Supply Chain Changes.ppt

© 2008 Andrew Carr Associates LtdAll Information is Strictly Private and Confidential and may

not be reproduced without consent of Andrew Carr Associates Ltd

9 April 2023 1

Supply Chain Changes

A manufacturer’s perspective

Mike Isles Andy Carr



MPI Associates Limited



9 April 2023 3

Andrew Carr Associates Ltd



9 April 2023 4

Two high level supply chain models

•More accurately DTC–ie “Direct to Customer” channel

– Retail Pharmacists– Hospitals– Dispensing Doctors

•Selling to:– 14,000 customers (from eg 14)

•Using “partners” to perform a range of distribution services

DTP

• Sell product to a small number of wholesalers

– Ownership of stock is still with wholesalers

– Risks and rewards still owned by wholesalers

– Commercial relationship with “customers” not owned by manufacturer

– Downstream discounts determined by wholesalers

Reduced wholesaler

There are benefits of both to manufacturers



9 April 2023 5

Supply Chain – Traditional method

Department of Health

Manufacturer Control Outside Manufacturer Control

pre-wholesaler /

own warehouse

~14 Wholesalers

Manufacturer

Patient

Pharmacy

?%

?%

margin

? %

12.5%

disc

clawback



9 April 2023 6

Supply Chain – Reduced wholesaling



pre-wholesaler /

own warehouse

2-3 Wholesalers

Manufacturer

Patient

Pharmacy

?%

?%

margin

? %

?%

disc

clawback



9 April 2023 7

Supply Chain – DTP



pre-wholesaler /

own warehouse

Agents/LSP

Manufacturer

Patient

Pharmacy

Man.

terms

? %

clawback

Control & ownership move further down the Supply Chain



8

Manufacturers’ supply chain activity

1. Pfizer (03/07) (U)

2. Astellas*(11/07) (U)

3. AstraZeneca (02/08) (A,U)

4. GSK (11/08) (A,U)

5. Lilly(07/09)(A,P)

DTP1. Napp(10/07)

(A,P,U)

2. sanofi aventis (11/07)

(A,P,U)

3. Novartis (08/08) (A,U)

4. Roche (01/09) (A,U)

5. Janssen-Cilag(01/09)

(A,P,U)

6. Novo Nordisk (03/09) (P,U)

7. UCB* (11/09)(A,P,U)

8. S & N (06/09)

(A,P,U)

9. Bayer Schering(07/09)(A,P,U)

10. BMS(08/09) (A,U)

11. MSD (10/09) (A,P,U)

12. LEO Pharma (10/09) (A,P,U)

Reduced Wholesalers

A – AAH Pharmaceuticals Ltd

P – Phoenix Healthcare Distribution

U – Alliance Healthcare (Distribution) (Unichem) * Product specific arrangements



October 2009 9

Manufacturers’ supply chain partners

1. Pfizer (03/07)

2. Astellas*(11/07)

U

A – AAH Pharmaceuticals Ltd

P – Phoenix Healthcare Distribution

U – Alliance Healthcare (Distribution) (Unichem) * Product specific arrangements

1. GSK (11/08)

2. AstraZeneca (02/08)

3. Novartis (08/08)

4. Roche (01/09)

5. BMS(08/09)

A & U1. Lilly(07/09)

A & P1. Novo Nordisk

(03/09)

P & U1. Napp(10/07)

2. sanofi aventis (11/07)

3. Janssen-Cilag(01/09)

4. S & N (06/09)

5. Bayer Schering(07/09)

6. MSD(10/09)

7. LEO Pharma (10/09)

8. UCB (11/09)

A, P, U

DTP programs



Why are manufacturers changing?

9 April 2023 10



PPRS – direct impact on prices

9 April 2023 11

PPRS price reductions1993 – 2.5%1999 – 4.5%2005 – 7.5%2009 – 3.9%2010 – 1.9% 0

5

10

15

20

1993 1999 2005 2009 2010

Cummulative price reduction

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



PPRS – impact of price cuts

9 April 2023 12

Pharma Manufacturers are exploring all avenues to mitigate the impact of price cuts




9 April 2023 13



Supply and distribution legacies

9 April 2023 14



Efficiency savings in UK distribution

9 April 2023 15




9 April 2023 16



Partnership approach

9 April 2023 17

Simplification, focus, opportunities

Supply partners Supply partners



Win-win opportunities – Patient adherence/compliance

9 April 2023 18




9 April 2023 19



Increased visibility

• Getting closer to the point of medicine delivery brings the following benefits for manufacturers:– End–to-end supply chain visibility

– Reduction of product wastage

– Commercial relationships with end contractors (pharmacists/D Doctors)

– Reliable information on who is buying product

– Management of increased demand

9 April 2023 20



Management of supply

9 April 2023 21




9 April 2023 22



Safety & security

9 April 2023 23



Summary

9 April 2023 24



9 April 2023 25

Supply Chain Changes

A manufacturer’s perspective

Mike Isles Andy Carr

Supply Chain Changes.ppt

Documents

Transcript of Supply Chain Changes.ppt