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E-Folder - Will Retail Chains Lose Their Dominance?
In most industrialised nations the the supply chain of goods from source to
end user has changed little for many years. Firstly there are the producers. Then the wholesaler, then the retailer and then the customer and consumer.
In the U.S. the supply chain has always been pulled by downstream consumers. Europe had a different history where a mixture of world wars and interventionist governments led
In the U.S. the supply chain has always been pulled by downstream consumers. Europe had a different history where a mixture of world wars and interventionist governments led
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
to supply chains that were pushed from the upstream end.
Certainly, the rationing of the 1940's and beyond led to a culture of consumers
who got what they were given and were thankful for small mercies.
As Europe has become more affluent, consumers have flexed their muscles and demanded an ever wider array of goods at a range of prices and standards. It has now joined the U.S. and most other indus
As Europe has become more affluent, consumers have flexed their muscles and demanded an ever wider array of goods at a range of prices and standards. It has now joined the U.S. and most other indus
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
rialised nations with consumer-led
supply chains.
A feature of this has been the trend towards large retail chains. Many of these chains have become so large that they have virtually dispensed with wholesalers, preferring instead to purchase goods directly from producers. They have also established the so called "own brand". This is where they have dictated the product specification to the produce
A feature of this has been the trend towards large retail chains. Many of these chains have become so large that they have virtually dispensed with wholesalers, preferring instead to purchase goods directly from producers. They have also established the so called "own brand". This is where they have dictated the product specification to the produce
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
and told them to brand
it as their own product. And there is more: some of the largest chains have
increasingly got themselves involved with all aspects of the supply chain from
raw material sourcing, packaging procurement and design, all aspects of
distribution and even their suppliers' recruitment policies.
This has resulted in a shift in the balance of power from upstream to downstream. Now th
This has resulted in a shift in the balance of power from upstream to downstream. Now th
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
t every aspect of the producer's business, including their
all important costs, have been tied down by the ever inquisitive retail chain,
has the pendulum swung as far as it could? We all know what happens to pendulums
when they have gone as far as they can in one direction. Now, I cannot surely be
the only person who has thought about this. I am sure that directors of some of
the large producers o
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
ut there must have thought to themselves "how did we
let this happen?". Perhaps some of the smaller producers whose management
can't even visit the washroom without permission from the retailer (it seems)
are also thinking "enough is enough".
Just think of this: who has put the capital and risk into the very expensive plant that is needed in a production environment? Not the retailers. Who has the
Just think of this: who has put the capital and risk into the very expensive plant that is needed in a production environment? Not the retailers. Who has the
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
skilled staff including engineers and designers? Certainly not the retailers.
Who has detailed product knowledge within their own spheres? Retail chains, by
their very nature specialise in putting largely unskilled staff in large
buildings with rows of shelving and a line of checkouts. They can only ever have
a superficial knowledge stretching accross the vast product ranges they sell.
I know I hav
I know I hav
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
painted a picture of poor downtrodden producers that have been
conquered by those nasty retailers. Firstly the retailers are not nasty at all -
they are just doing their job - so let's not blame them. And there will be many
producers out there who rather like the status quo and don't want to rock the
boat. OK, so they don't get the kinds of profit margins they would like, but
they do get vo
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ume. Though in my opinion, the reason why many producers
want to leave things as they are is that they are slaves, even if they don't
realise it.
It's a kind of drug dependancy, but with the drug being high volume sales and the drug pusher being the retail chain. It's a familiar pattern. The producer is forced to reduce costs by a retailer promising higher volume in return for a greater share of t
It's a kind of drug dependancy, but with the drug being high volume sales and the drug pusher being the retail chain. It's a familiar pattern. The producer is forced to reduce costs by a retailer promising higher volume in return for a greater share of t
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
he margin, so the producer invests in larger production
facilities, faster machinery and takes on more staff. This is fine until the
producer realises that he is now dependent on the retailer. The producer
is now in the position where he must be given volume orders in order to
ammortise his costs. The retailer says: I can give you volume, but you must give
us more margin. For some pro
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ucers the moment of truth comes when they need to
take a leap into a big new production facility in order to keep up with these
demands. So, they take on a loan and expand the business. Now they need a
constant fix of volume business, not only to keep the factory going, but in
order for their business to avoid bankruptcy. Some producers who have converted
to this high volume business have gone so f
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
r with it, and have partnered so
closely with their master retailer that they simply see themselves as an
extension to the retailer and will not contemplate change.
Others may feel differently. They may be run by more indpendently-minded bosses, or may have kept up sales to other outlets in order to keep some trade going that is outside the sphere of the retail chain. I am sure that some producers
Others may feel differently. They may be run by more indpendently-minded bosses, or may have kept up sales to other outlets in order to keep some trade going that is outside the sphere of the retail chain. I am sure that some producers
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
want to see that pendulum start to make its way back, even if it is
just a little way. But what can they do? Well, things are changing out there, so
opportunities may arise sooner than expected.
Firstly, there is safety in numbers. Just ask the unions, or a herd of wilderbeest. I can see alliances taking shape over the next few years between non-competing producers who, between them, can offer a fu
Firstly, there is safety in numbers. Just ask the unions, or a herd of wilderbeest. I can see alliances taking shape over the next few years between non-competing producers who, between them, can offer a fu
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
ll range of products to
consumers. Why can't they open their own retail outlets? Remember, the billions
made by today's retail chains will no longer need to be serviced, so prices will
be very competitive and margin healthy.
Secondly, there is pressure on fuel supply and prices. There has been a recent blip that might fall off again, but most experts agree that the long term trend is that prices w
Secondly, there is pressure on fuel supply and prices. There has been a recent blip that might fall off again, but most experts agree that the long term trend is that prices w
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ll rise. As fuel costs begin to impact margins and even
product prices there will be pressure to retail goods as close to their source
as possible. It may even make sense to sell goods directly from a producer's own
shop. In the UK, local farmer's markets have taken a significant slice of
business away from supermarkets. I am suggesting here that this principle could
be extended to more loca
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
selling opportunities from producers and not
just farmers.
Thirdly, there is an increasing trend - mainly driven by legislation - to re-use parts in products that are at the end of their life and to re-use packaging. This reverse distribution will benefit once again from having producers as close to consumers as possible and it may benefit further by cutting out the retailer altogether for the re
Thirdly, there is an increasing trend - mainly driven by legislation - to re-use parts in products that are at the end of their life and to re-use packaging. This reverse distribution will benefit once again from having producers as close to consumers as possible and it may benefit further by cutting out the retailer altogether for the re
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
urn of goods.
Finally of course, there is the internet - shopping on line. Not a cashier or a shopping trolley in sight. Yes, distribution infrastructure is still required, but remember that many bricks and mortar retailers have still not fully got to grips with the structures that are required to distribute internet sales. The internet gives producers a wonderful opportunity to change the order of
Finally of course, there is the internet - shopping on line. Not a cashier or a shopping trolley in sight. Yes, distribution infrastructure is still required, but remember that many bricks and mortar retailers have still not fully got to grips with the structures that are required to distribute internet sales. The internet gives producers a wonderful opportunity to change the order of
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
things
to their advantage and sell directly to end users.
What many large retail chains have done has been breathtaking and can only be admired. They took control of their supply chains and used their new influence and power to their advantage and therefore to the advantage of their shareholders. Just remember though, that retail chains consist of unremarkable buildings, staffed with unskilled la
What many large retail chains have done has been breathtaking and can only be admired. They took control of their supply chains and used their new influence and power to their advantage and therefore to the advantage of their shareholders. Just remember though, that retail chains consist of unremarkable buildings, staffed with unskilled la
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
our and with low-tech plant. They do not
produce goods (usually) and they do not own any brands apart from their own.
Their main asset is customer goodwill with the large throughputs of customers
visiting their sites. If this throughput is threatened by high fuel prices or
because of alternative attractions, then these large buildings will become white
elephants. If this ever happens, the decline c
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
uld be swift and decisive, for
those retailers are just as addicted to their customers as producers are to
them.
There is a lot to be said for buying your products as closely as possible to their source. Arkay Hygiene sells fly killers. Yes they are stocked by retailers, but Arkay Hygiene sells most of them directly from their web site at www.eeeee.co.uk. Perhaps they are already ahead of the game
There is a lot to be said for buying your products as closely as possible to their source. Arkay Hygiene sells fly killers. Yes they are stocked by retailers, but Arkay Hygiene sells most of them directly from their web site at www.eeeee.co.uk. Perhaps they are already ahead of the game
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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