This presentation by Valérie Paris was made at the 2014 Global Forum on Competition (27-28 February) during the session on competition issues in the distribution of pharmaceuticals. Find out more at http://www.oecd.org/competition/globalforum

1. A CORE SET OF INDICATORS TO
CHARACTERISE AND ASSESS THE
DISTRIBUTION CHAIN IN THE
PHARMACEUTICAL SECTOR
Valérie Paris – OECD Health Division
Global Forum on Competition
28 February 2014, OECD, Paris

2. Information regularly published on
pharmaceutical distribution
•
OECD: a few questions in previous Product Market Regulation survey; # of
pharmacists in OECD Health Statistics
•
WHO
– European Health for all database: # of pharmacists and pharmacists
graduated
– WHO pharma country profiles data and reports: # pharmacies and
pharmacists; accreditation of pharmacies ; inspection and quality
controls for distributors, implementation of good distribution
practices, pricing policy, distribution mark-ups and taxes; public sector
procurement and distribution; private sector distribution
•
PHIS information system (European countries):
– Density of POM dispensaries; type of price regulation at
manufacturer, wholesale and pharmacy levels, taxes on pharmaceuticals
and reference prices systems
– PPRI and PHIS Country profiles: regulation of wholesalers and retail
distributors; # of wholesales and retailers; regulation of mark-ups
2

3. Objectives of the presentation
Propose a core set of indicators (qualitative and
quantitative) for a possible data collection in order to:
• Describe the regulation and characteristics of the
distribution of pharmaceuticals in countries
• Assess the effectiveness of a country’s distribution chain
Taking account availability of data for a maximum of
countries
3

4. Regulation of wholesalers and market
structure
Regulation
• Regulation of ownership and licensing;
• Regulation of vertical integration of retailers;
• Public service obligations: range of products (full- vs shortliners), delivery delays;
• Regulation of mark-ups;
• Regulation of discounts to pharmacies.
Market structure
• Number of wholesalers by type
• Market concentration.
4

5. Wholesale remuneration scheme – out-patient sector 2010
AT
BE
BG
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
Price control at
wholesale level
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Scope of medicines
Type
All medicines
All medicines
POM
Reimbursable
POM, reimbursable OTC
All medicines
All medicines
All medicines
Reimbursable
All
Reimbursable
Reimbursable
Reimbursable
All medicines
All medicines
All medicines
Reimbursable
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Linear mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Linear mark-up/margin
Linear mark-up/margin
Regressive mark-up/margin
Different6
Regressive mark-up/margin
Linear mark-up/margin
Linear mark-up/margin
Note: The table is incomplete,
Source: PHIS database, available at https://phis.goeg.at
5

6. Regulation of retail distribution and
number of retailers
Regulation
- Types of retailers allowed to distribute medicines (POM and OTC):
pharmacies, dispensing doctors, other outlets, internet retailers
- Regulation of ownership for pharmacies (Is ownership reserved to
pharmacists? Can a pharmacist own several pharmacies?)
- Regulation of establishment of new pharmacies? (Quotas per
population; Distance between pharmacies; other)
- Service obligations for pharmacies (Regulation of opening hours;
range of products, provision delays)
- Regulation of mark-ups and/or retail prices.
Market characteristics
- Number and density of retail POM dispensaries (by type)
6

7. Pharmacy remuneration scheme – out-patient sector 2010
C.
Scope of medicines
Type
AT
BE
BG
CZ
DE
Price control at
pharmacy level
Yes
Yes
Yes
Yes
Yes
All medicines
All medicines
POM
Reimbursable
POM, reimbursable OTC
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Different
EL
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
All medicines
Reimbursable
All medicines
Reimbursable
Reimbursable
Reimbursable
All medicines
All medicines
All medicines
POM
Reimbursable
POM, reimbursable OTC
POM
POM
Linear mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin
Linear mark-up/margin
Linear mark-up/margin
Regressive mark-up/margin
Different
Regressive mark-up/margin
Linear mark-up/margin
Fees
Regressive mark-up/margin
Linear mark-up/margin
Regressive mark-up/margin
Regressive mark-up/margin12
Note: The table is incomplete,
Source: PHIS database, available at https://phis.goeg.at
7

8. Outcomes: Assessing distribution costs
Manufacturer’s selling price
+ Mark-ups added on at various points of the supply chain
+ National and regional taxes + VAT
- Discounts and rebates
+Fixed pharmacy fee, dispensing fee or prescription fee
= retail price
8

9. Outcomes: Distribution costs
Some data are also available
on mark-ups observed
on essential medicines
in M&LIC from ad-hoc surveys
or studies by WHO-HAI)

10. Outcomes: Assessing availability of
medicines
• Density of POM dispensaries, geographical distribution and/or
distance to the closest dispensary;
• Occurrence of shortages in supply - Monitoring of product shortages
is sometimes available at national level
• Actual availability more difficult to measure, especially in M&LIC
(WHO-HAI conduct surveys in outlets)
10

11. Outcomes: Quality of supply
• No simple indicator to measure quality (of services and products)
• Density of pharmacists or health professionals with a minimum
training in pharmacy can be used as a proxy for the quality of service
(POM)
• The existence of policies of on inspections and control of
distribution facilities and/or products (collected in WHO country
profiles) are indicators of process
• Data on counterfeit medicines are scarce (but in expansion)
11