Just three weeks after the UK’s Office of Fair Trading announced an investigation into exclusive distribution arrangements launched by Pfizer, AstraZeneca has gone ahead with plans to do the same thing.

The move wasn’t a shock; the drugmaker indicated earlier it would do so. Like Pfizer, AstraZeneca struck a deal with Alliance Boot’s UniChem, but also AAH Pharmaceuticals, and explained the change as a way to “simplify and modernise” supply arrangements.

Nonetheless, the move is likely to spur further controversy, as complaints were already piling up from doctors, pharmacists and wholesalers. Independent wholesalers argue that exclusive distribution deals stifle competition and could undermine the flexible round-the-clock drug-ordering and delivery service.

At the time it struck its deal, Pfizer explained its distribution shift as a way to discourage counterfeiting, but wholesalers charge the drugmaker was trying to eliminate parallel trade, which is legal in Europe. In other words, the real issue for drugmakers is pricing.

It may be worth remembering that the UK’s National Health Service spends nearly $20 billion a year on meds. The OFT recently ssued a report saying that was too much and urged greater use of generics and caps on profits of branded meds.

The OFT, which will report back by year’s end, has said a specific investigation into the Pfizer deal isn’t ”appropriate at this stage,” but didn’t rule it out. Indeed, this jousting will escalate as big pharma attempts to force changes in the UK system. This issue is becoming just as volatile as the skirmishes in the US over pricing and another escalation in the struggle between governments and industry over the best system for providing affordable medicine and profits

Further reading…
Reuters;
OFT statement;
OFT reasons for the probe.[tags]AstraZeneca, Office of Fair Trading[/tags]