lower wholesale margin Lower administrative costs Only one drop-off point Lower credit risk Better inventory control Access to real-time data on realised sales Improved communication and co-operation w

43、ith wholesaler Wholesalers do not need to compete with discounts Recalls are easier No reports of counterfeit entry into either Finnish or Swedish markets,Disadvantages One wholesaler carries the sole responsibility for stocking and delivering a product throughout country Antitrust concerns pharmacies are unable to select suppliers M&A between manufacturers can produce big shift in wholesaler market shares