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The Business Of Pharma Distribution

By Expert Author: Laxmi Upasna

Today, pharma wholesale distributors are among the leading suppliers of medicines and other pharmaceutical products to various health care institutions such as hospitals, clinics, pharmacies, and other related organizations. As stated and required by ethical trade practices, these distributors must sell and distribute pharmaceutical products only to licensed product retailers and not directly to the targeted consumer, which is why generally trade their products to pharmacies, clinics, doctors, hospitals, medical suppliers and other related health care organizations. A legitimate distributor’s license is also needed for selling pharmaceutical products to ensure they are legitimate. In the same way, the majority of pharmaceutical companies in the line of distribution and wholesale assert their clients to provide the necessary permission and related certifications as proof that they are authorized to purchase pharmaceutical products on a wholesale basis. These certifications and permissions should be obtained from the appropriate government agencies and other organizations involved in regulating this industry. The majority of pharmaceuticals wholesale distributors usually supply products at the best possible date before expiry at the time of the sale of the products. Clients are required to check on their requirements carefully before they make any purchase. By and large, the quoted wholesale prices by pharmaceutical companies usually do not include charges that are associated to delivery and freight, insurance expenses and customs. Those who are from another country are expected to bear any incurred expenses from custom clearance, tax duties, and other legal requirements surrounding the transaction.

Pharma distribution is the wholesaler/middleman link in the drug distribution chain. These companies buy meds directly from the big suppliers like Pfizer (PFE) and Merck (MCK), warehouse them, and then distribute them to the tens of thousands of pharmacies throughout the country. The industry has its attractive points. First, it is largely shielded from economic cycles. Drugs are in many cases non-discretionary for those that need them, and the distributors are not subject to the price and patent risk that branded drug developers are. Also, it's a natural oligarchy. A profit margin is meager, barely above 1%, and has high barriers to entry due to the distribution networks and customer/supplier relationships required.

In 2012 India was recognized by UNICEF’s Supply Annual Report as the largest supplier of generics globally and the Government of India and Pharmexcil jointly predict that the country is now at a transformative stage in its development, having created a conducive regulatory and business environment for fostering innovation and growth. This year alone, India’s pharmaceutical exporter stand at some $14.7 billion (2012-2013), registering a growth rate of 11 per cent, with 55 per cent of exports heading to highly regulate western markets. It is in the developing economies where India is single handedly improving access to life-saving medicines. The Government has set a target of $25 billion for pharmaceutical exports by 2016. In support of these goals, the government of India has already put in place supportive initiatives with the goal of cementing the country’s position as the Pharmacy of the World. The Government of India has made tax breaks available to the pharmaceutical sector and a weighted tax deduction of 150 per cent for any R&D expenditure incurred. They have also introduced 19 dedicated Special Economic Zones to help stimulate pharma sector investment across the country. As a result of these initiatives, it is predicted that R&D expenditure will continue to grow at an annualized rate of nearly 20 per cent for the next few years.


Author Bio:


For the past 3 years I have been writing informative and high quality articles on pharmaceuticals. In the above article have covered topics such as pharma wholesale, pharma distribution, and pharmaceutical exporter.

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