Press Release: 23rd July 2010

Direct-to-Pharmacy Distribution Model Limited to Poland and United Kingdom finds new URCH report
No sign of change to medicines supply chain in France or Germany
The recent moves by major UK pharmaceutical companies to distribute their products direct to the pharmacy (DPT) has not been copied in other European markets, except in Poland, finds a new market report from URCH Publishing. The report The Future of European Pharmaceutical Distribution: The impact of DTP on manufacturers and wholesalers says that moves in the UK by major pharma companies to bypass wholesalers and supply to pharmacies through exclusive distribution partners have largely been successful and has not met with legal opposition from the authorities.

The model which was initiated by Pfizer in 2007 was expected to be rolled out in other major European markets threatening the existence of many wholesalers.

“As the largest two pharmaceutical wholesale markets in the EU, France and Germany appeared to be likely targets,” said Faiz Kermani, author of the report. “But, even by 2010 there were no signs that DTP was being explored in these countries,” he added.

Surprisingly, it was Poland that represented the next step for DTP adoption, with AstraZeneca being the pioneer for a new distribution system. It selected Polska Grupa Farmaceutyczna, Torfarm and Farmacol to be its exclusive distribution partners. Up to seven other companies are believed to be selecting distribution partners in Poland as part of DTP agreements. This is predicted to reshape the Polish wholesale market, which has already experienced a wave of consolidation, and put further pressure on smaller wholesalers.

As initially happened in the UK, the DTP agreements in Poland face legal obstacles. Poland’s Main Pharmaceutical Inspectorate is of the opinion that such agreements violate provisions of the Pharmaceutical Law and the Law on Health Benefits, which requires wholesalers and manufacturers to ensure delivery on equal terms to all parties in the distribution chain.

The 80 page report notes that while some pharmaceutical companies have adopted the DTP model, others have decided simply to reduce the numbers of wholesalers with whom they do business. Some observers believe that this type of arrangement is much quicker to implement than the DTP model.

“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,” said Edwin Bailey, managing director of URCH Publishing, commenting on the report’s findings.

The power of distributors to resist change has proved limited, since these new models offer some wholesalers opportunities to quickly dominate the market. Essentially, for those wholesalers that become preferred partners for pharmaceutical companies, the new models guarantee business. Therefore, as these companies become enticed by deals their willingness to oppose changes in the supply chain will diminish and only companies that have lost out will be left to put up any resistance to manufacturers.

More information about this report, with full table of content and details on how to purchase are available at: distribution.html

About URCH Publishing Ltd URCH Publishing Ltd is an independent business information publisher dedicated to delivering quality information products to the global pharmaceuticals industry. For more information contact URCH Publishing on +44 (0) 20 7060 1099 / service[at]

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