Modern concept for the sector transformation still in force as never before – with historical overview: June 2019

Valid ‘as never before ‘ in the era of digital revolution and rapidly aging and growing population needs no explanation. Needed reform did not come and will not come from the government regulators alone any time soon: all stakeholders (doctors, nurses, patients, administrators and entrepreneurs) and the market, most of all, are devising solutions to the issues and problems from the ground up.

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In the times of turbulent change following the historic events of 1989, three types of people and institutions emerged as prevailing in post-communist Bulgaria — “old communist money and power,” often legitimized through corrupt privatizations; “money and power from abroad” – not necessarily from the West. And then, there were the few self-starters, like Kamenov: European graduates and out-of-the-box thinkers, who succeeded by using their vision and skills. He has recognized and addressed the unmet needs of the changing society and Commercial League built sustainable business model.

In the austerity years of the early 1990s, many people sought better life overseas, others struggled to take control of their lives and the country’s future, took action and opened business ventures. Due to various pressures, very few of these companies have survived until today, 28 years later, and even fewer are at a size or expertise level considerable enough to rival the European giant enterprises.

This is our story, the story of how Commercial League was founded through one man’s vision and hard work and how it has evolved, with the help of many talented people, into competitive company on a world level. This is also the story of a country, its historical legacy, the health of its people and the universal struggle for better life and better health. Commercial League in particular has never privatized state-owned pharmacies, plants or a hospital. Today, Commercial League is the most significant Bulgarian-owned enterprise in healthcare – providing quality healthcare for millions on the European Balkans, first-class global deliveries and services for its partners and offering careers for thousands of talented professionals.

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Against this backdrop, the introduction of  “Care for You” medicine dispensing program and Distinguished Pharmacies’ PharmaTel service in 1998-1999 represents an advanced modernism and a key expert assistance to the healthcare reform. Care for You of Commercial League provides a mechanism to improve therapeutic results, to achieve better control of cost and is the first East European PBM (pharmacy benefit management) in a Bulgarian setting that was designed in close cooperation with Merck-Medco, NJ. Together with PharmaTel, a first of its kind in Europe home delivery service, Commercial League actually as early as the late 90s has built complex capabilities and a huge database organized to deliver cost savings, better access and quality outcomes. All focus was on the stability of drug supply and distribution channels. For a leading distributor it was critical to ensure accessibility, safety and therapeutic results, especially in times of a deep financial crisis.

Automation of inventory handling, around the clock delivery commissioning and maintaining powerful computing capacity, recruitment and retainment of talent and trivial synchronisation of a huge specialized transportation fleet and logistics were next steps of management perfection and considerable organisational innovation through adaptation of various patterns. Various digital and telehealth or telemedical solutions were introduced ever since the first specialised hospital of Bulgarian Cardiac Institute (click here)  was opened in 2007.

Financial risk management and the ability to successfully resolve various conflicts are critical to the business, especially in a country like Bulgaria, plagued by a chronic financial and structural crisis, particularly in healthcare never ending, widespread corruption and short-sighted policies.

The most common dilemma in operational management was the  maintaining of constant supply of life-saving and life-sustaining medication while still allowing the company to survive when facing a deepening, unpredictable and under-financed demand.In this environment, most Bulgarian distributors reported a loss for 2009. Commercial League, however, has reported a profit before taxes. In the vaccines field, for example, Commercial League was the unrivalled leader for many years.

The healthcare subsector of pharmaceutical wholesale and distribution has been historically misperceived in the European and even in the World public discourse. The tone for this undeserved downgrading of trade in medicines came from a number of world and local politicians grown during the times of egotism and isolation or in Eastern Europe particularly  in time of the socialist central command economy.  Commercial League has grown above this narrow-minded approach and now is a global player in the supply of branded pharmaceuticals.

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The capital-intensive and investment-dependant industry of pharmaceutical distribution has taken very large hits from real financial crises or subjectively wrong decisions in Europe and elsewhere. Theoretically, the non-cyclical business in the sector is stable in the long term, provided the players balance their desire for growth with a restraint against taking unfounded risks. Since the Bulgarian reimbursement system was introduced in 2000 until June 2009, it was the distribution companies, which negotiated with the National Health Fund on behalf of the manufacturers to ensured and guaranteed the entire pharmaceutical supply and universal access to medication through dispensing pharmacies. This scheme worked relatively well for over seven years, because it was mainly the distributors, and to a lesser extent the manufacturers, who carried the financial burden from the differed payments of the fund and ensured that all medicines were continuously in stock at the pharmacies. Distributors managed to maintain a good balance in money collection from retail pharmacies and from the health fund through a flexible system of bank credits, using the company’s own reserve capital and commercial discounts from the manufacturers. During the period from 1994 to 2007 Commercial League operated 23 regional warehouses throughout Bulgaria as well as over 50 consignment stocks in Sofia of leading world manufacturers. The accomplished record of 3500 deliveries in a 24-hour period still remains out of reach for the competitors.

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Bulgaria’s accession to the European Union on January 1st, 2007, and the tax system reform led most manufacturers to create their own distribution subsidiaries. The wholesale market fell into a depression and was widely dispersed. Pharmaceutical import was divorced from the logistical function of local distribution.

Commercial League, the largest free-of-charge creditor of state hospitals reassessed the risks in the new environment, consolidated its capital position and re-directed investments into building the Bulgarian Cardiac Institute: 9 modern specialised hospitals with 3 large centres of clinical excellence – all outside the capital city of Sofia – and 12 medical diagnostic policlinics. The endless stream of periphery and rural patients who had travelled long distance seeking specialised care discontinued. Access to lifesaving care turned into a mass privilege. The focus of our distribution organization adjusted towards providing effective medical and scientific communication and market research services in healthcare. Disregarding various abortive attempts of corrupt political groups that were changing the rules every next overnight  – all in the past by 2010 – to diverted Commercial League, we have stood the course of modernity and maintained our vast organizational expert and logistic capacity to become the first partner of choice for market penetration.

With under 4% of real GDP spending on healthcare, all to all Bulgaria is in the last – 27th – place in the European Union and remains the country with the poorest and most unhealthy population in Europe.

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Commercial League was the first Bulgarian distributor to introduce Good Distribution Practices in the country – in 1996, before the first Ordinance was passed – and this is why the company became the first Eastern European member of GIRP. We built the vital link between the manufacturers, pharmacies and patients following the principles of shared responsibility for the quality and safety of medical products and the widespread accessibility of these products.

The requirements for pharmaceutical distribution according to this standard include: registration and the tracking of each parcel and batch per individual pack; 24/7 regimen of distribution of medicines to pharmacies; ability to store and transport medicines, which require special storage and handling; maintenance of thorough information about the quality and storage requirements of the medicines; informing Drug Agency about all sales and clients; implementation of standard operating procedures; providing a system of safety to enable the recall of medicines when needed; ability to mark the medicine packages with distinguishing notes as required by the NHIF; and many others.

The speed and quality of distribution is always directly related to the accessibility and safety of the medicines, which guarantees the therapeutic results. This is why in 1998 Commercial League introduced the first fully automated commissioning of orders and organised a vast (by Bulgarian standards) fleet of over 700 delivery cars and trucks. Young specialists from almost all areas, everywhere in the country, received training in a big, very experienced and progressive organization. The resulting phrase “Commercial League University” reflects this large-scale training. At present, people recruited and trained in the company can be found in every single company in the industry of pharmaceutical distribution, marketing and promotion.

With a flawless track record of solid success, Commercial League is a major partner of Big Pharma in advanced market research and the Balkans distributor of choice for the execution of market-entry campaigns for patented products. Awareness campaigns targeting  globally medical communities and public funds are another indicator of recognized expertise. Pilot projects are massively under way.