Inconclusive OFT report on UK DTP distribution

The UK's Office of Fair Trading has issued its recommen dations on drug wholesaling, with a claim that direct-to-pharmacy sales by drugmakers presents "a significant risk that such arrangements will result in higher costs to the [National Health Service] potentially running into hundreds of millions of pounds."

The decision by global drug behemoth Pfizer to concentrate its UK distribution operations to 15,000 pharmacies, hospitals and dispensing physicians, via a single wholesaler, Alliance Boots' Unichem, led to a review of the effects of such a practice on drug prices by the OFT. An attempt by eight drug wholesalers to block the deal, which came into effect on March 5, failed in the High Court in London (Marketletters passim).

The OFT argued that DTP distribution could "affect services to pharmacies and patients through, for example, longer waiting times to receive medicines." However, the OFT's own statement appears to contradict itself in that it also claims that, as a result of manufacturers introducing exclusive wholesale arrangements, "such schemes may also give rise to efficiencies in distribution." The latter comment was seized upon by Pfizer as vindicating its shift towards DTP distribution. The firm also argues that the increased control in the supply chain improves security.