This decision follows recent and proposed distribution changes by leading UK medicine suppliers. Until recently all medicines were distributed through a number of competing wholesalers but in March 2007 Pfizer Limited began selling prescription drugs solely through one wholesaler, Unichem. Other suppliers are also considering introducing significant changes to their own distribution arrangements.

The study will consider the likely impact of such changes on competition, the NHS and patients and will report back by the end of the year.

The decision to undertake a market study reflects the importance of ensuring that the distribution of medicines involving pharmacists, hospitals and dispensing doctors, is timely, efficiently delivered and cost effective for patients. The NHS spends more than £10 billion per year on the purchase of prescription medicines. UK pharmacies currently provide more than 800 million prescriptions per year. At the end of the market study, the OFT will have a better understanding of the impact of the changes that are taking place and whether further action is required, such as a market inquiry by the Competition Commission and possible mandatory remedies.