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U.K. Watchdog to Probe Pfizer, Boots Medicines Deal

Britain's consumer affairs watchdog said on Wednesday it would investigate the U.K. market for distributing medicines after drugs giant Pfizer struck a deal to sell its products through a single wholesaler.

Until recently all medicines were distributed in Britain through competing wholesalers, but Pfizer radically changed that model last month when it began selling prescription drugs solely through UniChem.

UniChem is the wholesaling division of Alliance Boots, which is currently facing a 10 billion pound ($19.8 billion) bid from private equity firm Kohlberg Kravis Roberts & Co. and its own deputy chairman Stefano Pessina.

Other drug manufacturers are also considering introducing significant changes to their own distribution arrangements following Pfizer's move.

"The study will consider the likely impact of such changes on competition, the NHS (National Health Service) and patients and will report back by the end of the year," the Office of Fair Trading (OFT) said.

The NHS spends more than 10 billion pounds a year on prescription medicines and British pharmacies dispense more than 800 million prescriptions annually.

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