A wholesaler, a pharmacist and a direct supplier walk into a bar…
Panellists debated the merits of direct distribution at the PharmaDispatch conference held in Sydney on Monday.
Saul Resnick, DHL Supply Chain CEO Australia and New Zealand, argued that DHL’s service injects competition into the medicines supply industry.
“Without a realistic and competitive party in this process, the government is at the mercy of the National Pharmaceutical Services Association (NPSA),” he told conference delegates.
“If [the NPSA] went tomorrow as a body and said, we need $400 million or else we don’t distribute, the government have no choice. We offer an alternative.”
However pharmacy compounder David Slade said wholesalers offer a service that is “invaluable” to pharmacies, which direct distribution doesn’t provide.
“We know that we can access the medicines the next day, if not the same day, directly to our patients,” he said.
“That’s not what you can get through the direct distribution or exclusive distribution model.”
This is of “huge value” to patients, Mr Slade added.
“I would never ever as a pharmacist take patients out of the equation, it shouldn’t be just a commercial consideration as to how products are distributed across Australia.”
Mr Resnick responded that DHL has been doing direct distribution with its products for years now offering next day delivery.
“We currently deliver next business day based on our national distribution coverage to all approximately 5,500 pharmacies nationwide. Our delivery on-time performance is 99.27% on time,” he confirmed to AJP.
Mr Resnick added: “Direct distribution streamlines the supply chain into pharmacies. The direct-to-market model allows our manufacturer partners to maintain direct relationships with individual pharmacies and provide end-to-end visibility of products being stored and moved, while ensuring quality is never compromised.”
Specialised Therapeutics Australia CEO Carlo Montagner said his company is one of the few companies that does its own distribution.
“We’re in the position of really offering high value, low volume products. In this space, we save hundreds of thousands of dollars doing our own distribution. The service is second to none,” he said.
“It’s a surprisingly very efficient system. That works very well for us, we will continue to do that. We’re in that privileged position of being in that high value, low volume space.”
However Symbion CEO Brett Barons pointed out that not everyone is in this position.
“That’s the challenge. The rest of the system isn’t like that. That’s where as the NPSA we’re going to sit down with the government and say, what are the options, whether we can solve that,” he said.
“We need to ensure that our customers, the patients, have access to product.”
Mike da Gama said in his role as director of Nostra Data, which connects retailers to their suppliers, he’s “in the middle, and it’s an interesting position”.
“I’ve heard all sorts of reasons from manufacturers why they’ve gone to exclusive direct supply. Whether it’s direct or exclusive, what value are you offering to the manufacturer and supply chain? I haven’t seen a huge reduction in savings,” said Mr da Gama.
“I’ve had conversations with exclusives and I don’t see the value that they think they’re seeing. I think manufacturers need to rethink about how they distribute to pharmacy and how they can distribute medicines.”