Healthy Skepticism Library item: 11336
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Pagnamenta R.
Pharmaceutical groups turn to home delivery
The Times (London, UK) 2007 Aug 28
http://business.timesonline.co.uk/tol/business/industry_sectors/health/article2337383.ece
Full text:
Drugs companies are turning increasingly to home delivery of medicines as a way to boost profits by cutting out wholesalers and pharmacists.
The total size of the UK market for pharmaceuticals delivered directly to patient’s doors is already worth an estimated £250 million and is growing at 10 to 15 per cent per year, according to Simon French, director of business development for Healthcare Logistics, a Bedford-based specialist in the field.
As well as helping drug companies to cut costs by taking greater control of the medicine supply chain, there is also a compelling financial motive for the NHS. Medicines delivered direct to a patient’s home are not subject to VAT, allowing cash-strapped local NHS Primary Care Trusts to shave millions of pounds off their total medicine bills.
Some high-value HIV and cancer drugs can cost £750 or £1,000 per patient month – and so the VAT savings for the NHS are considerable. By treating patients at home, primary care trusts can also save the cost of about £1,500 of administering drugs and treating patients in hospital.
Home delivery – by courier – has existed for several years in the UK, mostly as a specialist service for patients with conditions such as haemophilia, multiple sclerosis and rheumatoid arthritis, who require regular, repeat prescriptions of drugs that need to be administered by a nurse, often by injection.
However, drug companies are now branching out and adopting the practice for new disease areas and patient groups.
The widespread use of “biologic” drugs – made from living biological material, rather than from conventional pharmaceutical ingredients – is another factor.
Biologic drugs frequently have to be delivered chilled to patients shortly after they are manufactured – creating a logistical headache for traditional wholesalers and retailers.
A variety of drug companies are understood to be taking this approach, including Roche, of Switzerland, Bristol-Myers Squibb, of the United States, AstraZeneca, of Britain, and Sanofi-Aventis, of France.
The practice is already widespread in America, where drug treatment at home has been encouraged by health insurance groups because it is cheaper than treatment in hospitals.
It also allows drug companies to gather more detailed information about the consumers of their products – although by law they are required to distribute them through a third party and cannot do so entirely on their own.
Home delivery of medicines is frowned upon elsewhere and remains illegal in some European countries, including France. Unsurprisingly, the practice is also meeting stiff opposition from pharmacists in the UK, which stand to lose business.
Nevertheless, Mr French estimates that “hundreds of thousands” of patients in the UK already receive prescription drugs delivered directly to their homes. He estimates that already it may amount to as much as 5 per cent of the total UK market for pharmaceuticals in value terms.
The growth of the practice is likely to continue because pharmaceutical companies are turning to new biologic drugs to replace older products whose patents are expiring. It is among several changes in the British medicine supply chain as drug groups seek to bolster their profits as key products go off-patent.
In April, the Office of Fair Trading announced that it was conducting a review of Britain’s wholesale medicines market.
