• Chemicals
• Discovery / R&D
• Generics
• Market Trends
• Pharma Industry Trends
• Pricing & Reimbursement
• Regulatory
• Sales & Marketing
• Therapeutic

M&A in pharma

Explores the merits of mega-deal in contrast to a more measured portfolio growth strategy

Reducing the number of wholesalers helps to reduce internal costs for manufacturers, and by dealing only with a few wholesalers may create more manageable business relationships

The European pharmaceutical distribution system is set to change dramatically over the next few years. The adoption of direct-to-pharmacy (DTP) in the UK and its emergence in Poland sets a potential precedent for other European markets.

To date, pharmaceutical manufacturers have managed to drive the changes to suit their interests.  However, the establishment of new relationships with select wholesalers will lead to a new type of distributor, which will expand their portfolio of business interests across Europe.

With the underlying structure of the supply chain about to change wholesalers are keen to remain competitive in the market.

The Future of Pharmaceutical Distribution in Europe - The impact of DTP on manufacturers and wholesalers from URCH Publishing, is a market report that comprehensively reviews the business of medicines distribution in Europe.

This 88 page report is an update of the 2008 report “Pharmaceutical Distribution in Europe”

The report is logically divided into four chapters.
Chapter 1 provides a comprehensive history and overview of the key issues related to the pharmaceutical supply chain in Europe, including European law, EU institutions and the retail pharmacy industry.

Chapter 2 fully reviews the role of pharmaceutical wholesale companies with profiles of Alliance Boots, Celesio AG, Mediq and The Phoenix Group.  Distribution in the major markets is examined and the role of technology in wholesaling is reviewed.

Chapter 3 discusses how pharmaceutical manufacturers organise the distribution of their products. The emergence in the UK of direct-to-pharmacy distribution is analysed, as is reaction to the Office of Fair Trading’s report. The impact of Pfizer’s DTP scheme is assessed and moves by the other big players like AstraZeneca and Novartis are discussed.

Chapter 4 looks at the pressures that the European supply chain sector is under. Particular attention is paid to the growing problem of counterfeit medicines and the moves by the authorities and manufacturers to control this illegal trade.

The report provides a comprehensive insight into the realities of distributing medicines in Europe. Questions answered include:

• What has been the impact of direct-to-pharmacy distribution in the UK?
• Will government austerity measures impact the pharmaceutical distribution sector?
• Are there significant legal obstacles to be overcome when moving to a DTP distribution model?
• Do pharmacists have a future beyond the administration of dispensing?
• Are counterfeit medicines the next big major issues that the industry has to deal with?
• Is parallel trade still such a threat to manufacturer’s profits?
• How wholesalers will have to change to remain competitive?

 Key features of the report include:

• Over 10 case studies including these companies, Alliance Boots, AstraZeneca, Celesio, PharmacyChecker.com and Sanofi-Aventis
• Unbiased synopsis of the Office of Fair Trading's (OFT) report into the UK’s pharmaceutical supply chain
• Overview of the European pharmaceutical supply chain and the stakeholders involved in medicines distribution
• Insight into the aggressive Pan-European expansion strategies of some wholesalers
• Overview moves by manufacturers and authorities to reduce the problem of counterfeit medicines and the challenge of creating a Europe-wide response.

The report will help readers:

• Understand the impact of IT on managing distribution in Europe
• Analyse changing impulses in supply chain demand
• Gain insights into the consolidation process amongst wholesalers
• Evaluate the impact of the European Union on business strategy

With 13 Tables and 27 Figures this report is essential reading for anyone working in the pharmaceuticals supply chain including manufacturers, wholesalers, distributors and pharmacists.

Organisations mentioned in this report include:

Alliance Boots, Alliance Healthcare, Amedis UE AG, Association of Pharmacies of Attica (APA), Associazione Distributori Farmaceutici, Astellas, AstraZeneca, Chambre Syndicale de la Répartition Pharmaceutique (CSRP), Der Bundesverband des pharmazeutischen Großhandels (PHAGRO), EFPIA,. Europa Apotheek, Europharm, Farmacol, Federación Nacional de Asociaciones de Mayoristas Distribuidores de Especialidades Farmacéuticas y Productos Parafarmacéuticas (FEDIFAR), Galexis, GlaxoSmithKline, Groupement International de la Répartition Pharmaceutique (GIRP), Independent Pharmacy Federation (IPF), International Pharmaceutical Excipients Council (IPEC), Laboratorio Flandria NV, Les Entreprises du Médicament (LEEM), Medicines and Healthcare products Regulatory Agency (MHRA), Mediq, Napp Pharmaceuticals, Novartis, OFT, Panpharma, Pfizer, Phoenix Group, Polska Grupa Farmaceutyczna, Roche, Sanofi-Aventis, Tamro, The British Association of Pharmaceutical Wholesalers (BAPW), Torfarm, Unione Farmaceutica, Voigt AG, World Health Organization (WHO)

USE THIS REPORT TO:

• Identify key areas that will change in the pharmaceutical market structure over the next five years.
• Support internal planning and decision-making with an external perspective founded on detailed analysis and transparent market forecasts.
• Understand how the market and regulatory environment could change  

Remember URCH Publishing's healthcare management reports are designed to help business executives make properly informed and timely business decisions.

Executive Summary

Chapter 1: Introduction to European Pharmaceutical Distribution
The pharmaceutical supply chain
Pharmaceutical manufacturers in the EU
The European Federation of Pharmaceutical Industry Associations (EFPIA)
Biotech drugs
European Biopharmaceutical Enterprises (EBE)
Vaccines
European Vaccine Manufacturers (EVM)
Pharmacies in the EU
The Pharmaceutical Group of the European Union (PGEU)
Dispensing doctors
Wholesalers in the EU
Groupement International de la Répartition Pharmaceutique (GIRP)
The hospital sector
Pre-wholesaling
History of the pharmaceutical supply chain
Outlook for the supply chain
Case study: tax-efficient supply chain management
Global perspectives for European pharmaceutical distribution
Case study: consolidation among US pharmaceutical wholesalers
Case study: US wholesalers poised to enter Europe
Case study: US analysis of the DTP model
European status of the supply chain
European market harmonisation and pharmaceutical distribution
The politics of EU healthcare
The EU
The institutions of the EU
The European Economic Area (EEA)
Case study: Greek wholesalers challenge GlaxoSmithKline at the ECJ

Chapter 2: Pharmaceutical Wholesaling in Europe
The role of the pharmaceutical wholesaler
Channels of distribution
Wholes aler opposition to supply quotas
Wholesaler views of direct-to-pharmacy distribution
Case study: GIRP dispute with Alliance Boots over DTP agreements
Cross-border mergers and acquisitions
EU harmonisation and the outlook for pan-European wholesaling
The major players in pan-European wholesaling
European regulations for wholesalers
Guidelines on Good Distribution Practice of Medicinal Products for Human Use (94/C 63/03)
Lack of harmonisation and the supply chain
Wholesaler technology solutions
Case study: Alliance Boots launches online health portal
Order fulfilment packages
Database technology
Electronic point-of-sale technology
Barcoding
European wholesaler opinions on technological solutions
Warehouse technology
Dispensing technology
Future systems
Case study: Celesio buys infrastructure services from Hewlett-Packard
Consumers and e-commerce
Pharmaceutical distribution in UK
Pharmaceutical distribution in France
Pharmaceutical distribution in Germany
Pharmaceutical distribution in Italy
Pharmaceutical distribution in Spain
Pharmaceutical distribution in Switzerland
Pharmaceutical distribution in Poland

Chapter 3: The European Pharmaceutical Industry and Distribution
The pharmaceutical market
Pharmaceutical manufacturers in Europe
The pharmaceutical industry and the supply chain
Case study: the Pharmaceutical Supply Chain Initiative (PSCI)
Cost containment
Pricing in Europe
Case study: the Common European Drug Database project
Cost-effectiveness reviews
Parallel trade in the EU
Generics
Case study: cost containment in the UK
The negative impact of cost containment
Case study: Europe’s Innovative Medicines Initiative
Counterfeiting
Manufacturers exert control over the UK supply chain

Implications of changes in the supply chain

Pfizer’s feedback on DTP
Criticism of Pfizer’s DTP scheme by UK pharmacists
Case study: Pfizer UK’s DTP website
Reaction to the Office of Fair Trading inquiry
Pharmaceutical Services Negotiating Committee’s online survey on Pfizer’s DTP scheme
AstraZeneca changes its UK supply chain arrangements
Sanofi-Aventis changes its UK supply chain arrangements
Napp Pharmaceuticals changes its UK supply chain arrangements
Novartis changes its UK supply chain arrangements
Eli Lilly changes its UK supply chain arrangements
Astellas adopts DTP for transplant medicines in the UK
Reduced wholesaling
UCB changes its UK supply chain arrangements
Roche changes its UK supply chain arrangements
Launch of DTP schemes in Poland

Chapter 4: Protecting the European Pharmaceutical Supply Chain
Stability of the European pharmaceutical supply chain
Safeguarding the European supply chain
Product shortages in the supply chain
Case study: production plant issues cause European vaccine shortages
Parallel trade
Parallel trade and disruption to the supply chain
Case study: GlaxoSmithKline’s Spanish dual-pricing strategy
Case study: parallel trade leads to drug shortages in Greece
Traceability throughout the supply chain
Counterfeit products
Mediq tackles counterfeit insulin needles in the Netherlands
Case study: Spain positions itself as supply chain pioneer
Counterfeiting trends
Counterfeiting and the European supply chain
Case study: joint meeting between EU customs administrations and pharmaceutical companies
European anti-counterfeiting measures
EFPIA combats counterfeiting
The MHRA’s anti-counterfeiting strategy in the UK
Case study: Sanofi-Aventis’s anti-counterfeiting initiative
Case study: shock tactics in UK public anti-counterfeit campaign
The International Medical Products Anti-Counterfeiting Taskforce (IMPACT)
The Pharmaceutical Security Institute (PSI)
Case study: AstraZeneca opts for mass serialisation to prevent counterfeiting
Using nanotechnology to combat counterfeiting
Future perspectives on European anti-counterfeiting measures
Internet trading
Case study: PharmacyChecker.com
References

List of Figures

Figure 1.1 Outline of the supply chain
Figure 1.2 Number of public pharmacies in Western Europe
Figure 1.3 Number of public pharmacies in Eastern Europe
Figure 1.4 Dispensing doctors in Europe
Figure 1.5 Major Western European pharmaceutical wholesale markets
Figure 1.6 Emerging Central and Eastern European pharmaceutical wholesale markets
Figure 1.7 Number of hospital pharmacies in Western Europe
Figure 1.8 Number of hospital pharmacies in Eastern Europe
Figure 1.9 Corporate tax rate on profit (2009)
Figure 2.1 Number of full-line wholesalers in Western Europe
Figure 2.2 Number of wholesaler warehouses in Western Europe
Figure 2.3 Number of full-line wholesalers in Eastern Europe
Figure 2.4 Celesio wholesale revenue development
Figure 2.5 Celesio wholesale revenue by market
Figure 2.6 Celesio pharmacy revenue by market
Figure 2.7 Phoenix turnover
Figure 2.8 Mediq net sales
Figure 2.9 Mediq revenue by market
Figure 2.10 Alliance Boots 2009 revenue by division
Figure 2.11 Alliance Boots 2009 wholesale revenue by market
Figure 3.1 Pharmaceutical R&D expenditure in Europe, by year
Figure 3.2 Pharmaceutical R&D expenditure across Europe, by country
Figure 3.3 Employment in the European pharmaceutical industry
Figure 3.4 The Common European Drug Database
Figure 3.5 Share of parallel imports in European pharmacy markets
Figure 3.6 Comparison of pharmaceutical R&D expenditure in Europe and the US
Figure 3.7 UK pharmacy respondent views on potential costs of setting up a separate Pfizer account for DTP
Figure 4.1 Geographical split of reported counterfeiting incidents
Figure 4.2 EFPIA standardised identification solution for pharmaceutical products
Figure 4.3 Total number of reported counterfeiting incidents
Figure 4.4 Counterfeiting arrests by region

List of Tables

Table 1.1 Types of manufacturer medicines
Table 1.2 The institutions of the EU
Table 1.3 Adoption of the euro
Table 2.1 Mediq’s activities in Europe
Table 2.2 Summary of GDP guidelines
Table 2.3 The BAPW’s Gold Standard of GDP by pharmaceutical wholesalers as endorsed by the MHRA
Table 3.1 The European pharmaceutical pricing environment
Table 3.2 The European environment for generics
Table 3.3 Overall risks of DTP identified by OFT
Table 3.4 Implications of reduced service standards resulting from DTP
Table 4.1 European anti-counterfeiting measures
Table 4.2 Variations in national codification systems
Table 4.3 Key areas of focus for the International Medical Products Anti-Counterfeiting Taskforce (IMPACT)

Dr Faiz Kermani has over 15 years’ experience in both academia and the pharmaceutical industry. He has worked in pharmaceutical R&D, pricing and reimbursement, marketing and medical education. Dr Kermani holds a PhD in Immunopharmacology from St Thomas’s Hospital, London, and a First Class Honours degree in Pharmacology with Toxicology from King’s College London. He has written extensively on international healthcare issues, and is on the editorial board of a number of publications. In March 2006, he was a delegate on the UK Government’s Trade and Investment Biotech Scoping Mission to China and contributed to the subsequent report.