What Does a Pharmaceutical Distributor Do?

Pharmaceutical distributors are the middlemen who purchase and take legal possession of pharmaceuticals from manufacturers and ship them to pharmacies and other suppliers. They don't manufacture, prescribe, or promote drugs, nor do they make clinical decisions about who should or should not receive a medication or what medication is best for a particular patient. Distributors are responsible for managing both inventory and credit risk, allowing manufacturers to focus on their core competencies in pharmaceutical drug development and manufacturing. Wholesale distributors are the second link in the drug supply chain.

They purchase pharmaceuticals from manufacturers for distribution to a variety of different locations, such as pharmacies, hospitals, clinics, doctors' offices, and laboratories. Some distributors sell a variety of products, including medicines and medical equipment, while others specialize in types of products sold or types of customers sold to. Getting a drug starts with a prescription, and distributors help ensure that what your healthcare provider prescribes reaches your hospital, pharmacy, or other healthcare facility safely and reliably. More than 22,000 independent pharmacies rely on their services on a daily basis, according to Healthcare Distribution Alliance (HDA).

Consolidation has been vital to drug prices, as larger distributors profit from low-cost products spread across large sections of the population. Due to the unique nature of the wholesale distributor in the drug supply chain, regulations are incredibly strict when it comes to how medicines are received, stored, handled and sold. While considerable effort and expense has been invested to innovate, develop and market medicines more efficiently, only minimal effort has been made to reconfigure manufacturing and distribution operations or adjust the pharmaceutical supply chain network. Distributors handle 92% of pharmaceutical sales in the United States and deliver more than four billion prescription drugs safely and quickly.

While wholesale distributors are the largest purchasers of manufacturers, in some cases, drug manufacturers also distribute products directly to government buyers, including the AIDS Drug Assistance Program (ADAP), the Veterans Administration, and the Vaccines for Children program (VFC). Pharmaceutical distributors play an important role in the supply chain by purchasing medical products from pharmaceutical manufacturers for storage in distribution centers and warehouses across the country. Prices are largely determined by the market, and it's not uncommon for manufacturers, distributors, and pharmacies to talk to each other to determine how much to pay for how much product. Federal law requires rigorous and consistent rules for state licensing of Pharmaceutical Distributors in order to prevent any potential issues. As connectors of creators and caregivers, distributors enable seamless and cost-effective delivery of pharmaceuticals.

Distributors and pharmacists with shared interests will find mutual benefits by working together to create optimal patient outcomes, great customer experiences, and a healthy end result for the pharmacy. The Pharma Letter provides subscribers with daily, up-to-date news, business intelligence, commentary and analysis for the pharmaceutical, biotech and generic sectors of the healthcare industry. This is backed by a team of respected writers with many years of experience in the field.

Rachel Celli
Rachel Celli

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