OFT attack on drugs distribution deals

►'Significant risk'of extra costs to NHS ► Inquiry ruled out on Pfizer and UniChem

Lilly Peel, Robin Pagnamenta Exclusive drug distribution deals that cut out wholesale suppliers, such as Pfizer's agreement with Alliance Boots, could cost taxpayers hundreds of millions of pounds, the Government has been told. A report by the Office of Fair Trading (OFT) published yesterday also raised concerns that exclusive "direct-to-pharmacy" schemes could result in patients having to wait longer for life-saving medicines. The watchdog found that such deals raised a "significant risk" of extra costs to the NHS because they allowed manufacturers to set prices paid by pharmacies. The OFT has urged the Government to change its pricing policy — the Pharmaceutical Price Regulation Scheme — to prevent this, but it says that pharmaceutical firms should be allowed to choose their methods of distribution. However, although such schemes may be more efficient, John Fingleton, the OFT chief executive, said: "The changes to the distribution of medicines are among the most significant for many years and have given rise to real concerns." He added that further action was needed to prevent increases in NHS medicine costs and to ensure that the standard of service provided by pharmacies to patients was satisfactory. In March, Pfizer, the world's largest drugmaker and the supplier of 15 per cent of Britain's prescription medicines, announced a deal with UniChem, the wholesaling arm of Alliance Boots, to bypass its traditional wholesale suppliers and sell directly to pharmacies. Since then, drug giants including Novartis and AstraZeneca have decided to restructure their British distribution channels. AstraZeneca plans to start its new scheme in 2008 using both UniChem and Celesio AG's