1. EU Hospital Generic Tenders
James Burt
Vice President, Hospitals
Accord Healthcare
PDIG
10th Nov 1

2. Hospital Medicines
Hospital acquired drugs account for approximately 20-25% of global drug spend*
Typically dominated by injectable and high potency forms
Products are typically small volume, high unit value items
Often purchased via tender processes orchestrated by professional buyers
Often additional safety or usage considerations exist
Retail Channel
Hospital Channel
Injectable
Oral
Other
*IMS, all available countries, 2009 sales value 2

3. Hospital Therapeutic Classes
Generics represent approximately only 8-12% of the cost of hospital medicines*
However, IMS tends to over estimate generic prices
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
Generic
Branded
Unclassified
*IMS Value, Q4 08 Euro/MNF - 17 EU Hospital Markets, **UK data IMS 2009

4. Types of 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
Mention typical number of tenders
No tenders, physician influence high (DE private sector/BE total), range important as bundling common
Germany, Belgium, Switzerland 4

5. 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

6. 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)
Short:
France/Portugal: just assume stock available
Sweden: Halland tender 2 weeks notice given in 2011
Implications:
If tender is large, can be very difficult to pre-empt without large risk of write offs
Working capital considerations
Stocking from previous session
Long:
Denmark: Oncology tender, notification in October 2011, first supply April 2012
Netherlands: IZDN notice October, first supply February
Implications:
For major tenders essential to give sufficient time for supply chains to respond
Losing company gets enough time to utilise stock on hand

7. Number and Frequency 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 13 8
1/21 1
13+
1000+
5/8 0+
150+
150+
450+

8. 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 8

9. Stockholm tender
NB: Prices in SKR

10. Skåne Tender
NB: Prices in SKR
16-18pc, start /12-24mth 10

11. French example
NB: French Army Tender: not all French tenders the same

12. 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:
Ukraine: require 80% of shelf life remaining
Malta: 5/6ths shelf life remaining
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
Bar codes
Sweden: required soon but scored now on vial. Denmark: required from 2012
France/Serbia/Turkey/Italy/Belgium : Mass serialisation required on carton
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

13. Ideal system Medium length
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 non-price attributes
Reasonable payment terms
Set shelf life remaining not % remaining

14. 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

15. Thank you!