Friday, April 20, 2007

AstraZeneca UK follow Pfizer (with a twist)

AstraZeneca has moved to gain more control over its supply chain and appointed the UK's two biggest drug wholesalers to deliver its medicines directly to pharmacies, dispensing doctors and hospitals.

It has awarded contracts to Celesio AG's British distribution unit AAH Pharmaceuticals and Alliance Boots PLC's wholesale unit UniChem.

Alliance Boots today recommended a 10.6 bln stg takeover offer from Kohlberg Kravis Roberts and its deputy chairman Stefano Pessina.

The move by AstraZeneca follows a similar arrangement initiated by Pfizer last year, which appointed UniChem as a sole distributor. That caused an outcry from both rival wholesalers and pharmacists, who claimed the deal would crimp competition and disrupt the country's delivery system.

The complaints prompted the Office of Fair Trading to launch an investigation into the distribution of medicines across the country, which will report its findings by the end of the year.
The appointment of two distributors by AstraZeneca, as opposed to Pfizer's exclusive deal, is likely to be seen as an attempt to assuage competition concerns.

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