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Drugs wholesaler AAH Pharmaceuticals has said that since moving to a system of tiered customer levels, its service has not “been where it needed to be”. 

Speaking in a panel discussion at the Pharmacy Show in Birmingham yesterday (October 11), AAH customer director David McNicol said: “We have been doing a lot of change in AAH.

“Change can be quite difficult at times, and I appreciate that actually some of our service for some of our regions hasn't been where it needed to be.”

He said the relationship “between pharmacy and the wholesaler actually needs to be redefined”.

The move from a “one size fits all” model to four tiers – bronze, silver, gold and platinum – has been rolled out to all AAH customers following a trial in Bristol earlier this year.

‘Bronze’ customers are those who order up to £5,000 a month with the wholesaler, whole those in the platinum category place £25,000 worth of orders per month or more.

Customers in the higher tiers are prioritised for prompt credit resolution and query handling, and can request twice-daily deliveries, with bronze and silver customers receiving once-daily deliveries.

P3pharmacy understands a number of AAH customers have raised issues around deliveries arriving later than expected since the changes were rolled out. 

AAH chief information officer Ranjit Gill said cost and margin pressures have affected both pharmacies and pharmaceutical wholesalers, adding: “Medicines have never been cheaper. In fact, if you have a look at some of the fastest moving generics, a packet of staples can be more expensive than life-saving medicines.

“This cost pressure is continuing… and we have to do something about that.”

Mr Gill said digital tools such as cascade ordering systems “have changed the behaviour about the way that pharmacies buy products and the way that wholesalers then deliver them to pharmacies”.

He added: “We've got situations now where pharmacies are ordering products and, six, seven, eight or nine different companies could be turning up with several totes to deliver the products to a pharmacy.”

Responding to this, Cambrian Alliance CEO Nathan Wiltshire said: “I would slightly disagree with some of Ranjit's characterisation of the change in buying behaviour.

“Buying platforms in particular, and organisations like ours, are certainly more of a symptom, not a cause.

“As contractors, you can't control the percentage of clawback. You can't control the rates of reimbursement, you know, the one thing you can control is the way in which you purchase and how much purchase margin you derive.

“I don’t think there's anybody in the room that enjoys shopping around for prices and dealing with multiple wholesalers. That's more out of a necessity, than anything else.”

Avicenna managing director Brij Valla said that in some respects pharmacies and wholesalers have “a shared truth,” commenting: “At the end of the day, a wholesaler is a commercial business.

“We've seen in the past few years when a shortliner exits the market and it caused quite a bit of turmoil.

“The mainliner potentially exiting will call for a national emergency.

“The stock holding, the national capacity, the delivery levels cannot be, will never be replaced overnight – and at the end of the day, the patient will be suffering.”

“But one must not only look from the wholesaler's lens – you have to look at community pharmacies. From our perspective... there has to be loyalty [from AAH] in return as well.

“We expect you to deliver better availability, better service levels if the loyalty is there.”

Contrasting the “Mercedes Benz” service level for high-spending customers with the “Ford Mondeo service” he said may be available to Bronze customers, Mr Wiltshire said there was “frustration” and “annoyance” among contractors when the changes were introduced, adding: “The new proposition did feel a bit imposed upon the contractors – some of the communication wasn’t as great as it could have been.”

He said AAH must meet its minimum obligations to customers in each of its four tiers, adding: “Transparency, price and service needs to be the commitment, and I think time will tell whether those commitments are met.”

Mr Valla added: “I feel AAH is obviously first off the mark. I think many wholesalers will follow suit in with regards to loyalty.”