APPENDIX 46
Supplementary memorandum by British Association
of Pharmaceutical Wholesalers (PI 24A)
In August the British Association of Pharmaceutical
Wholesalers (BAPW) submitted written evidence to the Health Select
Committee's inquiry into "The Influence of the Pharmaceutical
Industry".
Further to that evidence, the BAPW wanted to
highlight a practice the branded pharmaceutical industry is increasingly
adopting, which is to limit supplies of vital medicines to pharmaceutical
wholesalers, which we believe is ultimately to the detriment of
patients.
Under this new practice, branded pharmaceutical
companies are arbitrarily setting quotas on the amount of medicines
they will sell to wholesalers, purportedly in order to "better
manage medicine stocks" for themselves. This is done without
consultation or discussion with wholesalers, who, as a result,
have no opportunity to influence the level at which their quotas
are set, Indeed, some of those companies imposing quotas make
no attempt to explain the criteria by which levels are set.
Clearly in the classical manufacturer-wholesaler-retailer-patient
model, where most manufacturers are anxious to meet wholesale
demand to reach customers as soon as possible, this is an unusual
development. And the BAPW believes that they may have worrying
consequences for patients.
Under usual circumstances, our members would
order from manufacturers the amount of stock they needed to meet
patient demands and deliver it quickly and safely up to four times
a day to hospitals and pharmacists, as it was required. However,
under the new quota systems, some manufacturers have begun to
set a limit on the amount they will supply to wholesalers.
But as in any market, demand for medicines peaks
and troughs. And when demand is high, some wholesalers have exceeded
the limits set on them by manufacturers who have then refused
to supply any more. Rather gravely, this means that with increasing
regularity, some of our members have been unable to supply local
doctors and pharmacists with the amount of medicines they need
to treat their patients. (The BAPW would be happy to provide more
details of where this has happened and with which manufacturers.)
We believe that the only way demand can accurately
be measured, and the supply chain to patients be made to work
properly, is for wholesalers, retailers and manufacturers to follow
the signals of the market. For generic medicines, wholesalers
could source products from alternative suppliers to meet demand
but in the case of proprietary medicines, manufacturers know that,
because of patent protection, they have a monopoly over supply—if
they do not supply their medicine, they know no one else can.
And to the safe and quick delivery of medicines to patients, this
could represent a serious impediment.
In most, if not all of these cases of supply
failing to meet demand, retailers will have been able to source
medicines from other wholesalers, but this may not always be the
case. If demand for a product were to peak—for instance
because of a high winter demand for a product—doctors and
pharmacists have little or no assurance that wholesalers would
be able to meet it because quotas limit the amount of stock they
are able to hold and supply. The BAPW therefore believes that
the quota system has the potential to seriously disrupt the supply
chain, slowing down access to vital medicines, and endangering
patients' lives.
Manufacturers may defend their actions by saying
that they have provided enough stock to satisfy demand, but patient
requirements and expectation in Penzance are not satisfied by
the stock only being available in Newcastle, or Manchester, for
example, where a pharmacist or doctor may have no relationship
with the wholesaler stocking it.
Whilst pharmaceutical wholesalers are firmly
committed to leading improvements in the supply chain (for example,
wholesalers provide the computer systems to 50% of the UK's pharmacies),
we believe that in this case the adage "if it ain't broke,
don't fix it" firmly applies. At the very least the pharmaceutical
industry should be able to make the case that this change has
made the supply chain more efficient and has real benefits for
those who need the medicines they supply—patients. We believe
that on this occasion it has not done so.
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