Home Distribution of Medicines
There have been a number of recent and proposed distribution changes by leading UK medicine suppliers. Until recently all medicines were distributed through a number of competing wholesalers but in March 2007, Pfizer began supplying prescription medicines solely through one wholesaler, Unichem. A number of other suppliers have made similar changes to their distribution arrangements and it is anticipated that more will follow. On this section of the site, you will be able to find a summary of recent changes, a summary of the OFT Report into this issue and up to date information on any changes that occur as a result of the OFT Report.
Summary of Recent Distribution Changes
Astellas
New Arrangements with effect: 26th November 2007
Products affected: Prograf and Advagraf only. All other Astellas products are available from usual wholesalers. Available from: UniChem only.
Discount: No discount available for Prograf and Advagraf, however, both products are listed in the 'Drugs for which discount is not deducted List' (Part II of the Tariff).
Support: Should you encounter any problems obtaining Prograf and Advagraf contact Astellas customer service department on 01784 419615
Astra Zeneca
Start date: 2nd February 2008
Products affected: All Astra Zeneca products
Available from: AAH and UniChem
Discount: Different AZ products will attract different levels of discount with the same level of discount applied for a particular product regardless of the volume purchased. In addition, contractors may qualify for a retrospective rebate according to the total value of AZ products purchased in a given month.
Support: AstraZeneca Customer Services can be contacted on 0800 032 0501.
Click here to view the original Astra Zeneca letter to customers
AZ Product Discount Levels (Last Updated 10th February 2009)
Bayer Schering
Start date: 1st July 2009
Products affected: A product list can be found on the Bayer website. Not all Bayer products are affected. There have been no changes to the distribution of Bayer Consumer Care or Bayer Diabetes Care products.
Available from: AAH, UniChem and Phoenix
Discount: Discount available on these lines is set by wholesalers (standard wholesaling model).
Support: Bayer Schering can be contacted on 01635 563000
Bristol-Myers Squibb Pharmaceuticals Limited
Start date: 1st August 2009
Products affected: All BMS products
Available from: AAH and Alliance Healthcare (formerly Unichem) will supply most products however there are a number of lines which will only be available from BMS direct.
Discount: Discount available on these lines is set by wholesalers (standard wholesaling model).
Support: BMS Customer Services can be contacted on 0800 731 9902.
BMS letter to contractors and list of products
Eli Lilly
New Arrangements with effect: 6th July 2009
Will be Available from: AAH and Phoenix
Discount: As set out in Lilly's Pharmacy Brochure
Support: Should you encounter any problems obtaining Eli Lilly products contact Eli Lilly Customer Care Line on 01256 315999
GSK
Start date: 1st November 2008
Products Affected: All GSK prescription medicines from GSK UK
Support: GSK Customer Contact Centre on 0800 221 441 or your GSK account manager.
Janssen-Cilag Ltd
New Arrangements with effect: 1st January 09.
Products affected: All Janssen - Cilag Products
Available from: AAH, Phoenix and UniChem
Discount: Discount available on these lines is set by wholesalers (standard wholesaling model).
Support: Should you encounter any problems obtaining Janssen- Cilag products, contact Janssen- Cilag customer service department on 0800 333 001
Click here to view Janssen -Cilag letter .
Napp
New Arrangements with effect: From 1st October 2007
Products affected: All Napp products
Available from: AAH, Phoenix and UniChem
Discount: Note no discount is available on a number of Napp products which are listed in the 'Drugs for which discount is not deducted List' (Part II of the Tariff). Products not considered 'Zero Discount' are continuing to be sold on standard terms to the three chosen distributors, discount available to contractors on these lines is set by the wholesalers.
Support: Should you encounter any problems obtaining Napp products contact Napp Customer Service department on 01223 397297
Novartis
New Arrangements with effect: From 4th Augst 2008
Products affected: All Novartis products
Available from: AAH and UniChem
Discount: Discount available on these lines is set by wholesalers (standard wholesaling model).
More information: Novartis Press Statement (June 2008)
Novo Nordisk
New Arrangements with effect: 2nd March 2009
Products affected: All products
Available from: UniChem or Phoenix only.
Discount: Discount available on these lines is set by wholesalers (standard wholesaling model). Note, a number of the affected products are listed in the 'Drugs for which discount is not deducted List' (Part II of the Tariff).
Support: Should you encounter any problems obtaining Novo Nordisk products please call the Novo Nordisk customer service department on 0845 600 5055
Pfizer
Start date: 5th March 2007
Products affected: Pfizer Prescription Only Medicines
Available from: UniChem
Discount: Determined by Pfizer
Support: Should you encounter any problems obtaining Pfizer products contact Pfizer customer service department on 0845 6088866. An up to date list of Pfizer products in short supply and which are only available on an emergency basis through Pfizer can be found on the Pfizer DTP Website.
Roche UK
New Arrangements with effect: From 15th January 2009
Products affected: All Roche products
Available from: AAH and Unichem will supply most products however there are a number of lines which will only be available from Roche direct
Discount: Discount available to contractors on these lines is set by the wholesalers.
Support: If you have any queries regarding this information or relating to ordering arrangements, please contact Customer Care on 0800 731 5711.
Roche Letter to Contractors + List of Products
Product Specific guidance: Supplies of Tamiflu should be available from AAH or UniChem, however if pharmacies have difficulty in obtaining packs please contact Roche Customer Care on 0800 731 5711 who will arrange to supply packs directly to pharmacy on the next working day although longer delivery timelines may apply to highlands and islands. Standard delivery is free of charge.
Should pharmacies have demand for Copegus, Fuzeon, Mircera, Neorecormon, Pegasys, Tarceva, Xeloda please contact Roche Customer Care on 0800 731 5711 who will arrange to supply packs directly to pharmacy on the next working day although longer delivery timelines may apply to highlands and islands. Standard delivery is free of charge.
Sanofi Aventis
New Arrangements with effect: 1st November 07.
Products affected: All Sanofi Aventis Products
Available from: AAH, Phoenix and UniChem
Discount: Discount available on these lines is set by wholesalers (standard wholesaling model).
Support: Should you encounter any problems obtaining Sanofi Aventis products, contact Sanofi Aventis customer service department on 0800 854430
UCB
Start date: 27 April 2009
Products affected: Neupro
Available from: Alliance Healthcare (formerly UniChem)
Discount: The Department of Health have designated Neupro as a drug for which discount is not deducted.
Support: If you have any enquiries regarding this change or if you experience issues ordering Neupro please contact UCB Pharma cutomer services on 01753 477770.
OFT Report into Manufacturers Distribution Arrangements
In December 2007, the OFT published its market study into the distribution of medicines in the UK.
During the OFT Investigation, PSNC made strong representations to the Office of Fair Trading opposing sole distribution arrangements which limit competition in the wholesale market as well as choice for pharmacy contractors.
The OFT considered the impact on the sector of Pfizer Limited's exclusive DTP scheme using only UniChem, and the likely impact of other manufacturers introducing DTP schemes and/or reducing the number of distributors they use. The OFT has found that there is a significant risk that such arrangements will result in higher costs to the NHS potentially running into hundreds of millions of pounds. The OFT also found that such schemes could affect services to pharmacies and patients through, for example, longer waiting times to receive medicines.
Financial Impact of DTP Schemes
The OFT has recommended that the Department of Health makes further changes to the Pharmaceutical Price Regulation Scheme (PPRS) to ensure that NHS medicines costs do not increase as a result of changes in distribution, and follows on from the OFT recommendations in February 2007 to reform the PPRS. The OFT has put forward two options to prevent an increase in NHS costs:
Option 1: To reduce list prices in the PPRS framework by an amount equivalent to the average discounts received by pharmacies. The price agreed under the PPRS would be that at which medicines are sold to pharmacies. (If this proposal was adopted, changes would be required to the reimbursement arrangements, for example the discount deduction arrangements may be removed or changed and changes may be required to established payment mechanisms to compensate pharmacies for lost purchasing profits)
Option 2: Pharmaceutical suppliers offering a minimum list price discount to pharmacies. This would accommodate both DTP and the traditional wholesale model. (This option would also require changes to be made to the reimbursement arrangements)
The OFT's preferred option if option 1.
Impact on Service Levels
The OFT is also recommending that, if the Government is concerned about reductions in service standards to pharmacies, it should seek the agreement of manufacturers to adopt minimum service standards. Government should ensure that it pays less if service standards are reduced. The OFT also found that any future widespread use of exclusive distribution arrangements might lead to longer-term competition concerns and it will monitor the situation with the prospect of future investigation, if appropriate.
Click on the link below to download the report in full:
OFT Report on Medicines Distribution
Government Response to the OFT Report
The Government published it's response to the OFT study in early May. The Government agreed with the OFT that the impact on NHS costs from such schemes could be addressed through the current renegotiation of the Pharmaceutical Price Regulation Scheme (PPRS). On services, the Government was unconvinced of the need to bring forward legislation to clarify service standards at this stage, but have said they will keep this matter under review and may consider taking action at a later date in the event that this becomes necessary. Click on the link below to view the response in full:
Government Response to OFT Medicines Distribution Study
PSNC is continuing to receive reports of supply issues linked to changes in manufacturers' distribution arrangements, particularly Pfizer's single channel distribution model. We would encourage pharmacy contractors to continue to report problems that impact on patient care and we will ensure this is fed in to the Department of Health to support their ongoing monitoring work.
PSNC Online Survey on Pfizer's Arrangements
In Summer 2007, pharmacy contractors shared their experiences of the changes to Pfizer’s distribution arrangements in an online survey on the PSNC website. Of the pharmacy contractor representatives who responded:
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72% said order cut-off times have deteriorated.
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73% said predictability of delivery times have reduced. 88% said staff time costs in reconciling invoices had increased.
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84% said changes to the delivery arrangements for Pfizer products had adversely affected their ability to provide a service to patients.
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5% indicated that they had switched to Unichem for the supply of non-Pfizer products.
PSNC representatives met with OFT officials to brief them fully on the concerns of contractors and to share the results from the online survey.
Frequently Asked Questions
The level of discount being offered by Pfizer is lower that I currently receive from my full line wholesaler, surely this is detrimental to contractor funding?
Under the new contract, pharmacies in England are guaranteed £500m of purchase profit income. The £500m is calculated by reference to the profit that independent pharmacies can earn.
The purchase profit income is measured by invoice inquiries, collection of invoices from a sample of independent pharmacies, to identify actual levels of discount they are receiving. So in calculating the purchase profits available to independent pharmacies, they will take full account of any changes in the average discount levels for Pfizer products that independents earn. If full line wholesalers adjust their statement discounts to reflect the removal of Pfizer purchases, this will also be picked up. Once the exercise is completed, any necessary adjustments will be made to reimbursement prices or to the discount scale to deliver the promised £500m.
The new contract funding arrangements are fundamentally different from the old contract where there were no guarantees around purchase profit income and no protection for contractors from significant changes in the market affecting purchase profit income.
More information about the New Contract Funding arrangements including the profit monitoring arrangements can be found in the National Contract Funding Section of the Website.
Background Information
OFT Report on the PPRS Arrangements (PDF File)
OFT Report on Medicines Distribution (PDF File)
DOWNLOADS: Some documents are available in PDF format, you will require Adobe Acrobat Reader 5.0 or later for viewing which can be downloaded from the Adobe Website
DOWNLOADS: Some documents are available in ‘Microsoft Word’ format. If you do not have Microsoft Word, you can read these forms by downloading the free 'Word Viewer'. This program can be downloaded at the Microsoft website