Distribution dust-up


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Calls for supply chain guarantees as another pharma company decides to explore direct distribution to pharmacy

The National Pharmaceutical Services Association (NPSA) is calling for the Federal Government to ensure all PBS-listed medicines remain available for distribution by CSO wholesalers after another manufacturer has announced it will begin direct distribution.

AstraZeneca revealed that it would exclusively distribute a proportion of their products direct to pharmacies, effective from 1 November.

The nine product ranges that will begin direct distribution are:

  • Brilinta (ticagrelor)
  • Bydureon (exenatide inj)
  • Byetta (exenatide)
  • Cosudex (bicalutamide)
  • Iressa (gefitinib)
  • Lynparza (olaparib)
  • Tagrisso (osimertinib)
  • Zoladex (goserelin acetate)
  • ZolaCos (goserelin-bicalutamide)

The company said it would be using DHL to deliver its medicines, via its existing direct to pharmacy distribution service, used since 2012 for Pfizer Direct.

NPSA, the umbrella group representing CSO wholesalers, said in response that the move would see “a number of higher-value and higher-volume medicines, representing around 30% of AstraZeneca’s revenue base, is to bypass wholesalers and be delivered direct-to-pharmacy”.

“The Government is the effective buyer of PBS medicines on behalf of all Australians. To continue to uphold the National Medicines Policy and preserve the principles of equity of access for all Australian patients, it needs to ensure that all PBS-listed medicines are available through the CSO wholesalers at equivalent pricing,” said Mark Hooper, NPSA chairman.

“Allowing the current cross-subsidised system to effectively be picked apart inevitably results in a weakening of the National Medicines Policy and will have flow on implications for pharmacy. Pharmacy felt the substantial financial impact when Pfizer went to a direct distribution model in 2012, and this looks similar.

“Further, overseas experience illustrates how exclusive distribution can change the dynamics of the pharmaceutical distribution supply chain, shifting the focus from pharmacy to manufacturers, from a system orientated toward patient need to one driven by commercial imperatives,” he said.

A spokesperson for the Pharmacy Guild of Australia said: “The Guild certainly supports the proposition that all PBS medicines should be available through the wholesalers even where the medicine might also be available direct from the manufacturer.

“We support the NPSA arguments and have also argued this case in our submission to the Pharmacy Review”.

AstraZeneca says it is “making this change so AstraZeneca can monitor supply and demand for these specialised products more closely, respond to market need with greater speed and accuracy and improve efficiencies”.

The 32 other AstraZeneca products will continue to be distributed to retail pharmacies by existing wholesale distributors.  

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5 Comments

  1. Gavin Mingay
    31/10/2017

    Because that model has worked so well for Pfizer….

  2. Karalyn Huxhagen
    01/11/2017

    If Astra Zeneca cannot extract distribution data from the wholesalers in an accurate and timely manner than this is an issue that NPSA should be addressing with its members. The comment from AZ that it requires this move to improve efficiencies tells me that there is a problem with their former distribution networks which many of us have suffered many times. CSO wholesalers cannot have it all their way when those of us at the end of the supply chain are often out of stock of items which the manufacturers tell us they have plenty of but XYZ wholesaler has not ordered any of those items from us in this budget cycle. Wholesalers do purchase according to their budgets and the patient and pharmacists are often in a tight corner caused by these cycles controlled by CFO’s not the demand for the product. NPSA needs to tease out the whole issue that has caused this move by AZ. It will make it difficult for many of us esp as DHL has a bad habit of not delivering when we need items or sending my stock to Cairns instead of mackay (both are in NQ). DHL have a policy of only delivering urgent medical itmes next day. who determines whether brillinta is urgent? A computer, a pharmacist or an operator who just pushes the buttons? I am not happy with this decision but I would like NPSA to put their big boy pants on for once and work out the truth about why this has occurred. I do not mean that six people should meet for lunch in Carlton and chew the fat-as an end user of AZ products I want to know the truth of why this occured.

    • Andrew Kelly
      01/11/2017

      Hi Karalyn, regarding next day delivery, I don’t think Astra have put a cap on how many free deliveries you can get per month ( a la Pfizer). However this obviously doesn’t factor in issues with DHL as the delivery partner and getting them to you.

  3. PeterC
    01/11/2017

    Whatever AZ’s intent here, the effect is one of shifting costs from product sponsor to pharmacy. AZ gains an efficiency (reduces costs) and we are saddled with a new cost – possibly of greater magnitude than AZ’s gain – that we can’t avoid and can’t pass on and the PBS is – again – made just that much more inefficient. When Pfizer did the same thing we chose to punish them by switching patients onto more convenient brands. There doesn’t seem to be that opportunity here – at least not immediately – so regardless of AZ’s good intentions, we and our patients are getting screwed. Not sure who’s standing up for our interests here but I agree with Karalyn about people needing to pull on their big-boy pants. The other thing that sucks – and here AZ really is to blame – is that many of us haven’t even been notified of this change and there has been no attempt to help us transition to the new ordering arrangements. No-one has even had the courtesy to let us know the DHL PDE codes so we could set it up in advance. It reveals AZ’s contempt both for us and for the patients who use its products. So stuff you AZ. We won’t forget.

  4. Margaret Topp
    10/11/2017

    I was not up with change, so yesterday wasted valuable time trying to contact AZ directly, after being told by my wholesaler “you are not allowed to order that ” .No other explanation forthcoming, as she obviously had orders not to comment. Spent time on a telephone roundabout on AZ’s “information” line, getting nowhere fast. I agree with all other comments on this forum, it’s just not right.

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