API slashes pharmacy deals
January 19, 2011
AUSTRALIAN Pharmaceutical
Industries yesterday confirmed
changes to its trading terms, with
the “overall discount pool available
to pharmacies being reduced by
25% effective 1 February 2011”.
Speaking at the firm’s annual
general meeting, chairman Peter
Robinson said the year had “not
started the way we would have
liked,” with impacts to the business
from the Queensland floods.
As well as this, the government’s
PBS reforms, the Fifth Community
Pharmacy Agreement and Pfizer’s
decision to eliminate wholesaler
distribution (PD 06 Dec) have
affected API, with Robinson adding
that “we are reviewing our overall
cost base to further reduce the
impact of these industry charges”.
API ceo Stephen Roche told
shareholders that the company’s
Brisbane Distribution Centre
experienced 2m of floodwaters,
with reconstruction set to take at
least six months.
The floods are a blow to API’s
Revitalise supply chain program,
with projected synergies unable to
be achieved this year, Roche said.
He said that API’s strategy to
develop its Priceline retail presence
had given the company broader
flexibility to grow, with total
Priceline sales up 4.7% for the four
months before Christmas.
Roche also cited API’s “advanced
plans to further exploit the potential
of our Priceline brand, its Clubcard
customer loyalty program and
deepen ourbond with Australia’s
female shoppers through a causerelated
program that will
strengthen their attachment to the
Priceline brand in a highly
meaningful and lasting way”.
He said that during the year the
Soul Pattinson and Pharmacist
Advice brands had seen significant
growth, along with the API
Premium Member Program.
Roche said that the 25%
reduction in trading terms for
pharmacists was “the first of a
number of potential adjustments
through to 2015, as we manage
the impact of PBS Reforms and
maintain shareholder value”.
He said the government had
ignored pleas to increase the CSO
funding levels for wholesalers, and
warned that this could
“fundamentally undermine the
entire wholesaling industry and with
it the principle of equity of access to
medicine for all Australians”.
The above article was sent to subscribers in Pharmacy Daily's issue from 19 Jan 11To see the full newsletter, see the embedded issue below or CLICK HERE to download Pharmacy Daily from 19 Jan 11
