DHL's CEO takes on Mark Hooper in debate

He says exclusive supply is more efficient than wholesaler delivery
debate two sides battle

DHL CEO Saul Resnick has come out strongly in support of exclusive supply as an efficient alternative to CSO wholesalers.

Facing up to CSO wholesaler protagonist Mark Hooper during a panel discussion, he said his company offered pharmacies almost 100% delivery accuracy and denied that DHL introduced a single point of failure into the supply chain, according to a report in Pharma in Focus.

Mr Hooper, chairman of the National Pharmaceutical Services Association (NPSA), said removing high-cost medicines from the wholesale supply chain put the whole system at risk.

“The great thing about the current system is there is inbuilt redundancy,” he said.

Mr Resnick said: “Circa 70% of the product that gets delivered to wholesalers is currently coming from DHL, so if there’s a single point of failure it’s already there.

“The single source of supply in this context actually improves the likelihood of product getting safely to where it needs to go.”

DHL had exclusively supplied a “ballpark” 170 million units direct to pharmacies over the past seven years, Mr Resnick said.

Instead of medicines going to around 40 distribution centres, they travelled from a DHL store to 5500 pharmacies with “99.6% delivery accuracy”.

These medicines were worth between $120 and 130 million to the CSO, meaning wholesalers were paid for medicines DHL had delivered.

Mr Resnick also argued that manufacturers should not be expected to use suppliers of generics to deliver their own products or “subsidise delivery of a bottle of water into pharmacy”.

Both he and Mr Hooper believed the Federal Government was close to a decision on exclusive supply of PBS medicines, which wholesalers say should never be delivered through a single distributor.

Mr Resnick believed it would breach competition laws if there were an attempt to restrict competition from exclusive supply, but said he was open to new ways of working with the government.

“We will do what our customers want us to do where it makes economic sense to do so.”