Drug and Druggists' Sundries Wholesalers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,000 drug and druggists’ sundries wholesalers in the US distribute biological and medical products; botanical drugs and herbs; pharmaceutical products; and related goods. Prescription drugs account for over 80% of industry sales. Other product categories include cosmetics and beauty supplies; vitamins and nutritional supplements; non-prescription drugs; and personal care items.
Regulated Environment
The distribution, compounding, purchase, and storage of pharmaceuticals is highly regulated by the Drug Enforcement Administration (DEA), FDA, and US Department of Health and Human Services (HHS).
Reimbursement Rates and Coverage
The drug wholesale industry is affected by changes to medical reimbursement rates, which continue to fall as the healthcare industry looks for ways to cut costs.
Industry size & Structure
The average drug wholesaler operates out of a single location, employs 32-33 workers, and generates about $109 million annually.
- The drug and druggists' sundries wholesale industry consists of about 7,000 firms that employ about 231,000 workers and generate $770 billion annually.
- The industry is concentrated; the top 50 companies account for 86% of industry revenue.
- Large companies include McKesson, Amerisource Bergen, Cardinal Health, and JM Smith. Large firms may have international or pharmacy retail operations.
Industry Forecast
Drug and Druggists' Sundries Wholesalers Industry Growth
Recent Developments
Mar 2, 2023 - Distributors Win Trial Over Individual Opioid Abuse Claims
- Pharmaceutical wholesalers aren't responsible for harm to individuals whose family members abused narcotics, a Georgia jury decided in early March. The lawsuit was the first one brought by individual victims of the opioid epidemic against pharmaceutical industry companies to come to trial. The plaintiffs had filed suit under a rarely used state law that permits relatives of people addicted to drugs to sue drug dealers. The suit was filed against two of the country’s largest medical distributors, McKesson and Cardinal Health, and a third regional firm. The Georgia law, called the Drug Dealer Liability Act, requires plaintiffs to prove that the distributors violated state and federal laws regulating controlled substances. They also must show that an “individual drug abuser” in a family had filled opioid prescriptions at pharmacies to which the distributors shipped, and that the relatives were harmed by the person who used those drugs.
- The US Food and Drug Administration (FDA) will allow retail pharmacies to offer abortion pills in the US for the first time. Pharmacies can apply for certification to distribute the abortion pill mifepristone, and if certified, they will be able to dispense it directly to patients upon receiving a prescription from a certified prescriber. The change includes permanently removing restrictions on mail order shipping of the pills and their prescription through telehealth.
- Three major drug wholesalers have banned drugs such as Adderall and Xanax from certain US pharmacies in response to the opioid crisis. AmerisourceBergen Corporation, Cardinal Health, and McKesson Corporation said that they imposed the bans because pharmacists had filled prescriptions written by doctors who frequently prescribed psychiatric drugs. Adderall and Xanax are psychiatric drugs, not opioids, but they are regulated by the federal government because they can be addictive. They are used to treat conditions like attention deficit hyperactivity disorder and anxiety.
- A federal judge ruled in favor of three major US drug distributors in a lawsuit accusing them of causing a health crisis by distributing 81 million pills over eight years in one West Virginia county ravaged by opioid addiction. The plaintiffs had argued that AmerisourceBergen, Cardinal Health, and McKesson should be held responsible for sending a "tsunami" of prescription pain pills into the community and that the defendants' conduct was unreasonable, reckless, and disregarded the public's health and safety in an area ravaged by opioid addiction. The companies blamed an increase in prescriptions written by doctors along with poor communication and pill quotas set by federal agents. "Plaintiffs failed to show that the volume of prescription opioids distributed in Cabell/Huntington was because of unreasonable conduct on the part of defendants," US District Judge David Faber wrote.
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