HDA members handled 95.7% of US pharmaceutical distribution in 2016

HDA 2017-8 Factbook details rising wholesaler involvement

The annual Factbook from the Healthcare Distribution Alliance is a wealth of information about trade channels and wholesaler practices in the US, which in turn influences the pharma industry’s ability to manage the movement of its products to healthcare providers and patients. This year’s edition (available at no cost from the HDA Research Foundation, the research arm of the organization) records that in 2016, HDA members HDA membership is restricted to full-line distributors, meaning that these distributors only deal directly with manufacturers and offer essentially any branded or generic product.

The Factbook also notes that there were 35 HDA members in 2017 (up by one from the previous year; however, with the recent acquisition of H. D. Smith by AmerisourceBergen, that count is going to drop back to 34). They operate 211 distribution centers, up from 203 in 2016. Some overall performance numbers: total SKUs handled in 2016 averaged 54,692 (up from 2015’s 52,066); overall, HDA members handled 95.7% of drug distribution, up from 2015’s 93.8%. There were signs in 2016 of the worsening financial situation by major wholesalers seen in 2017; gross profit margin declined from 3.0% in 2015 to 2.5%.

One of the most dynamic parts of the drug wholesaling business these days is preparing for compliance with the Drug Supply Chain Security Act (DSCSA)—the Factbook shows that IT investment by wholesalers is now 56% of total capital expenditures (up from 20% in the previous years). And wholesalers that perform repackaging need to install the same serialization barcoding equipment that manufacturers do, adding to the expense.

The 2017 edition is produced with support from silver sponsors Apotex Corp. and Hospital Pharmaceutical Consulting; and bronze sponsors Amneal Pharmaceuticals; Pharmacy First; Smith Drug Company, Div. J M Smith Corporation; and Teva Pharmaceuticals USA.