Competition issues in the distribution of pharmaceuticals

2014 GLOBAL FORUM ON COMPETITION LOOKS AT PHARMACEUTICALS DISTRIBUTION MARKET 

Pharmaceuticals are very special products, because of the peculiar characteristics of their demand and supply. Hence their distribution from the manufacturers till the final consumer is heavily regulated to ensure that drugs are accessible, affordable, and safely consumed. Despite this need for regulatory constraints, competition can and should play a role in ensuring that the market for the distribution of pharmaceuticals works well for consumers, so that these can benefit from higher quality, greater choice and variety, more innovation and lower prices.

The 2014 Global Forum on Competition (27-28 February) debated competition issues in the distribution of pharmaceuticals during its second day of discussions.

The full-day session provided an overview of how competition works in this market, to identify the main problems that can arise at different levels of the distribution chain and to better understand the interplay between competition and regulation.

Participants were encouraged to discuss competition cases, and the way regulations (or other forms of government intervention) interact with competition throughout the supply chain, and any advocacy efforts arising from such analysis.

Six experts lived up the discussion and delegations had the opportunity to further discuss the topic during breakout sessions in the afternoon.

See below the key findings from this discussion and all related documentation. 

All Competition Policy Roundtables

SEE ALSO

Generic pharmaceuticals and competition (2014)

Generic Pharmaceuticals (2009)

Competition Issues in the Pharmaceutical Industry (2000)

Competition in Hospital Services (2012)

Competition, Patents and Innovation (2009)

Competition Home Page ‌

Key findings from the discussion include:

1. Policy-makers and enforcers need to understand the distinctive economic features of the pharmaceuticals sector thoroughly to be able to intervene in this sector.
   
   
2. Better enforcement of regulation and of competition law, more consumer information, and greater control over the incentives provided by manufacturers to doctors could improve outcomes in the distribution of pharmaceuticals in less developed countries.
   
   
3. Mechanisms used to regulate drug prices can have varying effects on competition. Competition authorities are well placed to help guide the choice of the most appropriate ones.
   
   
4. Drug price regulation and limited patent length are not sufficient to ensure vigorous competition between originators and generics. Competition, public cost-efficiency and private affordability can be further fostered by measures to promote generics.
   
   
5. Forward integration by manufacturers and backward integration by pharmacy chains are changing the traditional structure of the pharmaceutical supply chain and are raising new competition issues.
   
   
6. The extensive historic regulation of the retail pharmacy sector in many countries should be assessed considering its impact on consumer welfare.

GLOBAL FORUM SESSION DOCUMENTATION

Full Global Forum Programme | Forum Pictures

Panellists, related papers and presentations

Background Note | Note de Référence

• Farasat BOKHARI (Senior Lecturer in Economics, University East Anglia) presenting Evaluating wholesale and retail mergers in pharmaceuticals English | Français | PPT
  
  
• Aidan HOLLIS (Professor, University of Calgary, Canada)  PPT
  
  
• Panos KANAVOS (Reader in International Health Policy, London School of Economics) presenting Competition issues in the distribution of pharmaceuticals English | Français | PPT
  
  
• Adrian MAJUMDAR (Partner, RBB Economics) presenting A UK retail perspective PPT
  
  
• Pradeep S MEHTA (Secretary General, CUTS) presenting Competition issues in marketing in the Indian pharmaceutical sector  PPT
  
  
• Valérie PARIS (Senior Health Policy Analyst, OECD Health Division) presenting A core set of indicators to characterise and assess the distribution chain in the pharmaceutical sector PPT
  
  
• Sabine VOGLER (Head of the Pharma Team, Austrian Health Institute and Head of the WHO Collaborating Centre) presenting Liberalization in the pharmacy sector English | Français | PPT
  

Summary documents

Executive Summary with key findings | Synthèse

Detailed summary of the discussion | Compte rendu 

Contributions from participants

Call for contributions | Appel à contributions