DTP expands across Europe
Following the developments in the UK, DTP models are now beginning to make their way into Poland. Since 2009, AstraZeneca
has been the main driver in trying to introduce DTP into the Polish pharmaceutical market, and has selected Polska Grupa Farmaceutyczna,
Torfarm and Farmacol to be its exclusive distribution partners. Up to seven other companies are also believed to be selecting
distribution partners in Poland as part of DTP agreements.1 The changes are predicted to reshape the Polish wholesale market, which has already experienced a wave of consolidation,
and further pressurise smaller wholesalers. According to media interviews with the President of AstraZeneca Poland, Jerzy
Garlicki, the launch of a DTP scheme has been a success.11 He stated that more than 80% of Poland's 1300 pharmacies omitted wholesalers when buying at least one of the company's products
during the first 2 months of the scheme.
However, AstraZeneca's DTP model has run into opposition from Poland's Main Pharmaceutical Inspectorate, which states it may
be breaking the country's Pharmaceutical Law and the Law on Health Benefits,11,12 which are designed to ensure access to pharmaceuticals and requires their delivery on equal terms to all parties in the
distribution chain. In addition, in May 2009, Poland's Office of Competition and Consumer Protection summarised its findings
concerning contracts between distributors and several major pharmaceutical companies including GlaxoSmithKline, SanofiAventis,
Servier, Novartis, AstraZeneca, Novo Nordisk, Pfizer, Eli Lilly, Roche and Bayer.
If DTP is to succeed then AstraZeneca will need to be prepared for legal battles with the authorities, in a similar manner
to what happened in the UK. If DTP does manage to gain a foothold in Poland, however, then it is highly probable that pharma
companies will attempt to introduce the model elsewhere in the EU.
At present, European wholesalers have been unable to resist the moves by pharmaceutical companies to tighten their grip over
distribution systems. One of the reasons for this is the inability of wholesalers to present a united front against the pharmaceutical
industry. Essentially, for those wholesalers who become preferred partners for pharmaceutical companies, the new distribution
models guarantee business and will help them dominate the wholesaling market. As such, these companies become less inclined
to oppose the supply chain changes, leaving the resistance up to the companies who lost out.
The establishment of new relationships with select wholesalers, however, will lead to a new type of distributor, formed through
the consolidation of bigger wholesalers with DTP deals with major pharma companies, instead of lots of smaller wholesalers.
As they gain power in these relationships and expand their portfolio of business interests across Europe and beyond, they
may not let pharmaceutical companies have everything their own way.
Partly in response to complaints from smaller wholesalers, there are also likely to be further official investigations into
the merits of DTP models. As long as pharmaceutical companies can demonstrate that such moves improve distribution efficiency
and do not result in visible increases in healthcare costs for European governments and anti-competitive practices, however,
they will probably continue to take bolder steps in this direction.
1. F. Kermani, The Future of Pharmaceutical Distribution in Europe (Urch Publishing, UK, 2010).
2. "Other companies consider distribution shake-up" in The Pharmaceutical Journal
, 277(7431), 725 (2006).
3. Pharmaceutical Services Negotiating Committ, "Distribution of Medicines" (2009).
4. D. Andalo, "Wholesale: ripples made by Pfizer" in The Pharmaceutical Journal
, 279(7468), 259–262 (2007).
5. Pfizer, The New Distribution Arrangement (2010).
6. C. Chapman, Chemist and Druggist News (October, 2009).
7. Dispensing Doctors Association, "Government Responds to OFT Medicines Distribution" (2008).
8. Dispensing Doctors Association, "DTP & RWM Schemes updated again" (2010).
9. Bristol-Myers Squibb Pharmaceuticals (BMS) announces change in distribution arrangements (Pharmaceutical Services Negotiating
Committee, June 2009).
10. Alliance Boots, "GIRP and Alliance Boots announce settlement agreement and withdrawal of claims" (2009).
11. Business Monitor International, "AstraZeneca's DTP Scheme Shows Strong Uptake" (2009).
http://PharmaPoland.com/, "More pharma firms to adopt DTP in Poland" (2008).