A pharmaceutical wholesaler buys products directly from pharmaceutical companies in bulk. There are two types of wholesalers. Specialized companies buy specialty pharmaceuticals from their manufacturers, while wholesalers buy complete product lines from manufacturers. Wholesalers are the second link in the pharmaceutical supply chain.
They buy pharmaceutical products from manufacturers to distribute them to different locations such as pharmacies, hospitals, clinics, doctor’s offices and laboratories. Some retailers sell a variety of products, including medicines and medical devices, while others specialize in product types sold or types of customers that are sold to. Pharmacies typically buy prescription drugs from wholesalers at a contracted discount from WAC. The rate varies depending on the size and purchasing power of the pharmacy.
Pharmacies contract with wholesalers to stock their prescription drug facilities and use agreements that allow full and timely payment to purchase medicines and fulfill other obligations at a discount. In many LMICs, the market for pharmaceutical wholesalers and distributors is extremely fragmented, with too many intermediaries and small, inefficient companies. China and Tanzania provide two examples of reforms. As part of the Prime Vendor program, a district selects a wholesaler that delivers drugs that are either not in stock or are only slightly in stock with the government-run central supply authority (Medical Stores Department) directly to counties.
Wholesalers have security for this in the form of chargebacks. If the manufacturer and pharmacies reach a price agreement without entering the wholesaler, the wholesaler can charge the manufacturer for lost profits from the business. If there was a way to ensure the quality and system maturity of private wholesalers and conclude framework price contracts, programs such as the Jazia system in Tanzania could become a strong complementary source of supply for healthcare facilities if the government-run medical care agency was not in the is able to deliver inventories. Pharmaceutical distribution around the world is organized a little differently, but in all OECD countries, private wholesalers and distributors often deliver (daily or sometimes twice a day) to deliver medicines and health products to hospitals, clinics, and retail pharmacies. The combination of barcodes and other IT tools to check incoming and flowing goods will further improve the effectiveness of supply programs for wholesalers.
There are many examples of how governments are revising their drug supply systems through collaboration with private actors, but these are two vivid ways to solve the excessive fragmentation of the wholesale market. Due to the wholesaler’s uniqueness in the drug supply chain, regulations are incredibly strict when it comes to how the drugs are received, stored, handled, and sold. The role of the wholesaler in life sciences supply chain management is to make the purchase of pharmaceuticals from pharmaceutical manufacturers more efficient. Without a license, a pharmaceutical wholesaler can be linked to serious crimes, including counterfeit prescriptions and unauthorized drug distribution.
Hopefully, the above arguments show that working with private wholesalers and retailers is an area that deserves far more attention than what it has received in the past when designing global healthcare supply chains. While some may argue that wholesale suppliers are no longer needed, wholesale pharmaceutical products provide customers and customers with savings. Whether you’re an independent pharmacy or part of a pharmacy chain, wholesale pharmacy is a sensible way to increase sales and save money.
This blog does not provide medical advice. It is intended for informational purposes only. Do not use it as a substitute for professional medical advice, diagnosis, treatment or disease prevention. Always seek the advice of your physician or another qualified healthcare provider for any questions you have regarding a medical condition.
The views and opinions expressed on this blog are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of Gabriel Nieves, LAC Healthcare Solutions, LAC.us Staff, and/or any/all contributors to this blog/site