The Pharmaceutical Sector:- Pain and Gain Points

Transcription

1 The Pharmaceutical Sector:- Pain and Gain Points Controlled by Pharma Co Potentially Value Enhancing Product Prescription Creating Awareness Product Development Product Approval Product Production Product Distribution Gnome Clinical Trials Sourcing Primary Product Fulfilment Dispensing the product Bio Tech Applicators Nano Tech Govt Approval Packaging Packaging Secondary Controlled by Others Potentially Value Reducing

2 The Pharmaceutical Sector:- Pain and Gain Points Controlled by Pharma Co Potentially Value Enhancing Product Development Product Approval Product Production Product Distribution Product Prescription Creating Awareness Bio Tech Applicators Gnome Nano Tech Clinical Trials Govt Approval Sourcing Packaging Packaging Primary Secondary Product Fulfilment Dispensing the product PAIN POINTS Controlled by Others Potentially Value Reducing Pipeline Development GAIN POINTS Clinical Trails Risk / reward share Product Development Managing Off Patent Solutions that meet Healthcare needs Customer Management & Influence Improved Customer Management & Influence

3 FIRST SPEAKER Henley Pharma Forum Reinventing the Value Chain Jeff Bulmer AAH Pharmaceuticals Ltd

4 Henley Pharma Forum Reinventing the Value Chain Jeff Bulmer AAH Pharmaceuticals Ltd

5 Reinventing the Value Chain an eclectic view Topics My list of lily pads Personal Background Challenges to the Pharma Industry Reinventing the Value Chain? Or just getting to grips with it? State of play today Looking forward

6 My Background Science, People & Business Pharmaceutical industry 15 years May & Baker, RPR (Sanofi Aventis), Knoll/BASF (Abbott) Production & warehousing Sales & marketing UK & International Prescription & OTC Market research, sales management Marketing Director Commercial Licensing, Logistics, PPRS, Strategic Plan ABPI N.East Regional Chairman Commercial Director AAH Pharmaceuticals 7 years Hospitals, now Pharma Services Manufacturer Solutions, BAPW Council

7 Challenges to the Pharma Industry Pipeline & patents Global balance & funding Global trade Legal & illegal challenges (Public perception)

8 Pipeline & Patents R&D Phases Launch Lab Animal Human Phase I Phase II Phase III Phase IV Safety Works on Symptoms IIIa Clinical Effectiveness Post launch New indications Years From First Patent (Approx) IIIb Cost Effectiveness Number of Products Patented (Approx) 10, SPCs +5 Blockbusters Blockbusters off off patent, patent, pipelines pipelines delayed delayed and and disappointing disappointing Generics Generics will will represent represent about about 85% 85% of of the the pharma pharma volume volume in in Branded Branded Rx Rx growth growth mainly mainly driven driven by by Specialty Specialty Pharmacy, Pharmacy, High-tech, High-tech, Oncology Oncology high-priced high-priced niche niche products products with with specific specific distribution distribution requirements requirements

9 Global Value Balance rebalancing Africa 15% ROW 10% USA 5% Asia 59% Population Europe 11% Asia 17% ROW 12% Sales USA 41% Europe 30%

10 Global Trade

11 Legal & Illegal Challenges Product Liability Mass actions Clinical trials Counterfeits Global Broad attack Public Public perception, Public Public scrutiny

12 Reinventing the Value Chain? Or just getting to grips with it? 4 Ps of marketing Discovering value in the supply chain? Releasing value from the supply chain?

13 4 Ps of marketing A personal view Getting to grips with the supply chain is just good marketing Prescription medicines marketing

14 Where does the value come from? Factory Treasury? Rep NHS Patient GP NICE FP10 Wholesaler Budget holders? Patient NHS Pharmacist Funding Commissioners Deliverers Dispensers? Zones Zones of of Uncertainty Zone Zone of of Certainty Distributors Patient?

15 What s in the Supply Chain? Manufacturers Commercial Information Physical Dispensing, Distribution, User

16 What can be released from the Supply Chain? Manufacturers Commercial Information Physical Outbound logistics delivery Negotiation / tendering Patient / Treatment Transportation Transportation Invoicing Reimbursement Price / Order flow Competition Consumption Storage Delivery Point of Use storage Unit dose / Home delivery Outboung logistics Holding area Collection of returns/ waste Dispensing, Distribution, User

17 Releasing Value an example Implications of poor compliance for the industry treatment harder to prove effective fewer pills are taken negative impact on turnover and profit Industry has strong need to increase adherence

18 Example - Adheris intervention programs for pharmacies The process flow: Adheris' patented OnSyte Technology allows to carefully track refill activity while protecting patients' private information. Sources:

19 State of Play Today Distribution Routes Internet Homecare Streamlined Wholesale DTP Europe

20 Distribution Routes Supplier Pre Wholesale Wholesale Dispenser Consumers A: Supplier Distr.I Direct to WS Pre Wholesale (Transport & Logistics) Wholesale Tied Chains Self Distributing Chains National Chains Regional multiples Independents Hospitals B: Supplier Distr. Pre Wholesale - full service (Transport, Logistics and O2C) Doctors C: Supplier Distr. Direct to Consumer Home Delivery (Internet)

21 Upstream Ethical Flows Contractor UK Portuguese Plants Contractor Italy French Plants Spanish Plants Contractor Italy Contractor Italy Contractor Spain UK DISTRIBUTION CENTRE Hungarian Plants Contractor Germany Polish Plants German Plants Export Platform France Italian Plants Export Platform Germany : UK Plants UK Distributor contractor Netherlands

22 Downstream UK Flows to Market RETAIL PHARMACIES Ethical & generic FULL LINE WHOLESALERS DISPENSING DOCTORS HOSPITALS RETAIL PHARMACIES UK DISTRIBUTION generic SHORT LINE WHOLESALERS MULTIPLES HOSPITALS CENTRE Ethical & generic RETAIL PHARMACIES PATIENT Ethical & generic HOSPITALS PATIENT Ethical PROMOTIONAL MATERIAL MEDICAL REPS Ethical (Consignment) - OTC Products for Grocery Stores GROCERY STORES Ethical CLINICS/DENTISTS PATIENT RETAIL PHARMACIES UK Distributor Ethical FULL LINE WHOLESALERS DISPENSING DOCTORS HOSPITALS Ethical HOME DELIVERY COMPANIES PATIENT Ethical CLINICS PATIENT UK Distributor generic FULL LINE WHOLESALERS RETAIL PHARMACIES

23 Internet & Homecare Ryan Haight DocMorris RPSGB click through logo Direct marketing opportunity (data protection/confidentiality) Repeat Dispensing Internet, Hub & Spoke, Homecare lo-tech & hi-tech Significant, high growth Personalised to patient Product proposition

24 Current Distribution Changes Unrestricted Wholesalers Streamlined Wholesale DTP / AGENCY

25 Current Distribution Changes - Market Commentary Generally very quiet after the initial shock of the first change The perception of choice Some reluctant acceptance Considerable change in pharmacy Focus on the consequences Service Supply continuity, market shortages Financial challenge, particularly clawback (and Category M,..and PPRS?)

26 Which Alternative Distribution Model? Why? Why? Efficiencies Efficiencies Control Control Visibility Visibility Product Product How How many many partners? partners? 10, 10, , 4, 3, 3, 2 2 wholesalers? wholesalers? Geographical Geographical Reach, Reach, Account Account coverage coverage Customer Customer access access Solus Solus Distributor? Distributor? Not Not in in a a Wholesale Wholesale model model Accounts Accounts Service Service and and capability capability DTP DTP Specific Specific Situation Situation Implementation Implementation Streamlined Streamlined wholesale wholesale Relatively Relatively simple simple - - stock stock and and communications communications DTP DTP Full Full and and significant significant business business project project Legal, Legal, Finance, Finance, IT, IT, Quality, Quality, Sales Sales

27 Which Alternative Distribution Model? What What are are the the benefits? benefits? Streamlined Streamlined wholesale wholesale Demand Demand aggregation aggregation Reduced Reduced internal internal complexity complexity Enhanced Enhanced internal internal and and partner partner communications communications Minimal Minimal customer customer disruption disruption Recognisable Recognisable DTP DTP Account Account ownership ownership 1 1 to to 1 1 relationship relationship with with pharmacy pharmacy Direct Direct information information flows flows What What are are the the concerns? concerns? Streamlined Streamlined wholesale wholesale Resale Resale model model AAH AAH customers customers and and obligations obligations Cannot Cannot place place restrictions restrictions on on trade trade or or supply supply Customer Customer visibility visibility legally legally constrained constrained DTP DTP Costs Costs Stock Stock buy buy back, back, Systems Systems build, build, Customer Customer Services, Services, Account Account Management, Management, Debt Debt control control Data Data management management Aligning Aligning multiple multiple data data feeds, feeds, speed speed of of response/frequency response/frequency of of response response Customer Customer choice choice and and resilience resilience Understanding Understanding product product flows flows Risk Risk and and accountability accountability

28 Looking Forward Rationalisation of distributors Pan European logistic solutions National distribution solutions Clarity and understanding Using the supply chain Customer segmentation Product positioning Hybrid Distribution Models DTP and Streamlined Wholesale Trust and Confidence Releasing Added Value

29 Stakeholder Perspectives - Government Safe, Safe, reliable, reliable, resilient resilient Cost Cost neutral, neutral, cost cost effective effective Transparency Transparency Enhanced Enhanced healthcare healthcare Pharma Industry Price Price benefit benefit not not likely likely Internal Internal efficiencies efficiencies Added Added Value Value --sales sales benefit benefit Partial Partial transparency transparency Distributors Efficiency Efficiency max d max dout out Loss Loss of of cross cross subsidisation subsidisation Short Short term term rationalisation rationalisation Technical Technical build build Service Service differentiation differentiation Pharmacy Choice Choice reliability reliability Switch Switch to to clinical clinical service/ service/ income income Clawback Clawback Loss Loss of of purchasing purchasing profits profits

30 Fundamental Structures Manufacturer Wholesaler Reseller Pharmacy Patient Wholesale Distribution Partner Manufacturer Pharmacy Patient

31 Eventual Distribution Routes a mixed economy Supplier Pre Wholesale Wholesale Dispenser Consumers Direct to WS Classic Wholesale Tied Chains Self Distributing Chains National Chains Regional multiples Branded Generic OTC Pre Wholesale (Transport & Logistics) Streamlined Wholesale DTP via wholesaler Independents Hospitals Doctors Pre Wholesale - full service (DTP) Home Delivery (Internet) Direct to Consumer

32 Thank You