Changes In World Pharma Distribution

Around the world, the traditional boundaries of the pharmaceutical distribution system are breaking down, with a new supply chain evolving against a background of increasing government cost-cutting, and new strategies being adopted by all players in the market, says a new report from IMS company Pharma Strategy group. The main drivers of these changes are government health care reforms and international legislation.

Looking at the European Union, Scandinavian, North American and Japanese markets, the study says drugmakers are taking steps to increase their control of the supply chain, to cut distribution costs. The strategies being used to do this include the move in the USA to form alliances with pharmaceutical benefit management companies, while European manufacturers are acquiring wholesalers, setting up single-company agency agreements, and forming manufacturer groups.

Wholesalers, for their part, are seeking to increase market share through overseas consolidation; the most notable example so far is Gehe of Germany's acquisition of wholesaler OCP, which accounts for around 42% of the French market. Larger wholesalers are becoming more involved in retailing, manufacturing and the distribution of generics, while smaller firms are focusing more on niche markets.