EU Hospital Generic Tenders
James Burt
Vice President, Hospitals
Accord Healthcare
PDIG
10th Nov
Hospital Medicines
Hospital acquired drugs
account for approximately 2025% of global drug spend*
Typically dominated by
injectable and high potency
forms
Retail Channel
Products are typically small
volume, high unit value items
Hospital Channel
Often purchased via tender
processes orchestrated by
professional buyers
Often additional safety or
usage considerations exist
Injectable
*IMS, all available countries, 2009 sales value
Oral
Other
Hospital Therapeutic Classes
Generics represent
approximately only 8-12% of
the cost of hospital medicines*
However, IMS tends to over
estimate generic prices
Generic
The hospital generics value
pool is dominated by oncology
and systemic anti-infectives**
UK hospital market 2009 IMS =
€5.27B
Generic ~ 15%
UK tends to have lower brand
prices and IMS tends to over
estimate generic prices
*IMS Value, Q4 08 Euro/MNF - 17 EU Hospital Markets, **UK data IMS 2009
Branded
Unclassified
Hospital
Markets
few annual/bi-annual tenders,
compliant/inflexible,
transparent, efficient distribution
Nordics, UK, Netherlands,
many tenders (>150), reasonable
compliance, transparency poor, influencers
unclear,
pricing/ reimbursement complex, changing
rules
France, Italy, Poland
hybrid regional tenders, hospital contracts
and ‘spot’ business
Spain, Austria, Ireland, Portugal
No tenders, physician influence high (DE
private sector/BE total), range important as
bundling common
Germany, Belgium, Switzerland
Tender
Longevity:
Supply periods vary by country from 2 weeks  4 years
most common 12 months,
calendar year cycle typical: i.e.
summer submission autumn adjudication winter start
Short tenders:
emergency tenders in UK/Netherlands/
Denmark, cover patent expiry until
regular cycle
Retail tenders in Nordics, 3mths 2
weeks
Implications:
Supply chain difficulty (OOS
common),
user/patient confusion,
increased work load for
adjudicators (suit commodity
products),
lower price pressure
Long tenders:
Spain: typically 3 years,
UK/Netherlands: often 2 years,
France: military 4 years
Implications:
helpful to supply chain,
higher price pressure,
difficult to estimate future COG
movement
Notice period:
Notice period varies from 1 day  6 months (i.e. adjudication to 1st supply)
most common 1-2 months,
Manufacturing lead times can be up to 6 months (API order  delivery of final
released product)
Long:
Short:
France/Portugal: just assume stock
available
Denmark: Oncology tender, notification in
October 2011, first supply April 2012
Sweden: Halland tender 2 weeks notice
given in 2011
Netherlands: IZDN notice October, first
supply February
Implications:
Implications:
If tender is large, can be very
difficult to pre-empt without large
risk of write offs
For major tenders essential to give
sufficient time for supply chains to
respond
Working capital considerations
Losing company gets enough time
to utilise stock on hand
Stocking from previous session
Number and
Frequency
13
8
1/21
1
5/8 13+ 0+
150+
150+
450+
1000+
Low number of tenders:
Denmark: single national
tender (Kiwi like). 2+ supplier
also ‘awarded’
No alternative product
available if outage
High number of tenders
Poland: up to 200 per month
High workload
Other systems:
Portugal: listing, not award
Multiple awards, lack of
clarity on demand
Non price
criteria:
Many tenders now require additional information as part of the assessment
In some markets these are weighted to build a final value (not cost) based
assessment
Contamination
Denmark: 25% of assessment weight
Presentation Range
UK: common to exclude if not all
available
Sweden: reduced range = reduced
score
Stability data
UK/Italy/Austria/Germany/Ireland:
require some additional post
reconstitution/ dilution data
Denmark: Amgros initiated a
consultation in Oct. Sweden: in scoring
Supply performance
UK/Sweden can be an exclusion criteria
Formulation
UK/Portugal/Netherlands: dual/triple
awards
Sweden: reduced score for powder vs
solution
Environmental
Sweden: exclusion assessments made
on environmental impact
statements/reduction programs
Romania: recently required
demonstration of ISO140001/18001
program
Artwork
Denmark: Safe artwork design now
makes up 15% of the assessment
UK: can be an exclusion criteria
NB: Prices in SKR
Stockholm tender
MODIFICATION
PHARMACEUTICAL
ADEQUACY
COMPANY NAME
MAX
COMP 1
COMP 2
COMP 3
COMP 4
COMP 5
FULFILS ALL TENDER DEMANDS
YES
YES
YES
YES
YES
TOTAL PRICE OFFER
785,984
1,142,674
1,198,200
1,399,000
1,016,269
PRACTICAL HANDLING
20
15
15
10
10
15
MIX-UP RISK
15
15
15
15
6
15
CONTAMINATION RISK
10
8
10
8
8
8
INFORMATION
5
0
4
3
3
4
ENVIRONMENTAL
5
TOTAL
5
43
0
44
5
41
5
32
5
47
% NOT ACHIEVED
11.4%
10.5%
13.3%
21.9%
7.6%
22.8%
21%
26.6%
43.8%
15.2%
NEW PRICE
965,637
1,382,091
1,517,720
2,011,895
1,171,129
RANKING
1
3
4
5
2
WEIGHT FACTOR
2x
NB: Prices in SKR
PRACTICAL HANDLING
MIX-UP RISK
Skåne Tender
COMPANY NAME
Fludarabine,
Vincristine,
Vinorelbine,
Doxorubicin
Cisplatin
Methotrexate,
Cytarabine, 5FU,
Paclitaxel,
Epirubicin,
Carboplatin,
Topotecan
Gemcitabine, lipodoxorubicin,
oxaliplatin,
Irinotecan
Stability Data
3,000
4,800
12,500
Compatability Data
3,000
4,880
12,500
Range
3,000
4,880
12,500
Special Equipment
3,000
4,880
12,500
Inspection
3,000
4,880
12,500
Missing Bar code OR VNR
3,500
8,000
25,000
Missing Barcode AND VNR
7,500
16,500
49,500
Clear readable label
7,500
16,500
49,500
Sheathing
4,500
7,300
30,000
Powder vs Solution
4,500
7,300
30,000
Security information
2,000
5,400
15,000
Extravasation information
2,000
5,400
15,000
Emetogenicity information
2,000
5,400
15,000
Patient information
2,000
5,400
15,000
Environmental information
2,000
5,400
15,000
PVC present
1,000
11,000
21,000
TOTAL
50,000
110,000
330,000
CONTAMINATION RISK
INFORMATION
ENVIRONMENTAL
French example
COMPANY NAME
COMP 1
COMP 2
COMP 3
COMP 4
COMP 5
COMP 6
COMP 7
COMP 8
PRESENTATION 1
€10.00
€8.80
€10.90
€13.00
€9.00
€12.00
€12.00
€13.40
PRESENTATION 2
€32.00
€44.00
€39.90
€40.00
€30.00
€38.00
€60.00
€45.00
PRICE RANKING: 45% OF TOTAL
2
5
4
6
1
3
8
7
PHARMACEUTICAL BROCHURE
VERY GOOD
GOOD
STABILITY DATA, OFFICIALLY
ACCEPTABLE
24H OFFICIAL
28 D UNOFFICIAL
35 D
OFFICIALLY
PACKAGING
VERY GOOD
GOOD
VIAL AND FLIP OFF TOP
VERY BAD
EXCELLENT
STRENGTH AND FORMS
VERY GOOD
35 D OFFICIAL
EXCELLENT
GOOD
POOR
TECHNICAL RANKING: 55% OF TOTAL
5
CALCULATED SCORE
FINAL RANKING
EXCELLENT
SOLUTION
SOON
+2G
PORTFOLIO
EXCELLENT
GOOD
MEDIUM
2
5
3
8
6
1
4
3.65
3.35
4.55
4.35
4.85
4.65
4.15
5.35
2
1
5
4
7
6
3
8
NB: French Army Tender: not all French tenders the same
POOR
Other tender
features:
There are a broad range of other tender features that procurement systems
set differently
Often the unintended consequences are not understood
Minimum Shelf life:
Bar codes
Ukraine: require 80% of shelf life
remaining
Sweden: required soon but scored now
on vial. Denmark: required from 2012
Malta: 5/6ths shelf life remaining
France/Serbia/Turkey/Italy/Belgium :
Mass serialisation required on carton
France: >3months remaining is OK
Samples:
Spain/Malta: require local finished stock
UK: flexible, will take other country
stock, or nude vials + artwork
Payment terms
Italy: average >6months,
Spain: regional but worst region
>600days!
Germany: <30 days
Supply times
West EU: mostly individual hospital
orders on a monthly cycle
Bulgaria/Cyprus/Lithuania/Malta: often
supply is in quarterly or half year drops
CSR
UK: green supply chain initiatives
Ideal system
UK Report card
Medium length
Regional, not national or individual hospital
Multiple suppliers, not monopoly award
Consistent volumes i.e. not price listing
Samples from other countries or electronic
versions acceptable
Notice period in keeping with lead times
Consistent and transparent weighting on nonprice attributes
Reasonable payment terms
Set shelf life remaining not % remaining
Cautionary
tale
Procurement predominantly
through group purchase
organisations (GPOs)
Bundling often evident with
loss leading on some
common products
Product often unique to
market
Stock dumping common
shortly after multi-market
supply starts
Limited number of ‘deep
pocket’ players remain
High volume + limited
number of remaining players
= high likelihood of shortages
Thank you!