Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 4) PHARMACEUTICAL DISTRIBUTIONPHARMACEUTICAL DISTRIBUTION European Commission’s support of free trade and increased competition. The potential impact of this new direction is most apparent in Norway, where tight regulations in the pharmacy sector were relaxed in 2001 with the removal of rules on the establishment of new pharmacies and prevention of multiple and non-pharmacist ownership. Since then, the number of pharmacies has increased significantly, from around 390 to an expected 600 by the second quarter of 2008, with heavy acquisition by wholesalers. Over 95% of pharmacies are now corporately owned. Elsewhere in Europe, the trend towards liberalisation is gathering pace with the expansion of over-the-counter (OTC) products into the mass market, emergence of mail order and other new Figure 2 Chain pharmacies are now being permitted in a growing number of European countries. Fully allowed Partially allowed dispensing forms, and the growth of chain pharmacies, which are now being allowed in an increasing number of countries (Figure 2). Pharmacy chains can take a number of forms: currently just over 10% of pharmacies in the region are corporately owned — primarily in the UK, Netherlands, Norway, Sweden, Belgium and most Eastern European countries; typical in Germany and Denmark, and a first step in the direction of chains, is multiple ownership of pharmacies by a single pharmacist; lastly are virtual pharmacy chains, such as buying groups and co-operative wholesalers, which now exist in most markets. In general, chains are quicker to implement new services and improved work processes than are their independent counterparts and critically are in a stronger position to obtain better purchase prices. Growing structural stress Source: IMS Health Figure 3 The changing face of the pharmaceutical distribution in Europe. Distribution channels Dispensing channels Faced with the confluence of these market conditions, the structure of pharmaceutical distribution and dispensing in Europe has come under growing pressure. An upsurge in the number of new competing channels is causing major shifts in the sector, significantly changing the established model of the supply chain process (see Figure 3). Some of the the key emerging trends are outlined below. Full line wholesalers Full line wholesalers Short liners Traditional community pharmacies Chain pharmacies DS MM Other Independant pharmacies Disp. doc Others Others Hospitals Mail order Homecare Outpatient Inpatient Source: IMS Health DS Druggists MM Mass Market 1. Challenges to traditional wholesaling In Europe, pharmaceuticals have been traditionally distributed through full line wholesalers servicing pharmacy needs with a comprehensive range of drugs, healthcare and beauty products. While this model continues to dominate, several other approaches are also growing in importance. Key amongst these is the direct distribution of 4 OCTOBER 2008 PHARMACEUTICAL EXECUTIVE EUROPE Donovan Reese/Getty Images …the structure of pharmaceutical distribution and dispensing in Europe has come under growing pressure.
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