James Dudley Management

James Dudley Management

Brexit decision could have profound implications for OTC medicines distribution in Europe

The decision of the British people to leave the European Union in a referendum last month could have a profound effect on the approval and distribution of medicines in the UK, as well as on the business strategies of Europe’s major medicines distribution companies, according to a leading expert.

"Since around 1994, the European self-care market has evolved into an international market characterised by cross-border brands and international companies. This applies right along the supply chain from manufacturer to consumer,” says James Dudley, author of the 2016 20-country study ‘OTC Distribution in Europe’.

“However,” he adds, “the European self-care business has developed on the basis of a single market based on a single set of rules.”

Market statistics found in the 20-country report on OTC Distribution in Europe show that overall the UK counts for about 12% of the overall retail pharmacy market in the 20 countries studied and comes fourth in size behind Germany, France and Italy.

Figure 1: United Kingdom Share of Europe’s Retail Pharmacy Market (20-country study)

United Kingdom Share of Europe’s Retail Pharmacy Market (20-country study)

Source: James Dudley Management ‘OTC Distribution in Europe – 2016 edition’

The United Kingdom represents about 12% of total retail pharmaceutical turnover in the 20 countries studied and comes in fourth in size behind Germany and France – so it is not an insignificant market. Thus from the viewpoint of pharmaceutical suppliers, whether of OTC self-care or prescription-only medicines, Britain should retain an active role in the European Medicines Agency (EMA), as this approves drugs on behalf of all member states. The alternative would mean that companies would always have to file for approval in the United Kingdom as well as in the rest of the European Union, potentially doubling its regulatory efforts and costs for a market of a little over 60 million people, compared to a single market of nearly 500 million.

On average, the turnover of the European retail pharmacy market is split between prescription dispensing 73%, OTC self-medication and self-care 11% and other pharmacy health and beauty ranges 16%, according to the James Dudley Management report.

Non-prescription medicines provide the core of the European self-care business. The United Kingdom represents 15% of the non-prescription pharmaceutical market and is third in size behind France and Germany. However, in terms of OTC medicines, the United Kingdom is the second-largest behind Germany as many non-prescription medicines are dispensed and reimbursed in France.

Figure 2: United Kingdom Share of Europe’s Retail Non-prescription Medicines Market (20-country study)

United Kingdom Share of Europe’s Retail Non-prescription Medicines Market (20-country study)

Source: James Dudley Management ‘OTC Distribution in Europe – 2016 edition’

Pharmaceutical intermediary distribution is largely an international business in Europe. Europe’s three major pharmaceutical distributors – Phoenix, Walgreens Boots Alliance (WBA) and Celesio (part of McKesson) – share over 40% of the intermediary pharmacy market in the 20 countries in the James Dudley Management market report. However, these three international companies are also significant players in the retail pharmacy sector in Europe.

Celesio, WBA and Phoenix are the main players in the development of private retail pharmacy chains in Europe. The three companies between them control over a third of pharmacies in wholly-owned retail chains, a third of independent pharmacies affiliated to groups and 17% of pharmacies overall in the 20 countries under study.

The United Kingdom provides a big slice of the European business portfolios for each of these major pharmaceutical distributors. The United Kingdom represents an estimated 88% of WBA’s European retail pharmacy turnover through its Boots brand and nearly a third of its European wholesale business, according to the James Dudley Management OTC Distribution in Europe market report. Similarly, 68% of Celesio’s European turnover through its Lloydspharmacy chain, and just under fifth of the company’s European wholesale pharmacy business, is dependent on the UK market.

While the UK pharmacy market is important to the German pharmaceutical distributor Phoenix, it only accounts for 30% of its retail business and 8% of its wholesale turnover.

Figure 3: Importance of the UK Pharmacy Market to Europe’s Largest Pharmaceutical Distributors

Main Group UK as % of Group’s total European Retail Pharmacy turnover UK as % of Group’s total European Wholesale turnover
WBA 88 31
Celesio (McKesson) 68 19
Phoenix 30 8

Source: James Dudley Management ‘OTC Distribution in Europe – 2016 edition’

Information for Editors

Contact James Dudley author of the Report – Informationa@james-dudley.co.uk

Graphs and figures - May be reproduced as long as they are acknowledged

OTC Distribution in Europe – the 2016 edition - the New Global Agenda is a long running in-depth multi-country study that explores and tracks change. It identifies the driving factors coming into play which will influence the distribution channel environment for the consumer healthcare industry now and in the future. It provides knowledge, comprehensive statistics and analysis covering 20 European countries, together with insights into an increasingly complex market sector from a highly respected strategy consultant, James W Dudley.

The 2016 edition of OTC Distribution in Europe is the tenth edition of a project which first began 25 years ago.

The report explores the distribution channels for consumer healthcare in : Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom

Publication Date December 2015

Mechanics

OTC distribution in Europe - 20 country consultancy report - with over 590 pages and over 300 graphs, tables & figures

More information and Table of Contents can be found at www.james-dudley.co.uk

Brexit-Entscheidung mag tiefgehende Auswirkungen für OTC-Arzneimittel Vertrieb in Europa auslösen

Le Brexit pourrait comporter des implications profondes pour la distribution des médicaments OTC en Europe

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