The Office of Fair Trading (OFT) is launching a study into how medicines are distributed in the UK after receiving 500 complaints about an exclusive deal struck between Pfizer, the drugs group, and Alliance Boots, a takeover target.

The study, which the OFT hopes to complete by the end of the year, hinges on a deal where Pfizer decided to bypass its traditional wholesale suppliers, who sell on medicines to pharmacists. Instead, Pfizer now sells direct to pharmacists and uses Alliance Boots' distribution business to deliver the goods.

The OFT decided to launch the investigation after a large number of complaints from pharmacists, doctors and members of the British Association of Pharmaceutical Wholesalers (BAPW), as well as indications that a number of other drug groups, including AstraZeneca, were contemplating changing their own supplier agreements.

GlaxoSmithKline already sells direct to pharmacists, but uses a number of wholesalers to deliver its medicines. There are 11 "full line" wholesalers in the UK, i.e. companies which sell all prescription medicines, in a market which generated £10.5 billion in sales during 2006.

A spokesman at the BAPW said that it was compelled to act after Pfizer announced the deal with Alliance Boots last September, based on concerns that it would impact competition as well as affect the robustness of the drug supply chain if, for example, there was a pandemic that required a large, speedy distribution of medicines.

He also said that the BAPW is concerned about the long-term effect of a change in the supply chain on the NHS, which buys 80 per cent of all prescription drugs in the UK. The BAPW spokesman said that while other pharmaceutical groups are contemplating changing their distribution agreements, they are waiting to see the results of the OFT study before making a move.

Alliance Boots is the subject of a bid by its deputy chairman, Stefano Pessina, and KKR, the private equity group. The company's distribution business was formerly known as Alliance Unichem, which merged with Boots last year, and Mr Pessina has been a chief architect in the growth of the division.

It is not clear if the OFT investigation will impact a Alliance Boots takeover by Mr Pessina and KKR or other interested party, reported to include Germany's Celesio which trades under the Lloyd's brand in the UK. Celesio is believed to have hired NM Rothschild, the investment bank, as it mulls making a bid for Alliance Boots.

A spokeswoman at the OFT said that the timing of the study was "coincidental". Shares in Alliance Boots fell by 2p to £10.24 in early trading, below the £10.40 per share price that Mr Pessina and KKR have indicated they will pay for the company.

The parties are examining Alliance Boots' books after the group last week agreed to allow Mr Pessina and KKR to start due diligence.

In a trading statement released last month, Alliance Boots described the implementation of the deal with Pfizer as "well planned and executed", adding: "We are aware that other manufacturers are also contemplating whether to change their existing arrangements."

In response to today's announcement by the OFT, Pfizer said: "We understand the Office of Fair Trading (OFT) is to conduct a general market study into the distribution of medicines in the UK, with which we will cooperate fully.

"Pfizer is pleased to note that the OFT has not launched a formal investigation into Pfizer's medicine supply and distribution arrangement at this time and we will continue to sell our medicines directly to pharmacy customers using UniChem as our logistics service provider."

As well as producing Viagra, the male anti-impotency drug, Pfizer makes the world's best selling medicine Lipitor, a cholesterol-reducing drug, which last year generated $12.9 billion (£6.5 billion) in global sales.

Pfizer supplies 11 per cent of medicines in the UK and changed the way it distributes drugs last month in order to gain control of its supply chain.

A spokeswoman for the company said that the decision to change its distribution channel was not based on cost and that the company was actually incurring expenses on the switchover.

However, a spokesman at the BAPW said: "Pfizer might be spending more but we do not care about that. It is about the effect on the pharmacists, the NHS and the taxpayer."

Pfizer said that it had uncovered three instances of counterfeit versions of Lipitor entering the supply chain and by selling direct to pharmacists it is able to monitor its drugs more closely.

Previously, pharmacists were granted discounts on medicines from wholesalers, but Pfizer now decides on the discounts that sellers receive after consulting with the Department of Health and The Pharmaceutical Services Negotiating Committee, which represents pharmacists who sell to the NHS.

In February, the OFT announced the results of a study into the purchasing system the NHS uses to buy drugs. The study uncovered that the NHS, which spends £8 billion a year on brand prescription drugs, is paying pharmaceutical companies as much as 10 times too much for some medicines.

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