Ensuring a Reliable Supply with Pharmaceuticals

Austrian Association of Full-Line Pharmaceutical Wholesalers

PRESS TALK

Ensuring a reliable supply with pharmaceuticals

June 2, 2014

Palais Hansen Kempinski Vienna - Schottenring 24, 1010 Vienna

Press talk: Ensuring a reliable supply with pharmaceuticals

June 2, 2014, Palais Hansen Kempinski Vienna

PRESS TEXT

Ensuring a reliable supply with pharmaceuticals

PHAGO pharmaceuticals wholesalers call for the establishment of a transparency database as well as the creation of emergency stockpiles

Vienna, June 2, 2014. - During the European Annual General Meeting of Pharmaceutical Wholesalers in Vienna, PHAGO, the Austrian special interest group of full-line pharmaceutical wholesalers (formerly ARGE Pharmazeutika), issued an invitation to a press talk.

It is the mission of pharmaceutical wholesalers to ensure Austria's nation-wide supply with pharmaceuticals. As far as guaranteeing the secure supply of pharmaceutical products is concerned, the pharmaceutical wholesale trade has been facing some daunting challenges recently. There have been repeated difficulties in supplying drugs, some of them critical. There are various reasons for these shortages including the geographical concentration of pharmaceutical plants, increased quality standards for raw materials production as well as miscalculations in production planning. Another reason is the fact that already one quarter of all pharmaceuticals earmarked for the Austrian market is being warehoused by their manufacturers abroad.

Anywhere in Austria within 2 hours

Andreas Windischbauer, president of PHAGO and CEO of Herba Chemosan AG, is sceptical about this trend: "We share some of the responsibility for guaranteeing that patients are provided with the medication they require around the clock. Let me illustrate the importance of this capability using the following example: a pharmacy urgently needs a controlled substance to be used as pain medication for a cancer patient. The head of the dispatch department manages to supply the drug within 2 hours. One patient in Strass (Styria) accidentally drank a detergent from an unlabelled bottle, burning his oesophagus. We were able to help this patient thanks to the express delivery of a certain drug from Vienna directly to Strass."

Pharmaceuticals wholesale facilities have a staff of 2,000 employees in total, handling about 15,000 phone calls with their Call Centre. 50,000 products from over 2,000 suppliers are stored at these locations. Every month, we deliver more than 20 million packs of pharmaceuticals to pharmacies all over Austria.

The statutory and regulatory requirements for the wholesale trade have increased, particularly in recent years. Delivery vehicles had to be re-equipped in line with new special regulations which have also necessitated the modification of existing storage facilities. According to the PHAGO interest group that will incidentally celebrate its 60th anniversary this year, up to EUR 7 million in total have been invested into ensuring a reliable pharmaceuticals supply over the past 4 years.

President Windischbauer: "We are capable of delivering any drug required to any location in Austria within 2 hours. And that's what we mean by ensuring a reliable supply."

PHAGO calls for the creation of emergency stockpiles

PHAGO proposes the creation of national emergency stockpiles to better compensate current drug delivery problems. Mr. Heinz Krammer, General Secretary of PHAGO and member of the National Commission for the Evaluation of Medical Substances at the Federation of Austrian Social Insurance Institutions, explains: "A national emergency stockpile of vital medical substances should be created that we can fall back on in times of supply shortages. We have the required experience and know how to establish emergency stockpiles and, what's most important, how to maintain them without sustaining financial losses due to product expiry. To implement such a preventive measure, however, we also need the support of the public authorities."

Transparency database to help alleviate supply shortage situations

The PHAGO pharmaceutical wholesalers have another groundbreaking proposal: the creation of a so-called transparency database. What's the idea behind this database? Heinz Krammer: "The basic principle is that a pharmaceutical company affected by short- or long-term supply problems would directly enter into the transparency database the time when the drug in question will be available again as well as the reason for the shortage concerned. Using this information, a pharmacists and the prescribing doctor could then look for an alternative drug together whenever such a shortage occurs. It would be ideal for us if the transparency database could be launched in fall, thus making a significant contribution to ensuring a reliable supply."

Pharmacist Alice Wittig thinks that such a system would be a great help for pharmacists. "During supply shortages, we are often unable to tell patients when the drugs they need will become available again - tomorrow, the day after tomorrow, in six weeks? In many cases, we can offer alternatives such as preparing the medication required in our pharmacy ourselves. Regrettably, this isn't always possible. My wish for the future would be that we will become able to check when certain drugs will become available again", the pharmacist from Heidenreichstein (Lower Austria) describes the present situation in pharmacies all over the country.

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PHAGO (formerly ARGE Pharmazeutika) is the voluntary-membership special interest group of the Austrian full-line pharmaceutical wholesale trade. PHAGO firmly advocates the principles of full supply coverage as well as of sufficient supply capacities and supply readiness. 'Full supply coverage' is defined as stockpiling a sufficient quantity of pharmaceuticals to meet the demand generated by pharmacies all over the country. Based on these principles, the pharmaceutical wholesale trade also ensures a continuous supply with pharmaceutical as well as a consistent nation-wide inventory irrespective of regional and seasonal demand.

Download all press documents under www.phago.at/presse

Contact for further queries:

Britta Blumencron Gesundheitskommunikation

Mag. Britta Blumencron

Tel. 0043 69910112223

E-Mail:

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Press talk: Ensuring a reliable supply with pharmaceuticals

June 2, 2014, Palais Hansen Kempinski Vienna

FACT SHEET

Founded: 1955

President: Dr. Andreas Windischbauer

General Secretary: Prof. Mag. Heinz Krammer

Address: PHAGO – Austrian Association of Full-Line Pharmaceutical Wholesalers

1090 Vienna, Palais Schlick – Türkenstrasse 25/16

www.phago.at

Members (in alphabetical order):

· Herba Chemosan Apotheker AG, Vienna

· Jacoby GM Pharma GmbH, Hallein

· L. Kögl Pharma, Innsbruck

· Kwizda Pharmahandel GmbH, Vienna

· Pharmosan Handelsgesellschaft mbH, Vienna

· Phoenix Arzneiwarengroßhandlung GmbH, Vienna

· Richter Pharma AG, Wels

We are members of GIRP (Groupement International de la Repartition Pharmaceutique), the European umbrella organization of pharmaceutical full-line wholesalers.

Facts & Numbers:

· 2,000 employees working at wholesale facilities

· Delivery to any place in Austria within 2 hours or even faster in case of emergencies

· Every Austrian pharmacy is supplied three times daily

· Delivery of more than 20 million packs of pharmaceuticals per month

· Zum Lagerbestand unserer Mitglieder zählen über 50.000 Artikel von mehr als 2.000 LieferantenTotal inventory maintained by PHAGO members: more than 50,000 products from over 2,000 suppliers

· Over 6 million warehouse accesses by PHAGO members per month

· About 15,000 phone calls are accepted by the Call Centre every day. About two thirds of all orders are handled by our automatic ordering system

More information and image material:

www.phago.at/presse

Page 2/14

Press talk: Ensuring a reliable supply with pharmaceuticals

June 2, 2014, Palais Hansen Kempinski Vienna

STATEMENTS

Statement by Dr. Windischbauer

At the same time we are holding our press talk, the European Annual General Meeting of Pharmaceutical Wholesalers is taking place here in Vienna, with scheduled appearances by Tonio Borg, the European Commissioner for Health and Consumer Policy, and of Alois Stöger, the Austrian Minister of Health.

This two-day event will bring together European and Austrian top representatives from the area of healthcare.

The general public, however, is not very aware of the fact that the wholesale trade plays a central part within the drug supply channel.

Who are we and what do we do?

Distribution of pharmaceuticals without the wholesale trade (slide 1)

Wholesalers have an efficient pooling and focussing function: the factors of time and the environment are crucial (slide 2)

How a drug reaches a patient (slide 3)

· 2,000 employees working at wholesale facilities

· More than 50,000 products from over 2,000 suppliers

· About 15,000 phone calls are accepted by the Call Centre every day. About two thirds of all orders are handled by our automatic ordering system

· Delivery of more than 20 million packs of pharmaceuticals per month

We share some of the responsibility for guaranteeing that patients are provided with the medication they require around the clock. That's what we call supply quality in red-white-red!

Our working group has existed for 60 years. On the occasion of this anniversary, we would like to move with the times as far as our internet presence is concerned as well.

Let us introduce you to PHAGO:

· Name:
PHAGO (formerly ARGE Pharmazeutika) is the voluntary-membership special interest group of the Austrian pharmaceutical wholesale trade.

PHAGO firmly advocates the principles of full supply coverage as well as of sufficient supply capacities and supply readiness. 'Full supply coverage' is defined as stockpiling a sufficient quantity of pharmaceuticals to meet the demand generated by pharmacies all over the country. Based on these principles, we also ensure a consistent nation-wide inventory irrespective of regional and seasonal demand.

· The new logo and the new website www.phago.at

As far as guaranteeing the secure supply of pharmaceutical products is concerned, we have been facing some daunting challenges recently. Currently, there have been repeated difficulties in supplying drugs, some of them critical. There are various reasons for these shortages including the geographical concentration of pharmaceutical plants, increased quality standards for raw materials production as well as miscalculations in production planning. Another reason is the fact that already one quarter of all pharmaceuticals earmarked for the Austrian market is being warehoused by their manufacturers abroad.

We are sceptical about this trend because we are charged with maintaining a national pharmaceutical stockpile and thus with ensuring a secure supply.

I would like to illustrate the importance of this capability for patients using three specific examples:

· Urgent delivery of a controlled substance on a Sunday.

A pharmacy urgently needed a controlled substance to be used as pain medication for a cancer patient. The head of the dispatch department managed to supply the drug within 2 hours.

· One patient in Strass (Styria) accidentally drank a detergent from an unlabelled bottle, burning his oesophagus. We were able to help this patient thanks to the express delivery of a certain drug from Vienna directly to Strass.

· In August 2002, a record flood raged in the Province of Salzburg. Inhabitants of the towns of Bad Ischl and Bad Aussee found themselves cut off from the outside world by the flooding. Within hours, the pharmaceutical wholesale trade had succeeded in hiring a helicopter to supply the 6 stricken pharmacies with urgently needed drugs.

Austria's topography presents a special challenge to our work when compared to other countries; nevertheless, we are capable of delivering any drug required to any location in Austria within 2 hours or even faster in case of emergencies.

And that's what we mean by ensuring a reliable supply.

Statement by Prof. Krammer

The special interest group of the Austrian pharmaceutical wholesale trade is celebrating its 60th anniversary this year.

I have been involved in PHAGO for over 30 years and would like to take a look both into the past and into the future with you.

This working group was founded 60 years ago with the stated aim of improving the management of supply shortages caused by the turmoils of post-war conditions in Austria. The challenges the wholesale trade is facing have changed dramatically since that time.

The statutory and regulatory requirements for the wholesale trade have increased sharply, particularly in recent years. To name just one example, warehousing including light protection and temperatures is carried out and checked strictly in conformity with statutory provisions as well as on the basis of the so-called Good Distribution Guidelines. These requirements and measures are particularly stringent when it comes to flammable substances, cooled goods, bases, acids and controlled substances. The vehicles we use to deliver pharmaceuticals had to be re-equipped in line with these new special regulations which have also necessitated the modification of existing storage facilities. According to our estimates, we have invested up to 7 million Euros into this area alone over the past 4 years to ensure a reliable pharmaceuticals supply.

Large investments once again lie ahead for us in the near future when we will be required to implement the European Directive regarding the prevention of the entry into the legal supply chain of falsified medicinal products.

According to our calculations, we will have to set aside a seven-digit Euro amount to this end.

At the moment, however, what's most important that we succeed in guaranteeing a secure supply with pharmaceuticals. We will only be able to overcome current delivery problems if all actors within the healthcare system cooperate in a transparent manner.

Therefore, we propose the creation of nation-wide emergency stockpiles for vital drugs that we can fall back on in times of supply shortages. Such a model had existed in Salzburg for antidiabetics until recently. This showcase project, however, was cancelled in the wake of Salzburg budget cuts. We have the required experience and know how to establish emergency stockpiles and, what's most important, how to maintain them without sustaining financial losses due to product expiry. To implement such a preventive measure, however, we also need the support of the public authorities.

Our contribution towards more transparency

Together with the Austrian Association of Pharmaceutical Industries, our members have been working on a so-called transparency database in the last few months. The basic idea is that a pharmaceutical company affected by short- or long-term supply problems would directly enter into the transparency database the time when the drug in question will be available again as well as the reason for the shortage concerned. Using this information, a pharmacists and the prescribing doctor could then look for an alternative drug together whenever such a shortage occurs.