Novartis Halts Delivery to Second German Drug Wholesaler

Novartis AG (NOVN) has stopped deliveries to a second German wholesaler over a disagreement on prices for its medicines.

The Swiss drugmaker stopped shipping to Phoenix Pharmahandel GmbH, Germany’s largest drug wholesaler, mid-month due to a disagreement over delivery conditions, Phoenix said in a statement today. Novartis also stopped deliveries of certain medicines to GEHE Pharma Handel GmbH, another German wholesaler, as of Oct. 15, GEHE’s parent company Celesio AG said in a statement Nov. 9.

Novartis has been “optimizing” its contracts with wholesalers and adjusting “many-years-old discount rules” that were outdated and no longer in line with the market, Eric Althoff, a spokesman for the Basel-based company, said in an e-mailed statement on Nov. 9. The new contracts offer a more favorable interest rate than the current market rate, he said.

“The price conditions presented by Novartis were unreasonable in Phoenix’s view and therefore couldn’t be accepted,” Phoenix said today.

Phoenix and Celesio said they have asked Novartis to resume deliveries. Novartis is continuing contract talks with some wholesalers over an “acceptable package for both sides,” Althoff said today in an e-mail. He declined to name the wholesalers.

Phoenix distributes medicines to 10,000 pharmacies in Germany, the company said in the statement.

To contact the reporter on this story: Allison Connolly in Frankfurt at aconnolly4@bloomberg.net.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net.

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