Restrictive supply deals have made independent pharmacies disproportionately prone to dispensing at a loss, pharmacy groups have argued.

The Independent Pharmacy Federation (IPF) and Avicenna reported this month that independents were struggling to buy stock for reimbursement price due to restrictive wholesaling and direct-to-pharmacy schemes.

While some suppliers ring-fenced stock for their own branches, reduced wholesaler schemes were further controlling the market and excluding independents from loyalty discounts, they argued.

IPF chief Claire Ward said the supply chain was unfairly disadvantaging independent contractors, citing October's losses on gabapentin as an example	More on supply deals PSNC wins price concessions on gabapentin after contractor losses PSNC boss rallies pharmacists to fight exclusive distribution deals ‘No plans' for OFT to look at recent exclusivity deals
	IPF chief executive Claire Ward said the supply chain was unfairly disadvantaging independent contractors – citing October's losses on gabapentin as an example. "The people losing out are the contractors, and it's just not acceptable that they should be supplying at a loss," she told C+D. "Most of the multiples are in vertical supply chains, so they have the advantage."

Ms Ward said supply deals were worsening the situation. "Because of the increasing number of [reduced wholesaler] schemes, there's no opportunity to gain the maximum levels of loyalty bonuses because [contractors] have to spread their business across three, four or five accounts," she said.

Ms Ward backed calls from PSNC chief executive Sue Sharpe last month to raise the issue of exclusive distribution schemes with the Office of Fair Trading (OFT). The OFT originally voiced concerns over the schemes in 2007, when Pfizer pioneered the direct-to-pharmacy model and in October told C+D it had cases underway in this area, but could not comment any further.

"There are now a huge number of [reduced wholesaler schemes] and they're controlling the market and making it more difficult, particularly for independents," Ms Ward added.

Avicenna said the power of larger wholesalers was worrying. When stock was in short supply, suppliers often ring-fenced it for their own branches, Avicenna commercial director Raj Haria told C+D on Monday (November 18). This meant that independents either lost prescriptions or were forced to pay higher prices for drugs, he said, as in the case of gabapentin.

Mr Haria added that independents often incurred "hidden charges" by ordering with different wholesalers. "The other wholesaler will say you need to spend x amount of money or be part of their membership scheme," he explained.

Contractor David Sharp urged PSNC to address the growing problem of dispensing at a loss. "One item makes very little difference, but this is a move across the board of volume generics, which are bread and butter stuff," he said.

Last month, PSNC said it was working to negotiate a new price concessions system that would minimise the risk of dispensing at a loss. But it stressed that this work "took time" to complete accurately. It added that it based pricing and margins assessments on purchases made by contractors to ensure it "protected the interests of independents".

Avicenna estimated that contractors had lost up to £180 on gabapentin in October, based on an average pharmacy dispensing 10 packs of the 300mg dose at the maximum price of £24.30, C+D revealed last week.

Are you dispensing at a loss because of restrictive distribution deals? Comment below or email us at [email protected] You can also find C+D on Twitter, LinkedIn and Facebook