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OFT report praised by EAASM chairman

The chairman of the European Alliance for Access to Safe Medicines, Jim Thomson, welcomes the findings of the OFT report on direct-to-pharmacy supply models adopted by a number of pharmaceutical companies

The chairman of the European Alliance for Access to Safe Medicines (EAASM), Jim Thomson, has welcomed the findings of the Office of Fair Trading (OFT) report regarding direct-to-pharmacy (DTP) supply models adopted by a number of pharmaceutical companies.

Thomson said: "I welcome the OFT findings. I think them extremely fair. It is essential that fair prices are maintained and that supply is assured. The OFT has struck a blow for patients. Indeed, it has struck two. It has warned of the risks of badly implemented DTP, while identifying the benefits of DTP."

"I also applaud the OFT for championing this concern and for recommending on behalf of patients measures to protect against it. That said, to assume that DTP is about pricing alone is to completely miss the point. What DTP does is add security to the supply chain. This is the security that patients deserve doctors crave. One of the less publicised findings from the recent MORI/MHRA surveys is that doctors are tremendously concerned about counterfeits," concluded Thomson.

The OFT report said that direct-to-pharmacy (DTP) models adopted by pharmaceutical companies may carry a "significant risk" of higher costs to the NHS.

The OFT report focuses on the implementation of a supply arrangement between Pfizer and UniChem, the wholesale business of Alliance Boots, which had caused widespread concern in the industry earlier in 2007. The company sells the drugs directly to pharmacies and pays UniChem a set fee to deliver them. Medicines are normally distributed through a network of wholesalers, competing to supply pharmacists at discounted prices.

The OFT has made several recommendations as to how the government could deal with the issue in its Pharmaceutical Price Regulation Scheme (PPRS) negotiations, including reducing the list prices of drugs by an amount equivalent to the average discounts received by pharmacies.

The OFT has not discounted action under the Competition Act should competition issues arise from drug manufacturers using too few wholesalers.

12th December 2007

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