Pharmacy Liberalisation in Europe

Summary

Very little in the pricing environment in Europe is predictable to pharmaceutical companies and only rarely is much notice given of change. But before the end of 2009, if the European Court of Justice accepts the arguments put to it forcefully by the European Commission and by DocMorris, revolutionary reform among industry's main customer group, the community pharmacist, in several of the main countries, including 4 of the EU-5, will get the green light. The main issue to be resolved, whether national regulations on pharmacy ownership and establishment of new premises infringe EU law, is of wider importance than for the pharmacy profession alone. It amounts to a battle over control of healthcare provision between Brussels and the member states, with the outcome also of great significance to patients, wholesalers, manufacturers and payers.

'Pharmacy Liberalisation in Europe: Prospects and Implications' provides fully-researched, up-to-date information and interpretation on what deregulation could mean to all participants in the medicines' market. Whether your interest is in marketing prescription brands, generics or OTCs, in their distribution, or in paying the bill for them, this report is for you. To be forewarned of what might happen will allow adequate preparation for it.

The report addresses:

• Background and current status of infringement actions brought by the European Commission against seven EU member states, plus the key ECJ case involving the controversial DocMorris pharmacy in the German city of Saarbrücken.
• The arguments for and against reform.
• What might happen, who would be the winners and the losers.
• Details of the current ownership structure, and ownership and establishment rules for pharmacies in countries all across Europe from Iceland to Cyprus.
• Interdependency of pharmacy and wholesaling, and how this could evolve.
• What lessons can be found from markets that have already deregulated.
• How vertical integration impacts reimbursement of multisource products and the response by payers to this.
• The latest on plans to break up Apoteket's pharmacy monopoly in Sweden.

Contents

Executive Summary

1. Background
1.1 Community Pharmacy
1.2 Pharmacy Regulations
1.3 Intervention by the European Commission
1.4 Limitations on Commission Action

2. The Arguments
2.1 National Developments
   2.1.1 Italy
   2.1.2 Germany
   2.1.3 Spain
   2.1.4 Austria
   2.1.5 France
   2.1.6 Portugal
2.2 Other Contributions to the Debate
   2.2.1 ÖBIG Report for PGEU
   2.2.2 ECORYS Report for European Commission
2.3 ECJ Oral Hearing in Italian and DocMorris Cases
2.4 Other Commission Interventions Concerning Pharmacy

3. Deregulation to Date
3.1 National Situation
   3.1.1 Bulgaria
   3.1.2 Germany
   3.1.3 Hungary
   3.1.4 Iceland
   3.1.5 Ireland
   3.1.6 Lithuania
   3.1.7 Malta
   3.1.8 Netherlands
   3.1.9 Norway
   3.1.10 Poland
   3.1.11 Portugal
   3.1.12 Sweden
   3.1.13 Switzerland
   3.1.14 UK
3.2 Liberalisation of OTC Sales Channels

4. What Could Happen
4.1 More Pharmacies?
4.2 Are More Pharmacies Needed?
4.3 Greater Price Competition?
4.4 Pharmacy Acquisition by Wholesalers?
   4.4.1 Profiles of Leading Wholesalers with Pharmacy Chains
     4.4.1.1 Alliance Boots
     4.4.1.2 Celesio
     4.4.1.3 Phoenix
     4.4.1.4 OPG
   4.4.2 Wholesalers' Future Vision
   4.4.3 Other Wholesalers with Pharmacy Chains
   4.4.4 Other Forms of Wholesaler Involvement in Pharmacies
   4.4.5 Pharmacist Ownership of Wholesalers
4.5 Pharmacy Acquisition by Other Types of Companies?
4.6 Distribution Changes in Sweden?

5. Implications
5.1 For Patients
5.2 For Pharmacy
5.3 For Other Professions
5.4 For Wholesalers
5.5 For Manufacturers
   5.5.1 Impact on Rebate Agreements in Germany
   5.5.2 Higher Distribution Costs in Sweden
   5.5.3 Expansion of Homecare
5.6 For Governments/Third Party Payers
   5.6.1 Reimbursement Problems with Multisource Products
   5.6.2 Clawback Ineffective
     5.6.2.1 UK
     5.6.2.2 Netherlands
     5.6.2.3 Sweden

List of tables
1.1 Pharmacy and pharmacist demography in Europe
1.2 Share of medicine sales from wholesalers by customer group
1.3 Is it possible for a non-pharmacist to own a pharmacy?
1.4 Pharmacy regulation indices
1.5 Timetable of EU proceedings against pharmacy regulations
3.1 Pharmacies in Iceland
3.2 Leading pharmacy chains in Ireland
3.3 Leading pharmacy chains in Lithuania  
3.4 Leading pharmacy chains in the Netherlands
3.5 Ownership structure of community pharmacies in Norway
3.6 Evolution of pharmacy numbers and share of chains in England
3.7 Evolution of supermarket pharmacies in UK
3.8 Evolution of large pharmacy chains in UK
4.1 Evolution of pharmacy numbers across Europe, 1995-2006
4.2 Other access points for medicines in Europe
4.3 Ranking of Europe's 'big 3' wholesalers by country
4.4 Pharmacy ownership by leading wholesalers
4.5 Other wholesaler-owned pharmacy chains
4.6 Share of community pharmacies in virtual chains

Appendices
1. Pharmacy Ownership and Establishment Criteria, 2008
2. European and National Pharmacy Associations