Pfizer’s plan to introduce a distribution system that delivers its prescription-only medicines direct to pharmacists and dispensing doctors provoked a fierce response from wholesaler AAH. Steve Dunn, AAH’s managing director, accused Pfizer of placing “its commercial interests above those of pharmacists and patients” and suggests that the change could fragment the supply chain, potentially affecting every company.
David Watson, Head of Trade at Pfizer says that the new system responds to the current supply chain’s vulnerability – underscored in the last 12 months by three batches of counterfeit Lipitor that involved the recall of 120,000 packs. The new system allows Pfizer to take full responsibility for its drugs “from when they leave manufacturing centres until they are sold.” Using the new system, Pfizer say that it can guarantee the product’s genuine.
Watson adds that the changes mean that they’ll be better able to respond more to, for example, the temporary problems supplying Cardura XL (doxazocin mesylate extended release) that emerged in May last year. “The problem emerged because we could not control the supply chain. This wouldn’t happen with the new system,” Watson told PharmaTimes World News.
Despite these arguments, the move was denounced strongly by AAH. Dunn claimed that the move may reflect a desire on Pfizer’s part to control discounts in the supply chain available through, for example, parallel importing. He added that Pfizer seems to be planning similar initiatives across Europe. Not surprisingly, Pfizer rejects this claim, noting that pharmacists can still buy parallel imports – albeit without the guarantees offered by the new system. And, while it admitted to looking at European supply chains, systems will differ between countries.
Under the system, due to go live in March 2007, Unichem – the wholesaling division of Alliance Boots – provides logistical services. Dunn suggests that this “single channel” does not guarantee of continuity of supply if Unichem faces unexpected operational, technical or IT problems. Pfizer responds by saying that it has extensive contingency plans to meet such eventualities. Further, Dunn wonders whether high-street Boots chemists will get preferential treatment if a Pfizer drug is in short supply. Watson counters that Unichem provides only logistical support. It has no influence over which pharmacists receive the drugs.
Finally, Dunn suggested that the change fragments the supply chain, with pharmacists potentially needing to work with “up to 40 or 50” separate companies. Dunn cited concerns raised by dispensing doctors that niche products produced by smaller companies could fall through the gaps if this happens. “The existing distribution system works well, allowing pharmaceutical companies to focus on their core competencies,” he concluded. “There seems to be little logic in replacing it with a largely unproved system.” Pfizer said that other companies would respond to the issues in the market in an appropriate manner. Pfizer has a particular problem with counterfeiting because of its high volume and the high profile of some of its brands. Mark Greener
