‘‘Direct to Direct to Pharmacy’Pharmacy’

David WatsonDavid Watson

Trade DirectorTrade Director

Pfizer LtdPfizer Ltd

HeadlinesHeadlines

We’ll boycott Pfizer brands, warn contractorsC&D 7 October 2006

We’ll boycott Pfizer brands, warn contractorsC&D 7 October 2006

This is a bad move for PharmacistsSteve Dunn , C&D 7 October 2006

This is a bad move for PharmacistsSteve Dunn , C&D 7 October 2006

Public scrutiny will exonerate PfizerThe Times October 2006

Public scrutiny will exonerate PfizerThe Times October 2006

Pfizer upsetting the apple cartPharma Times November 2006

Pfizer upsetting the apple cartPharma Times November 2006

Supply chain control

Supply chain control

Changing portfolio

Changing portfolio

Power of wholesalers

Power of wholesalers

Integrity ofsupply

Integrity ofsupply

Patientsafety

Patientsafety

Pharmacycustomer

Pharmacycustomer

Why the change?Why the change?

All UK wholesalers with national coverage were invited to participate in negotiations – RFP

After intensive discussions and a comprehensive due diligence programme, Unichem were appointed as an LSP on an initially exclusive basis

After initial AAH agreement to heads of terms, AAH withdrew in January 2006, notified to Pfizer by Celesio Headquarters

Appointment processAppointment process

Pharmacists can buy Pfizer products directly from Pfizer, ownership and visibility of Pfizer products remains with Pfizer until sale to the pharmacist

Pfizer has appointed UniChem as a Logistics Service Provider (LSP) to carry out a full range of services on behalf of Pfizer, for which Pfizer will pay UniChem a fee per pack

Pfizer does not sell Pfizer products to Unichem or to any other wholesaler, Unichem does not act as a wholesaler in relation to UK sourced Pfizer products

Pricing and discounting on Pfizer products the responsibility of Pfizer

How does DTP workHow does DTP work

you’re forcing me to buy from UniChem…

you’re forcing me to buy from UniChem…

You can’t cover the

whole of the UK

You can’t cover the

whole of the UK

You can’t dictate your own discount

scheme

You can’t dictate your own discount

scheme

UniChem don’t have

the capacity

UniChem don’t have

the capacity

UniChem will preferably

supply Boots

UniChem will preferably

supply Boots

ChallengesChallenges

What if UniChem

go on strike

What if UniChem

go on strike

My mailboxMy mailbox

Key metrics: 97% of all ‘dispensing points’ in the UK have

ordered products from Pfizer 6.9 million units have been delivered 99.7% ‘on time, in full’ delivery accuracy

First 3 monthsFirst 3 months

Pfizer has the ability to through DTP to develop a new pharmacy commercial value proposition and service approach

UK Pharmacy has an emerging role in the management of patient treatment through the new Pharmacy contract

Changes in Pfizer portfolio in the next few years mean pharmacy purchasing choice becomes a more important factor in the growth of many Pfizer products

Pfizer are developing a number of customer facing strategies to support our wide portfolio, and provide additional services to pharmacy

Commercial OpportunityCommercial Opportunity

OFT short term studyOFT short term study

Market study – not a review specifically on Pfizer Many different (and conflicting) interests and opinions

have been heard Market practices on discounting arrangements in the UK

are not transparent Evolution of the pharmaceutical distribution market

difficult to predict

What happens nextWhat happens next

Other Pharma Co’s may make similar changes (AZ, Lilly, Sanofi Aventis)

Some may focus on Hospital distribution rather than the entire community pharmacy customer base

Wholesaler business impact depends on market change over time – not simply Pfizer move

Wholesalers willingness to embrace change and compete effectively against new entrants in sector?

Pharma Industry increasingly focusing on the role of the Pharmacist in provision of healthcare

david.s.watson@pfizer.comdavid.s.watson@pfizer.com