Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 8) PHARMACEUTICAL DISTRIBUTION contracts with pharmacies different in every town – the distributor’s policy of national coverage proved to be no advantage in terms of buying power, which continued to lie with the small local players in the market. Equally, opportunities exist to take advantage of market specificities. In Germany, for example, homecare companies can deliver diabetes test strips, but laws forbidding third party ownership of pharmacies prevent them from supplying the associated drugs and medication. Entrepreneurial pharmacists have therefore joined these suppliers, “converted” their address lists into patients, and taken over the full delivery of their medication. There are now individual pharmacies supplying upwards of 70000 diabetes patients. For some organisations the same type of initiative could work in reverse in the UK and Netherlands, with pharmacists taking over distribution of biological injectables, for example, currently the exclusive domain of specialty suppliers. Faced with the prospect of their traditional business practices diverting to alternative channels, wholesalers and pharmacists may choose to explore collaborative opportunities that allow for a more efficient supply chain process. In markets where they share a common business interest against a mutual third party stakeholder, for example, there may be possibilities for wholesalers to leverage their stronger negotiating power on behalf of pharmacy franchise groups. Such an approach has already proved successful in mature markets like the Netherlands. In the interests of safeguarding their future, wholesalers and pharmacies may also want to consider changing their compensation scheme to a flat, fee-for-service model rather than the traditional percentage approach. For payers, expanded competition in the market brings potential for cost reductions and increased value from the same expenditure. And for patients come new possibilities for cost savings, improved accessibility to treatments, and greater convenience. For manufacturers, the current climate presents three key business challenges — a need to better measure true market value, understand specialist markets, and determine the best distribution channel for their portfolio. As they try to keep pace with the transforming landscape and take advantage of the many opportunities it offers to strengthen their influence, practice relationship marketing with physicians, improve the patient experience, and add value to the delivery of care — a clear channel strategy for each of their products will be a key differentiator in their long-term success. Already, concerns are emerging around developments in the supply chain — particularly in relation to margins, product flows, parallel trade, and uncertainty around product origin and purity. This calls for an integrated approach to market intelligence that provides the necessary coverage, valuation, segmentation and consistency to facilitate decisions around supply channel assessment and performance, competitor channel strategy, stocking levels, price/demand impact and pharmacist influence. Companies that recognise this and look to the value of advanced metrics and new market measurement points to visibly track and monitor the supply chain will be the best positioned to assess performance, allocate resources, and develop and implement strategies for competitive success. Only the beginning The last 10 years have produced significant changes in the European arena for dispensing and distribution. However, the coming 10 years are likely to deliver even more extensive changes since several factors are now working together: the general liberalisation of trade; the increased importance of specialist-driven products; the growing use of generics; direct delivery-topharmacy strategies, and the critical mass of the leading companies. About the Author Per Troein is vice president, Strategic Partners, IMS Health Europe, Middle East & Africa. His client work is particularly focused on the issues of distribution and dispensing, healthcare policy and generics. Prior to joining IMS ten years ago, he worked for Pharmacia, starting his career with line responsibility building a medical device business based in the US. Latterly, he spent six years in strategic development including overseeing several major mergers and acquisitions. He started his career with Ericsson and progressed through the company with increasing responsibilities in operations and development. He holds an MSc in engineering from Lund’s Institute of Technology and an MBA from INSEAD. 8 OCTOBER 2008 PHARMACEUTICAL EXECUTIVE EUROPE
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe IMS Supplement - October 2008 Pharmaceutical Executive Europe IMS Supplement - October 2008 Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 1) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 2) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 3) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 4) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 5) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 6) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 7) Pharmaceutical Executive Europe IMS Supplement - October 2008 - (Page 8)
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