The Implications of the Wholesale & Distribution Industry’s Evolution

The growth of the Wholesale & Distribution industry is a result of a high demand for medicines and the services that pharma suppliers and wholesalers provide.

The leading Pharma experts predict that the world pharmaceutical Wholesale & Distribution market will reach US $970 billion in 2017 and will continue to expand steadily over the next decade. Among the main reasons for such growth are ageing populations and Pharma & OTC companies’ expansion to the Emerging Markets.

Most Pharma distributers have expanded their businesses in retail through buying or building up pharmacy chains or private products. Moreover, many Pharma Wholesale players also expand in the areas of contact manufacturing and sales and marketing services, which seem to be better margin businesses.

In few cases we have observed the development of regional Wholesale & Distribution companies. For example, in the CIS region there is only one distribution player offering services to the Pharma industry for all of the region’s countries.

Today many big wholesalers and distributors are acquiring smaller suppliers in Emerging Markets in order to expand their operations. Consolidation has mostly mapped in the mature markets. The largest companies in the market are those based in big home markets like the US. However, companies focused on expansion in Emerging Markets will experience the highest rate of growth over the next decade. Those companies will accrue market shares.

The last few years have seen the large US drug wholesaling industry undergo dramatic changes. Drug distribution revenues have declined for the first time ever. Understanding the implications of the Wholesale & Distribution industry’s evolution has never been more critical.

Demand for Pharma distribution is driven by the need to treat illnesses and diseases. The profitability of individual companies is determined by the efficient distribution of a wide variety of drugs and medications. This is because the prices that can be achieved for their services are mostly similar across industry players. Large companies compete mainly on price, size of generic drug portfolio, product volume and variety and the quality of value-added support services such as supply chain management. Smaller companies can compete by focusing on rural areas, independent community pharmacies or the distribution of drugs that have special handling requirements.

CPC offers you:

  • Optimisation of revenue, margin and logistical key success factors
  • Individual financing solutions
  • Production review and development
  • Private-label business models

Our experience:

  • We have supported the Due Diligence processes of Wholesale & Distribution companies in Europe and the CIS/CEE regions.
  • We have supported market research providers in establishing sales panels for sell-out and sell-in data and key rations in logistics distribution.
  • We have developed expansion plans for both the CIS/CEE and Western European regions.