Transcript matching supply with demand

Large Populous Nations
 China, India, Brazil & others:
 Are now more affluent and are
making more generic drugs and
using more domestically.
 Expensive biologic drugs are so
unaffordable to their citizens
these nations have and are
replicating them causing the
patent holders to complain and
then provide significantly lower
prices to these nations.
Large Opportunity
Billions of generic, oral
solid pharmaceuticals,
cheap, costing pennies,
most made in foreign
countries, without any or
close inspection by our
FDA, must be counted
out, pill by pill from large
containers of 100 pills or
more into orange 10 cent
vials in pharmacies. Why?
Habits Die Hard
You’ve watched your entire lives, many
supposedly well educated professional
people do the same repetitive tasks,
hour after hour, day after day, year
after year their whole lives, never ever
trying to change anything, or invent
ways to improve or make it easier,
better and more profitable?
I’m speaking of Pharmacists.
A Profession locked into
Its own history
Pharmacies started as individual
pharmacists each manufacturing
single doses of medicine ordered
by individual physicians, sort of like
“short order cooks”.
Safety was not a big concern as
only one person at a time could be
killed or harmed. Until events like
the New England Compounding
Center Disaster- the last of many!
Pharmacy grows into a
wholesale business
80 years ago, pharmacists
Working with physicians, made
mostly liquid medicines with
narcotic ingredients.
Some made these better than
others so, pharmacists like: Eli
Lilly, Charles Pfizer, George
Searle, John Wyeth and others
made their drugs in large batches
and sold them locally to others.
Pharmacy wholesaler
Kills hundreds
In 1937, S.E. Massengill, Bristol, TN
added diethylene glycol [a type of
antifreeze], to make a new liquid
syrup form of a sulfer drug. They
added this for flavor, as all
manufacturers did to mask bitter
tastes, but this was poison.
105 died in 15 states and Congress
passed the Food and Drug Act in
1938 for drug Manufacturing safety,
exempting retail pharmacists
dispensing drugs as not being
manufacturing.
Drugs change form to
oral solids
After WW II drugs changed form
from liquids and powders to tablets
and capsules, mainly pain pills
and anti-biotics, whose doses
and the available amber glass
bottles caused them to be
packaged in bottles of 100.
This caused Pharmacist to have
to count out the proper number,
usually 30 to 60, as normal
doses of these drugs were 1 to 4
tablets or capsules a day.
Oral solids change dose
Drugs developed in the 70’s and 80’s
to treat many diseases, but had to
be taken multiple times a day which
was problematic.
Brand drug manufacturers changed
drugs to slow release, extending
patents, and brand drug sales into
the 90’s when generics for them
were tested and approved by the
FDA, replacing brands, molecule by
molecule and now are 90% of Global
sales, most not made in the USA.
Today’s Pharmacy
Challenges
US Pharmacies have decreased
in number since 1990. They just get
larger and increase front store
space for non-pharmaceuticals.
Today pharmacy techs count most
pills, as over 12 billion pills are
“manufactured” into 4 billion
prescriptions in 65,000 pharmacies,
mostly 30 cheap generic pills, some
uninspected by FDA in foreign plants
from bottles of 100 to 5,000 pills into
10 cent orange vials; pill by pill.
UNMET NEEDS IN
U.S. HEALTHCARE
– Physicians [too few]
– Nurses [too few]
– Tests [many missed]
– Hospitals [unbalanced]
– Emergency Care [scattered]
– Transportation [unsure]
– Pharmaceuticals [unsafe]
– Standards [unchecked]
– Rules [ignored]
– Safety [unverified]
– Vigilance [none]
UNIVERSAL U.S.
HEALTHCARE
With unmet needs in every
segment of our healthcare
system, how do we meet
needs without increased
personnel? What can be
increased quickly?
Not Physicians, Nurses,
hospitals or the rest, only
pharmaceuticals can and will
be. But supplies are being
limited and are unsafe to use
many uninspected by the FDA
made in factories in like India
and China?
WHO MAKES WHAT
AND WHERE?
It’s on the labels right?
While the FDA keeps labels on
file and these are required to be
put on bottles, and they are often
incorrect as the FDA doesn’t require
The last “manufacturer” of a drug
Products’ drug ID to be shown:
and only California requires the
LOT numbers to be placed on
prescription vials.
Consumers get more information on
underwear and fruit labels!
VISITED YOUR
PHARMACY LATELY?
If you have, you noticed for
every pharmacists, usually
on the phone, or on the
computer while 4 or 5
techs are counting pills.
These “Techs” dispense drugs to
you and others, from bottles they
have no idea who manufactured
or where, when or how the FDA
drug identification number was
applied to labels .
DOES THE FDA KNOW
THE DANGERS?
Nobody knows better, as safety has
been their only function since 1938.
August, 2006 FDA proposed safety
“Requirements For Foreign and
Domestic Establishment
Registration and Listing for Human
Drugs, Including Drugs That Are
Regulated Under Biologics License
Application and Animal Drugs;
requiring the last “manufacturer” filling
drug containers to use only their own
FDA registered NDCs on labels. It
was withdrawn as drug repackagers
complained.
WHAT IS THE FDA
DOING NOW?
As the FDA can’t keep their own
drug records and drug supplies
safe, or inspect and regulate
foreign manufacturers, their
current solution is to not
require drugs meet U.S. FDA
Standards and accept whatever
these countries’ standards are
as being “close enough” for U.S.
government needs, but every
country is different.
HOW CAN SAFETY BE
RESTORED AND HELP
PHARMACY?
Since most drugs are now made
in foreign plants, and some of
the manufacturers and countries
regulatory agencies as stringent
as we should be, establishing
contracts with the best with the
most complete product lines,
and testing before packaging
solves the safety problem, but
we would do much more.
WHAT MORE CAN BE
DONE?
Two different but essential
things are done in the
Repackaging process:
 Increased quality and
education while;
 Decreasing pharmacy
inventory and labor costs.
INCREASED QUALITY
BY EDUCATION?
Government records show
two things:
 Brand drugs changed
their products before
patent expiration to keep
high sales.
 As Brand drugs lost
patent protection 90% of
sales shifted to generics that
always drop in price.
INCREASE KNOWLEDGE
WITH EDUCATION?
As brand drugs become generic
some patients are switched
to the generic while:
 Brand drugs, increase prices
making inventory and patient
costs much more, and
 As this happens millions of
patients are switched to
generics and remain forever
on older less
effective drugs, as equally low
priced, better ones are
available.
DECREASE PHARMACY
INVENTORY AND LABOR
COSTS
 Brand drugs, especially less
popular strengths with higher
cost and slow sales of 1
bottle sold a quarter ties up
huge amounts of inventory
capital with high holding costs.
 The same happens to the
same generic strengths,
doubling the bottles on
shelves, consuming an equal
amount of space.
Change in Healthcare




Constant
Unwanted
Uncertain and
At Times:
1.
2.
3.
4.
5.
Unnecessary
Harmful
Uneconomical
Foolish
Untried, but in drugs is;
a. Very Important
b. Logical & Established
c. Extremely Necessary
d. Profitable
MATCHING DRUG SUPPLY
WITH DEMAND
 PHARMACEUTICAL DEMAND IS:
INELASTIC [DISEASE SPECIFIC]
GROWING RAPIDLY
DEVERSIFYING
CONTROLLED
MANIPULATED
COMPETITIVE
AND UNSAFE!
MATCHING DRUG SUPPLY
WITH ORGNIZATION
 PHARMACEUTICAL SUPPLY IS:
SCATTERED
DISTANT
NONSTANDARD
UNCONTROLLED
UNREGULATED
UNINSPECTED, AND
VERY UNSURE!
DRUG INELASTIC QUALITIES
PHARMACEUTICALS ARE PRODUCED BY
CLASS
MANY DRUGS, SAME PURPOSE
BRANDS AND GENERICS
SIMILAR, NOT SAME MOLCULE
OR:
PRODUCED AS SAME MOLECULE
SAME DRUG, SAME PURPOSE
BRANDS AND GENERICS
EXACT SAME MOLECULES
ALL THE ABOVE ARE
PRODUCED BY MANY FIRMS IN
MANY COUNTRIES MOST NOT U.S.
FIRMS NONE EXACTLY THE SAME
Some Main Drug Classes
 Lipid Regulators













Blood Pressure
Antidepressants
Narcotic Analgesics
Anti diabetic
Respiratory Agents
Anti-Ulcerate
Diuretics
Anti-Epileptics
Tranquilizers
Thyroid Preps
Calcium Antagonists
Anti rheumatics
Hormonal Contraceptives
MOLECULES IN ACE CLASS
BRAND (GENERIC)
RED ARE OLD
 ACE INHIBITORS B/P
Lotensin (benazepril)
Capoten (captopril)
Vasotec (enalapril)
Monopril (fosinopril)
Prinivil, Zestril (Lisinopril)
Univasc (Moexipril)
Aceon (perindopril)
Accupril (quinapril)
Altace (ramipril)
Mavik (trandolapril).
ARE BRANDS & GENERIC
MOLECULES EQUAL?
They’re supposed to be. When a
drug is patented it files a New
Drug Application [NDA] and
receives an ID number called the
National Drug Code [NDC]
After a patent expires all generic
companies must file Abbreviated
New Drug Applications [ANDA]
and submit samples to FDA for
testing to prove their products are
equal. The FDA is required to
inspect their facilities and Active
Pharmaceutical Ingredients [API]
and testing records to make sure
all generics are made to the same
NDA standards. But they aren’t
Why generics aren’t the
same.
 Only batches called lots are
exactly the same
 Every batch/lot differs slightly
with standard tolerances
normally + or - 10%
 Every Country has different
procedures, standards,
tolerances, regulatory bodies
and procedures.
 All manufacturers buy their
raw materials from different
suppliers mainly on price and
availability factors.
Growing Sales and
Constant Pharmacies
 For over 2 decades the total
amounts of prescriptions filled
have increased 4 fold, while the
number of locations filling them
has remained the same.
 Until 2000 pharmacists were
allowed only one assistant
which was increased by states
to 4 or 5. Pharmacists are
supposed to supervise, while
increased prescriptions will
probably add more techs.
Drug Sales Movement
Top 200 drugs, 80% of sales
and 20% of prescriptions
Bottom 40,000 drugs, 20% of
sales, and 80% prescriptions
70% must be repackaged
before dispensed, and are:
66% of the work
80% of inventory
25% of Profits
100% of inventory costs.
Proper Sized Inventory items
 30% of drugs are pre-sized,
sold complete and cause no
problems, like:
 Ointments, Creams, Lotions
 Suspensions
 Suppositories
 Patches
 Popular Birth-Control Pills
 A few Acute Brand Drugs
 New expensive brand drugs
All other drugs come in too
large bottles and all must be
repackaged in pharmacies.
DRUG DISPENSING BOTTLE
SIZE PROBLEMS
 MOST BRANDS GENERIC
 SLOW SELLING STRENGHTS
 SLOW SELLING GENERICS
 MULTIPLE CLASSES
 UNPOPULAR DRUGS
 DRUGS HARDLY USED
BRANDS TURNING
GENERIC

Brands come in 3 or 4 strengths,
2 or 3 not often used.

Brands price all strengths equal

All come in 100 size bottles
 Popular brand strengths sell 1
bottle/day, unpopular strengths
1 bottle every 100 days.
 As popular brands go generic,
sales fall 90% to generics, sales
go generic or to other brands.
Most brand drugs now generic
GENERIC REPLACEMENT
DRUG PROBLEMS
 HIGH VOLUME BRANDS
TURNING GENERIC ARE
PROBLEMATIC.
 SALES VOLUME DROPS
 STOCK LEFT UNSOLD
 NO DEMAND
 CAN’T RETURN
 CAN’T SELL
 UNPOPULAR STOCK DIES
LOW VOLUME BRANDS
 SMALL QUANTITIES OF
LARGE NUMBERS OF
GENERICALLY REPLACED
PRODUCTS SIT HALF
USED IN ALL PHARMACIES
AWAITING GOING OUT OF
DATE, REQUIRED TO BE
RETURNED.
 PLACE U/D HOSPTAL
STRIPS OF 10 AS
STARTER SUPPLIES.
LOW VOLUME GENERICS
 THERE ARE AS MORE
QUANTITIES OF SIMILAR,
BUT NOT EXACT, GENERIC
DRUGS WITHIN THE SAME
DRUG CLASS.
 STANDARDIZE ON BEST
DRUG IN THE CLASS OR
TWO, TO REDUCE
INVENTORY.
WHY IT WORKS

 DISPENSING SIZES ARE
EXACT AMOUNTS THE
DRUGS’ NDA WAS
APPROVED FOR.
 PHARMACISTS FIND
SMALLER, EXACTLY WHAT
THEY NEED SIZES, EARN
MORE, AND COST LESS. BUY
THEM FOR CASH, AS THEY
KNOW WHEN THEY ARE
NEEDED. PROVEN IN U.S.A.
AND IN EUROPE WHERE
CALLED PATIENT PACKS.

WHERE IT WORKS

 DISPENSING SIZES OF 28’S
ARE THE EUROPEAN SIZE
MONTHLY STANDARD, AS ALL
MONTHS HAVE 28 DAYS.
 WHOLESALERS BUY PATIENT
PACKS OF 28 IN COUNTRIES
WITH LOWER PRICES, AND
REPACKAGE THEM BY
REPLACING THE PACKAGING
OUTERWRAP AND DRUG ID’S
SAVING GOVERNMENTS
MONEY, MAKING MORE FOR
THEMSELVES.
 THIS IS PARALLEL TRADE.
COMPITITION?
 EUROPE USES 28’S AND
CAN’T USE 30’S SINCE
GOVERNMENTS WON’T
PAY FOR EXTRA 2 PILLS.
 U.S. REPACKERS
STOPPED YEARS AGO,
BUT AS CHAINS MUST
HIRE MORE TECHS AND
PHARMACISTS THEY’LL
REPACK IN 30’S BUT ONLY
HIGH VOLUME,GENERICS,
TO SAVE LABOR COSTS .
UPCOMING
PHARMACY CHANGE
 TOP DRUG PRODUCING
COUNTRIES [ASIA,
AUSTRALIA, AND SOUTH
AMERICA, WITH FAST
GROWING POPULATIONS
WILL USE AS WELL AS
PRODUCE MORE DRUGS
CREATING SHORTAGES IN
THE U.S.
DEPENDING ON NATIONS W/
UNSTABLE GOVERNMENTS
WITHOUT THE ABILITY TO
PRODUCE DRUGS IN U.S.A.
IS RISKY.
PHARMACY 2014
 BRAND MANUFACTURERS
WILL ONLY HAVE BIOLOGICAL
DRUGS TO SELL EXCLUSIVELY, IN
U.S. AT DOUBLE WORLD PRICES,
THEY CHARGE FOR ALL THEIR
DRUGS.
 BIOLOGICAL PRICES ARE SO
HIGH THE U.S. GOVERNMENT
ENTITLEMENT PROGRAMS CAN’T
AFFORD THEM AND CITIZENS
WILL TRAVEL OUT OF THE
COUNTRY TO BUY THEM AT 50%
LESS.
IF NOT DISPENSING
SIZES WHAT?
 Prescriptions are familiar to
everyone, as is the fact that they will
continue to be required to be
obtained from pharmacies with too
few pharmacists or techs, which are
the most costly form of repackaging
and can’t expand as they have run
out of time and space.
 Being focused on the Top 200
generic drugs they’ll repackage
these in dispensing sizes, ignoring
the largest portion of their business
costs – the drugs we’ll target.
HOW TO CREATE OUTLETS
AND SERVIES QUICKLY.
 TRADITIONAL PHARMACY
STARTUPS ARE NOW
IMPOSSIBLE AS DRUG
STOCK COSTS TOO MUCH.
 DISPENSING SIZES OF
BRANDS AND SLOW SELLING
GENERICS AVAILABLE
OVERNIGHT CREATES
ALMOST ZERO CASH NEED
AND DOESN’T NEED FRONT
END SALES, THAT MOST GO
TO “BIG BOX” STORES FOR.