and Specialty Distributors
by Adam J. Fein, Ph.D.
(126 page downloadable PDF file; Released September 2011)
 Corporate License
$980 (Allows for use of the report by an unlimited number of employees within the same organization or enterprise worldwide. View License Terms.) Single-User License
$340 (Allows for use of the report by one individual person. View License Terms.) Payment can be made with all major credit cards (Visa, MasterCard, American Express, and Discover) or via PayPal. License terms, purchaser's name/email, and a unique transaction ID will be added to the secure PDF file upon checkout. Please contact us if you would like to upgrade from the Single-User License to a Corporate License. All sales are final after download. The $300 billion U.S. drug wholesaling industry is evolving faster than ever. The biggest wholesalers are positioning themselves as indispensable intermediaries in the supply chain and staking out a powerful position in high-growth channels for specialty drugs. Understanding the implications of this industry’s evolution has never been more crucial. The 2011–12 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors gives you a comprehensive overview and analysis of this important sector. This new report was researched and written by Adam. J. Fein, Ph.D., one of the world’s leading experts on the industry and author of the influential Drug Channels website. Dr. Fein has synthesized a wealth of statistical data (including 55 data-packed exhibits), research studies, and his own unique business consulting experience into a definitive, nonpartisan state-of-the-art resource. This year’s report—49 pages longer than the 2010-11 report—includes expanded coverage of the specialty market, a new chapter on wholesaler profitability, and more detailed company analysis of the Big Three public wholesalers—AmerisourceBergen, McKesson, and Cardinal Health. The 2011–12 Economic Report on Pharmaceutical Wholesalers is an invaluable planning tool for pharmaceutical manufacturers, wholesalers, pharmacy buyers, benefit managers, managed care executives, healthcare policy analysts, investors—anyone who wants to understand and benefit from the forces reshaping the highly competitive U.S. drug wholesaling industry. The report will:
No other report on the market today offers the depth, insight and analysis of The 2011-12 Economic Report on Pharmaceutical Wholesalers. Please note that purchase of the 2011-12 Economic Report on Pharmaceutical Wholesalers indicates agreement with the terms and conditions of the End User License Agreement (EULA). License terms, purchaser's name/email, and a unique transaction ID will be added to the secure PDF file upon checkout. You must purchase the Corporate License if you want to share the report with other people in your company. Upon request, we will refund duplicate purchases of a Corporate License from the same organization. |
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Report Summary and Key Definitions
Chapter 1: Industry Overview
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Products Sold by Wholesalers
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Full-line Wholesalers
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Specialty Distributors
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Revenue Trends
Chapter 2: Channel Role for Traditional Drugs
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Retail Pharmacies
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Wholesaler Services for Independent Pharmacies
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Wholesalers’ Role in the Pharmacy-PBM Relationship
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Wholesaler Relationships With Pharmacy Buying Groups
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Wholesaler Generic Programs for Retail Pharmacies
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Self-Warehousing Chains and Mail-Order Pharmacies
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The Importance of Warehouse Deliveries to Wholesaler Revenues
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Why Large Customers Buy Brand-Name Drugs from Wholesalers
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Healthcare Providers and Other Non-Retail Customers
Chapter 3: Channel Role for Specialty Drugs
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Channels to the Patient for Specialty Drugs
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Physician Offices/Clinics
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Retail and Specialty Pharmacies
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Home Care Providers
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Hospital Pharmacies
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Insurance Coverage and Payment Methods for Specialty Drugs
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Payment Methodologies
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Prevalence of Limited Distribution Arrangements
Chapter 4: Wholesaler Profitability
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Gross Margins
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Components of Buy-Side Gross Margin
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Buy-Side Margin from Fee-for-Service Agreements
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Buy-Side Margin from Prompt Payment Discounts
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Buy-Side Margin from Generic Manufacturers
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Gross Profits of Brand vs. Generic Drugs
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Lifecycle Profits for Traditional Generic Drugs
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Lifecycle Profits for Specialty Generic Drugs
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Operating Profit
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Operating Profit as a Percentage of Gross Profit
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EBIT Margins from Warehouse Deliveries
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Return on Invested Capital
Chapter 5: Forces of Change for Wholesalers and Distributors
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Pharmaceutical Market Growth
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The Outlook for U.S. Pharmaceutical Spending
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Shift to Specialty
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Pharmacy Industry Consolidation
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Recent Growth Trends
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Risk That Large Customers Will Bypass Wholesalers
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The Outlook for Independent Drugstores
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Recent Growth Trends
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The Specialty Pharmacy Opportunity
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The Generic Wave
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Wholesaler Profits from the Generic Wave
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Risks for Wholesalers from the Generic Wave
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The Battle for Control of Specialty Drugs
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Challenges to Buy-and-Bill
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The Growing Role of Specialty Pharmacy Fulfillment to Healthcare Providers
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The Outlook for White Bagging
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Chapter 6: Wholesaler Profiles
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AmerisourceBergen Corporation
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Company History
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Business Mix and Profitability
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Top Customers
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Relationship with Medco Health Solutions
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Specialty Group Trends
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ABDC Growth Trends
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Cardinal Health
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Company History
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Business Mix and Profitability
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Top Customers
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Growth Trends with Large Customers
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Growth Trends with Smaller Customers
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Position in Specialty Business
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Expansion Into China
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McKesson Corporation
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Company History
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Business Mix and Profitability
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Top Customers
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Growth in Specialty Business
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Growth Trends with Smaller Customers
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Appendix: Inventory Management Agreements and Fee-For-Service Agreements
Endnotes
Exhibit 1: Drug Wholesaler Sales by Type of Customer, 2009
Exhibit 2: Drug Distribution and Related Revenues at Big Three Wholesalers, 2010
Exhibit 3: Specialty Distributors Sales by Type of Customer, 2010
Exhibit 4: Share of Specialty Distribution Revenues by Company, 2011E
Exhibit 5: Revenue Growth, Big Three Wholesalers vs. Manufacturers, 2006-2010
Exhibit 6: Drug Wholesale Sales vs. Retail Drugstore Sales, 1999-2011:Q1
Exhibit 7: Market Share with Independent Pharmacies, by Wholesaler, 2011
Exhibit 8: Pharmacy Franchise and Marketing Programs of Large Drug Wholesalers
Exhibit 9: Largest Pharmacy Services Administration Organizations
Exhibit 10: Pharmacy Buying Groups and Wholesaler Relationship
Exhibit 11: Largest U.S. Pharmacies and Primary Wholesale Supplier
Exhibit 12: Share of Drug Distribution Revenues From Warehouse Deliveries, 2005 vs. 2010
Exhibit 13: Top Health System GPOs, by Purchasing Volume, 2010
Exhibit 14: Overview of Specialty Products Distribution Channels to the Patient
Exhibit 15: Community Oncology GPOs and Wholesaler Ownership
Exhibit 16: Benefit Coverage of Specialty Drugs, 2011
Exhibit 17: Medical Benefit vs. Pharmacy Benefit Spending on Specialty Drugs
Exhibit 18: Estimated Buy-Side and Sell-Side Contributions to Gross Margin, 2011
Exhibit 19: Illustrative Wholesaler Cash Conversion Cycle for Brand-Name Drugs
Exhibit 20: Big Three Wholesalers, Cash Conversion Cycle
Exhibit 21: Big Three Wholesalers, Revenues and Gross Profits, Brand vs. Generic Drugs, 2010
Exhibit 22: Wholesaler and Provider Profits From a Specialty Generic Injectable Drug
Exhibit 23: Big Three Wholesalers, EBIT as a Percentage of Revenues, 2008 to 2011
Exhibit 24: Big Three Wholesalers, EBIT as a Percentage of Gross Profits, 2008 to 2011
Exhibit 25: AmerisourceBergen, Profitability Metrics, FY-2009 vs. FY-2010
Exhibit 26: Cardinal Health, Segment Profit for Bulk vs. Non-Bulk Revenues, 2007-2011
Exhibit 27: Big Three Wholesalers, Return on Invested Capital, 2007 to 2011
Exhibit 28: Days of Sales in Inventory for Big Three Wholesalers, 2002 vs. 2011
Exhibit 29: Growth in National Health and Prescription Drug Expenditures, 2010-2020
Exhibit 30: Prescriptions by Pharmacy Format, 2009 vs. 2010
Exhibit 31: Number of Independent Pharmacies, 1990-2010
Exhibit 32: Public Payer Share of Selected Specialty Drugs in Retail Pharmacies, 2010
Exhibit 33: Projected Brand Revenues Lost Due to Generic Launches, 2011-2021
Exhibit 34: Big Three Wholesalers, EBIT as a Percentage of Revenues, 2010 vs. 2014E
Exhibit 35: Buy-and-Bill vs. Specialty Pharmacy at Oncology Practices, 2011
Exhibit 36: Health Plan Strategies for Managing Across Pharmacy and Medical Benefits
Exhibit 37: AmerisourceBergen, Estimated Revenues and EBIT by Segment, FY 2011
Exhibit 38: AmerisourceBergen, Revenues by Business Segment, 2004-2011
Exhibit 39: AmerisourceBergen, Profitability Metrics, 2008-2011
Exhibit 40: AmerisourceBergen, Top Ten Pharmaceutical Distribution Customers, 2011
Exhibit 41: Amgen, Gross Products Sales to Big Three Wholesalers, 2007-2011
Exhibit 42: AmerisourceBergen, ABDC, Revenues and Growth, 2008-2011:Q2
Exhibit 43: Cardinal Health, Estimated Revenues and EBIT by Segment, FY 2011
Exhibit 44: Cardinal Health, Profitability Metrics, 2008-2011
Exhibit 45: Cardinal Health, Top Ten Pharmaceutical Distribution Customers, 2011
Exhibit 46: Cardinal Health, Bulk Revenues and Growth, 2008-2011:Q2
Exhibit 47: Cardinal Health, Revenues from CVS Caremark and Walgreen, 2008-2011
Exhibit 48: Cardinal Health, Non-Bulk Revenues and Growth, 2008-2011:Q2
Exhibit 49: McKesson, Estimated Revenues and EBIT by Segment, FY 2011
Exhibit 50: McKesson, Distribution Solutions, Profitability Metrics, 2008-2011
Exhibit 51: McKesson, Top Ten Pharmaceutical Distribution Customers, 2011
Exhibit 52: McKesson, Warehouse Deliveries, Revenues and Growth, 2008-2011:Q2
Exhibit 53: McKesson, Direct Distribution, Revenues and Growth, 2008-2011:Q2
Exhibit 54: McKesson, Drug Distribution Revenues by Customer Type, 2004 vs. 2011
Exhibit 55: McKesson, OneStop Generic Program, Revenue Growth Rate, 2004-2011
