Supply Chain Changes.ppt

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Supply Chain Changes.ppt

  1. 1. Supply Chain Changes A manufacturer’s perspective Mike Isles Andy Carr 24 May 2010
  2. 2. MPI Associates Limited
  3. 3. Andrew Carr Associates Ltd 24 May 2010
  4. 4. Two high level supply chain models <ul><li>More accurately DTC </li></ul><ul><ul><li>ie “Direct to Customer” channel </li></ul></ul><ul><ul><ul><li>Retail Pharmacists </li></ul></ul></ul><ul><ul><ul><li>Hospitals </li></ul></ul></ul><ul><ul><ul><li>Dispensing Doctors </li></ul></ul></ul><ul><li>Selling to: </li></ul><ul><ul><li>14,000 customers (from eg 14) </li></ul></ul><ul><li>Using “partners” to perform a range of distribution services </li></ul>24 May 2010 DTP <ul><li>Sell product to a small number of wholesalers </li></ul><ul><ul><li>Ownership of stock is still with wholesalers </li></ul></ul><ul><ul><li>Risks and rewards still owned by wholesalers </li></ul></ul><ul><ul><li>Commercial relationship with “customers” not owned by manufacturer </li></ul></ul><ul><ul><li>Downstream discounts determined by wholesalers </li></ul></ul>Reduced wholesaler There are benefits of both to manufacturers
  5. 5. Supply Chain – Traditional method 24 May 2010 Department of Health Manufacturer Control Outside Manufacturer Control pre-wholesaler / own warehouse ~14 Wholesalers Manufacturer Patient Pharmacy ?% ?% margin ? % 12.5% disc clawback
  6. 6. Supply Chain – Reduced wholesaling 24 May 2010 Department of Health Manufacturer Control Outside Manufacturer Control pre-wholesaler / own warehouse 2-3 Wholesalers Manufacturer Patient Pharmacy ?% ?% margin ? % ?% disc clawback
  7. 7. Supply Chain – DTP 24 May 2010 Department of Health Manufacturer Control Outside Manufacturer Control pre-wholesaler / own warehouse Agents/LSP Manufacturer Patient Pharmacy Man. terms ? % clawback Control & ownership move further down the Supply Chain
  8. 8. Manufacturers’ supply chain activity <ul><li>Pfizer (03/07) (U) </li></ul><ul><li>Astellas* (11/07) (U) </li></ul><ul><li>AstraZeneca (02/08) (A,U) </li></ul><ul><li>GSK (11/08) (A,U) </li></ul><ul><li>Lilly (07/09) (A,P) </li></ul>DTP <ul><li>Napp (10/07) (A,P,U) </li></ul><ul><li>sanofi aventis (11/07) (A,P,U) </li></ul><ul><li>Novartis (08/08) (A,U) </li></ul><ul><li>Roche (01/09) (A,U) </li></ul><ul><li>Janssen-Cilag (01/09) (A,P,U ) </li></ul><ul><li>Novo Nordisk (03/09) (P,U) </li></ul><ul><li>UCB* (11/09) (A,P,U) </li></ul><ul><li>S & N (06/09) (A,P,U) </li></ul><ul><li>Bayer Schering (07/09) (A,P,U) </li></ul><ul><li>BMS (08/09) (A,U) </li></ul><ul><li>MSD (10/09) (A,P,U) </li></ul><ul><li>LEO Pharma (10/09) (A,P,U) </li></ul>Reduced Wholesalers A – AAH Pharmaceuticals Ltd P – Phoenix Healthcare Distribution U – Alliance Healthcare (Distribution) (Unichem) * Product specific arrangements
  9. 9. Manufacturers’ supply chain partners <ul><li>Pfizer (03/07) </li></ul><ul><li>Astellas* (11/07) </li></ul>October 2009 U A – AAH Pharmaceuticals Ltd P – Phoenix Healthcare Distribution U – Alliance Healthcare (Distribution) (Unichem) * Product specific arrangements DTP programs <ul><li>GSK (11/08) </li></ul><ul><li>AstraZeneca (02/08) </li></ul><ul><li>Novartis (08/08) </li></ul><ul><li>Roche (01/09) </li></ul><ul><li>BMS(08/09) </li></ul>A & U <ul><li>Lilly (07/09) </li></ul>A & P <ul><li>Novo Nordisk (03/09) </li></ul>P & U <ul><li>Napp (10/07) </li></ul><ul><li>sanofi aventis (11/07) </li></ul><ul><li>Janssen-Cilag (01/09) </li></ul><ul><li>S & N (06/09) </li></ul><ul><li>Bayer Schering (07/09) </li></ul><ul><li>MSD(10/09) </li></ul><ul><li>LEO Pharma (10/09) </li></ul><ul><li>UCB (11/09) </li></ul>A, P, U
  10. 10. Why are manufacturers changing? 24 May 2010
  11. 11. PPRS – direct impact on prices 24 May 2010 PPRS price reductions 1993 – 2.5% 1999 – 4.5% 2005 – 7.5% 2009 – 3.9% 2010 – 1.9% Manufacturers have seen an 18% reduction in the price of their medicines over 18 years, with a large patent expiry cliff-edge approaching in forthcoming years
  12. 12. PPRS – impact of price cuts 24 May 2010 Pharma Manufacturers are exploring all avenues to mitigate the impact of price cuts
  13. 13. Why are manufacturers changing? 24 May 2010
  14. 14. Supply and distribution legacies 24 May 2010
  15. 15. Efficiency savings in UK distribution 24 May 2010
  16. 16. Why are manufacturers changing? 24 May 2010
  17. 17. Partnership approach 24 May 2010 Simplification, focus, opportunities Supply partners Supply partners
  18. 18. Win-win opportunities – Patient adherence/compliance 24 May 2010
  19. 19. Why are manufacturers changing? 24 May 2010
  20. 20. Increased visibility <ul><li>Getting closer to the point of medicine delivery brings the following benefits for manufacturers: </li></ul><ul><ul><li>End–to-end supply chain visibility </li></ul></ul><ul><ul><li>Reduction of product wastage </li></ul></ul><ul><ul><li>Commercial relationships with end contractors (pharmacists/D Doctors) </li></ul></ul><ul><ul><li>Reliable information on who is buying product </li></ul></ul><ul><ul><li>Management of increased demand </li></ul></ul>24 May 2010
  21. 21. Management of supply 24 May 2010
  22. 22. Why are manufacturers changing? 24 May 2010
  23. 23. Safety & security 24 May 2010
  24. 24. Summary 24 May 2010
  25. 25. Supply Chain Changes A manufacturer’s perspective Mike Isles Andy Carr 24 May 2010

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