Hit to trading terms

Wholesalers forced to act in the wake of direct distribution defections

The recent moves by manufacturers AstraZeneca and Amgen to a direct distribution model are being blamed for driving full-line wholesalers to reduce their trading terms to pharmacies.

Earlier this week industry newsletter Pharma In Focus reported that Sigma was believed to be winding back its trading terms by 0.25%

A spokesperson for Sigma Healthcare told AJP that while they never specifically discuss trading terms, “it is inevitable there are changes given the industry dynamics at the moment”.

There have also been reports that other wholesalers have also adjusted trading terms, with a number of sources telling AJP that they had heard that Symbion was believed to also be making a 0.25% adjustment to its terms.

In a message to members of the Pharmacy Guild of Australia in the wake of the AstraZeneca and Amgen announcements, Guild national president George Tambassis said “I have personally expressed the Guild’s serious concerns to the CEOs of both companies about the issues and flow on effects of their respective decisions on community pharmacies, but have not had a satisfactory response”.

“The Guild is working closely with the Federal Government on this extremely worrying chain of events. Health Minister Greg Hunt has been receptive, and understands this issue will affect our pharmacies, the supply chain and ultimately our patients”.

AstraZeneca announced in November it was moving to have fourteen of its 100 product lines distributed via a direct supply model through DHL (the Pfizer Direct distributors), bypassing the full line CSO wholesalers.

Soon after, Amgen said it would distribute one of its biggest selling products, Prolia, exclusively through DHL.

Mr Tambassis said the decisions would risk increases costs for community pharmacies and undermining the CSO supply chain.

“I believe it is very important that the companies that have decided to make these decisions for their own commercial benefit hear about our concerns as pharmacy owners in a more unified and louder way,” he said.

“I want to be perfectly clear on this point: these companies are shifting to exclusive direct supply for their own commercial benefit. Any pharmacy programs they may choose to promote as part of the change are ancillary to that primary purpose.

I urge you to contact these companies directly to express your concern with their decision to take these medicines direct bypassing the CSO wholesalers, and denying your pharmacy choice in terms of suppliers”.

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1 Comment

  1. Toby

    Given that the Guild has little influence over anyone who counts, don’t expect any help from the government with this. And especially not from academic / consultant-type pharmacists, for whom the solution to everything is to increase regulation and / or make everything prescription-only.

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