如何进入英国医药市场.ppt

Where is Distribution Going in the UK?GHP Procurement and Distribution Interest Group,7 June 2007,Coventry Donald MacarthurIndustry Consultant on International Pharmaceutical Business Issues Unchanged since many decades,but tomorrow?The classic distribution chain with the wholesaler as the vital linkmanufacturers warehouse/prewholesalerfull line wholesalercommunity pharmacypatientHigh volume/low margin business,but efficient route from manufacturer to patientand one-stop supplier to pharmacies235,000 UK deliveries/weekby BAPW wholesalers 2 billion items distributed/year UK distribution to retail pharmacies 2005Number of full-line wholesalers11Market 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)Most wholesaling efficiencies have already been realised in UK(2004 vs 1995)countryPop(millions)Full-line wholesalecompaniesWholesale warehousesCommunity pharmaciesFrance5910(16)187(210)23,000(22,300)Germany8216(19)106(104)21,350(21,000)Italy58136(215)254(312)16,800(15,500)Spain4349(106)190(202)20,400(18,400)UK5911(21)59(63)12,200(12,300)Examples of services offered to UK pharmacies by full-line wholesalersTwice daily scheduled deliveryHigh service levelsNo minimum order/delivery chargeSales-related discountsAutomated order processing30-days creditIT solutions Emergency suppliesProduct recallsFinancial servicesStock managementOwn brandsCollection of out-of-date productsSpecial handlingCollection of packaging wasteMerchandising supportPromotional literatureEducation and staff training Factors favouring wholesalingWide product rangeCustomers have limited inventory capacityCustomers have cash flow difficultiesHigh order frequencyNeed for immediate delivery Threats to wholesalingFalling sales value with price cutsMargin erosionHigher costs(e.g.staff,fuel,IT,automation)Manufacturers views of wholesalers as margin stealers rather than distribution partnersbarrier to closer relationship with pharmacists(and patients)Stock shortagesContinuing parallel tradeEntry of counterfeit medicines and diversion of genuine productsRetail market liberalisation/growth in self-distributing pharmacy chainsIncreasing unit prices 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 record 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 reimbursement withheld by NHS through clawback.Effect of pressure on marginsWholesalers are:consolidating(acquiring local/regional wholesalers)-for economies of scale but limited by EU competition lawinternationalising-to spread risk of market regulation but no single EU marketoffering additional 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,2003countryNo 1No 2No 3AustriaHerba/Celesio Phoenix Kwizda BelgiumFebelco Celesio CERP FranceOCP/Celesio Alliance Sante/AU CERP GermanyPhoenix Celesio Anzag IrelandUnited DrugUniphar CMR/CelesioItalyComifar/Phoenix Alleanza/AUFarmintesa NetherlandsOPGInterPharma/AU Brocacef/PhoenixNorwayNMD/Celesio Apokjeden Holtung/AU PortugalAllianceUniChem OCP/Celesio Codifar SpainCofaresSAFA/AU HefameSwitzerlandGalenicaAmedis/PhoenixVoigtUKAAH/Celesio UniChem/AU Phoenix Wholesaling market share(%)of big three,2005(Source:Booz Allen Hamilton)France68Germany47Italy43UK73EU-1543 Forwards integration into retailingTotal 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 Boots)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,Ireland,Italy,Latvia,Lithuania,Netherlands,Norway&SwitzerlandPharmacies owned in countries allowing pharmacy chains:Celesio 2,090;Phoenix 800;Alliance Boots 2,700Pharmacies 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 critical attitude to PIsPrivately 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),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 productsUS spending on biotech products in 2006 was$54 billion(+21%on 2005 versus 6%market growth with traditional pharmaceuticals)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 productsFixed margin structure provides disproportionate reward for handling high 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 horizontal integration,support for generics and parallel trade.Manufacturers seek more control over distributiondirect distributionsupply quotasrelegating wholesalers to agents/logistic providersinvestigating new distribution models to ensure:product availability at point of dispensingminimal parallel trade/stock diversion cost effective distributionsecure supply integrity/traceabilitycloser relationship with pharmacies and patients GSKs agency distribution scheme in UKMoving closer to our customers Introduced by Glaxo in 1991-02,continued by Glaxo Wellcome and now by GSK.Hospital 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 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 schemeBy wholesalersFears 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 basisAdded costs,responsibility for bad debtsFears that other manufacturers would followthey didnt for 15 years anyway!By pharmaciesLose wholesaler discountGlaxo brands separated from non-Glaxo brands in discount inquiriesMore paperworkBy Department of HealthLose clawback Pfizers agency distribution scheme in UK(Delivering directly to our customers)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 shortagesreduce risk of counterfeit entryimproved visibility over supply chainbetter able to trace and recallnot to save moneyAll 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-line wholesalers and all shortliners no longer supplied.Pfizer does not rule out having more than one distributor in future.Concerns voiced on Pfizers agency schemeAnticompetitive?Decreased customer choice?Nail in coffin for regional wholesalers?Can single channel provide continuity of supply?Increased ordering workload and difficulties for pharmacies and dispensing doctors,e.g.opening new accounts,uncertain ordering cut-off&delivery times,time spent reconciling invoicesRenders pharmacy buying groups redundant?Reports of quota application at contractor level.Loss of procurement discounts?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.Risks 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 summer 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 European and global supply chain directors by Accenture.DoH not content to be interested observerPPRS 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 brand 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=burgeoning 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 advance warning were givenSpeaking 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,Italy&Spain)citing patient safety as justification.Distribution changes by Pfizer SpainDual pricing scheme introduced in 2001Since 2004 a mixed distribution system has evolved:-direct sales to pharmacies using LSPs-supply contracts with 16 wholesalers out of almost 100 and differential pricing.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 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 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 distributionBorn 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 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 prices and pharmacy margins Pros and cons of single channel distributionAdvantagesFor manufacturerLower wholesale marginLower administrative costsOnly one drop-off pointLower credit riskBetter inventory controlAccess to real-time data on realised salesImproved communication and co-operation with wholesalerWholesalers do not need to compete with discountsRecalls are easierNo reports of counterfeit entry into either Finnish or Swedish marketsDisadvantagesOne wholesaler carries the sole responsibility for stocking and delivering a product throughout countryAntitrust concerns pharmacies are unable to select suppliersM&A between manufacturers can produce big shift in wholesaler market sharesService levels to pharmacies may be less because of a lack of competition for their business from wholesalers.Many other features of UK pharma landscape are changing/poised to changeRegional split of UK/devolution of NHS budget to HAs and trustsOFT recommendation to replace PPRS with value-based pricingNICE:new STA process/Health Select Committee inquiry/legal challenge Review of value for money of primary care prescribing by NAOReview of wholesale margin by DoHReview of prescription charge/exemptions by Health Select CommitteeImplementation of new pharmacy contractsVolatility with generic reimbursementDoH proposal to remove branded generics from PPRSCurtailment of ZD listPrivate equity takeover of Alliance Boots Thoughts on the future Wholesaling will never be the same.Future single agency schemes unlikely in short term.Current UK geographical coverage of even largest wholesalers not perfect.top 2:85-95%top 3:90-95%top 5:97%(Source:Taylor Nelson Sofres/AT Kearney).but there will be more consolidation.PSNC will insist that pharmacies in England&Wales collectively retain 500 million purchase discounts DoH forced to adjust dispensing fee,clawback scale or Cat M generic prices?Onus will be on manufacturers introducing direct-to-pharmacy schemes to ensure via contract that their LSPs maintain high service levels to pharmacies and to provide value-added themselves.Any questions?Tel:01444