1. Executive Summary
1.1 Aims of this Report
1.2 Brief Overview of the Chapters in This Report
2. Introduction to The Pharmaceutical Wholesale and Distribution Sector
2.1 An Overview
2.2 The Drug Wholesaler - More Than Just a Middleman
2.3 Roles and Functions of the W&D Companies
2.4 Types of Wholesaler
2.4.1 Full-Line Wholesalers
2.4.2 Short-Line Wholesalers
2.4.3 Secondary Wholesalers
2.4.4 Vertical Integration
2.5 The World Market Estimate and Forecast
3. Key Concepts in Pharmaceutical Wholesale and Distribution
3.1 Pharmaceutical Wholesale is Different from Other Forms of Wholesale
3.2 Business Models
3.2.1 Gross Profit
3.2.2 Forward Buying
3.2.3 Fees-for-Service
3.2.4 Discounts
3.2.5 Inventory Management Agreements
3.3 Specialty Products
3.4 Reimbursement
3.5 Clawback
3.6 Pharmacy Benefit Managers
3.7 Diversion
3.7.1 Re-importation
3.7.2 Parallel Trade
3.8 Disintermediation
3.8.1 Direct-to-Pharmacy
3.8.2 Case study: Pfizer and Alliance Healthcare (Alliance Boots)
3.8.3 Pfizer's DTP Discounts
3.8.4 Internet Pharmacies
3.8.5 Mail Order Pharmacies
3.8.6 Supermarkets
3.9 Counterfeits
4.The US Pharmaceutical Wholesale and Distribution Market
4.1 Overview
4.2 Trade Associations
4.3 Legal Matters
4.4 The Fee-for-Service Switch
4.5 Where Do the Drugs End Up?
4.6 Re-importation of Pharmaceuticals
4.7 US Market Forecast
5. The Three Leading US Wholesalers
5.1 Overview
5.2 Consolidation and Market Share
5.3 US Big Three: Market Share Forecast
5.4 US Big Three: Earning Margins
5.5 Important Note on Dates and Data
5.6 AmerisourceBergen
5.6.1 Divisions
5.6.2 Customers
5.6.3 Recent Performance
5.6.4 Forecast and Analysis
5.7 Cardinal Health
5.7.1 Divisions
5.7.2 Customers
5.7.3 Recent Performance
5.7.4 Forecast and Analysis
5.8 McKesson Corporation
5.8.1 Operating Segments
5.8.2 Largest Customers
5.8.3 Recent Performance
5.8.4 Forecast and Analysis
6.The European Pharmaceutical Wholesale and Distribution Market
6.1 Overview
6.2 Trade Associations
6.3 Legal Issues
6.4 Major Differences between US and European Pharmaceutical Wholesale and Distribution Sectors
6.4.1 Pharmaceutical Price Controls
6.4.2 Parallel Imports
6.4.3 State-Funded Healthcare and Reimbursement
6.4.4 Generics
6.4.5 A Single Market?
6.4.6 Consolidation of European Pharmaceutical Wholesale Industry
6.4.7 Independent Pharmacies are Rare in Parts of Europe
6.4.8 Pre-wholesaling
6.4.9 Direct-to-Pharmacy
6.4.10 European Online Drug Sales are Low and Limited to OTC
6.4.11 Accounting Practices
6.4.12 Exchange Rate Information
6.5 European Pharmaceutical Wholesale and Distribution Market Forecast
7. The Three Leading European Wholesalers
7.1 Overview
7.2 Big Three: Market Share
7.3 Big Three: Market Share Forecast and Analysis
7.4 Alliance Boots
7.4.1 Overview
7.4.2 Divisions
7.4.3 Margins
7.4.4 Recent Performance
7.4.5 Analysis and Forecast
7.5 Celesio
7.5.1 Overview
7.5.2 Divisions
7.5.3 Revenue by Country
7.5.4 Recent Performance
7.5.5 Forecast and Analysis
7.6 The Phoenix Group
7.6.1 Overview
7.6.2 Group Members
7.6.3 Revenue by Country
7.6.4 Phoenix Group to be Sold?
7.6.5 Recent Performance
7.6.5.1 Phoenix Group
7.6.5.2 Phoenix Pharmahandel (Germany)
7.6.5.3 Tamro (Nine Scandinavian and Baltic Countries)
7.6.6 Forecast and Analysis
8. Major Issues Affecting the Pharmaceutical Wholesale and Distribution Sector
8.1 Increased Demand for Pharmaceuticals
8.2 Specialty Drugs
8.3 Generics
8.4 Globalisation
8.5 Low Margins
8.6 Disintermediation
8.6.1 Direct-to-Pharmacy
8.6.2 Supermarkets
8.6.3 Internet and Mail Order Pharmacies
8.7 Consolidation Throughout the Industry
8.8 Counterfeits
8.9 Reimbursement Issues
8.10 Diversion
9. Expert Opinion
9.1 Monika Derecque-Pois
9.1.1 Importance of the Full-Line Wholesaler
9.1.2 Challenges Facing the Industry
9.1.3 Security of the Supply Chain and EU Legislation
9.1.4 Detecting Counterfeits
10. Conclusions
10.1 Wholesalers are the Vital Link between Manufacturers and Retailers
10.2 Pharmaceutical Wholesaling is a Sector with High Revenues but Low Margins
10.3 The Pharmaceutical Wholesale and Distribution Industry is in a State of Transition
10.4 The Direct-to-Pharmacy Model Threatens Revenues but Guarantees Profits
10.5 The Industry's Main Driver is Increased Demand for Pharmaceuticals
10.6 Generics have Good Margins Now, But for How Long?
10.7 The US and European Pharmaceutical Wholesale Sectors are both Dominated by a Small Numbers of Large Wholesalers
10.8 Vertical Integration of Wholesalers and Retailers is Common in Europe
10.9 Consolidation Threatening Wholesalers Margins?
10.10 Diversion: Who Benefits?
10.11 There are No Easy Solutions to Stop Counterfeit Medicines
10.12 The Future of Pharma Wholesale and Distribution
List of Tables
Table 2.1 Pharmaceutical Wholesale Industry: Worldwide and Area Revenue Forecasts, 2008-2025
Table 4.1 The US Wholesale Industry: Breakdown by Sector, 2008
Table 4.2 Number of States with Pedigree Legislation
Table 4.3 HDMA Members: Customers by Revenue Share, 2008
Table 4.4 HDMA Members: Revenue by Product Type, 2008
Table 4.5 US Pharmaceutical Wholesale Market: Forecast, 2010-2025
Table 4.6 Drivers and Restraints for the US Pharmaceutical Wholesale Industry, 2010
Table 5.1 US Big Three: Revenues and Market Shares, 2008
Table 5.2 US Big Three: Revenue and Market Share Forecast, 2010-2025
Table 5.3 How Prescription Dollars are Spent, 2009
Table 5.4 US Big Three: Revenue, Gross Profit and Net Income, 2008
Table 5.5 US Big Three: Fiscal Years
Table 5.6 AmerisourceBergen: Major Customers, Fiscal Year 2009
Table 5.7 AmerisourceBergen: Revenues, Gross Profit and Net Income, 2005-2007
Table 5.8 AmerisourceBergen: Revenue, Profit and Income Forecast, 2010-2025
Table 5.9 Cardinal Health: Division Revenue and Income, Fiscal Year 2009
Table 5.10 Cardinal Health: Customers by Contribution to Overall Revenues, Fiscal Year 2009
Table 5.11 Cardinal Health: Revenue, Profit and Income, 2005-2009
Table 5.12 Cardinal Health: Liabilities, Three Months to September 2009
Table 5.13 Cardinal Health: Revenue, Profit and Income Forecast, 2010-2025
Table 5.14 Cardinal Health: Revenue and Profit by Type of Customer, 2005-2009
Table 5.15 McKesson: Division Revenue and Gross Profit, Fiscal Year 2009
Table 5.16 McKesson: Customers by Contribution to Overall Revenues, Fiscal Year 2009
Table 5.17 McKesson: Revenue, Profit and Income, 2005-2009
Table 5.18 McKesson: Revenue, Profit and Income Forecast, 2010-2025
Table 6.1 The European Pharmaceutical Wholesale Market by Type of Wholesaler, 2008
Table 6.2 How Price Controls Vary Across Europe, 2009
Table 6.3 How Pharmaceutical Retail Prices are Divided, by European Country, 2003/2004
Table 6.4 Generic Market Share by Country, 2008
Table 6.5 Number of Retail Pharmacies Owned by Three European Pharmaceutical Wholesalers, 2008
Table 6.6 European Pharmaceutical Distribution Market: Forecast, 2010-2025
Table 6.7 European Pharmaceutical Wholesale Market: Drivers and Restraints, 2010
Table 7.1 The Big Three European Wholesalers: Revenues and Market Shares, 2008
Table 7.2 European Big Three: Market Share Forecast, 2010-2025
Table 7.3 Alliance Boots: Revenue and Trading Profit by Division, 2008
Table 7.4 Alliance Boots: Division Profit Margins, 2008
Table 7.5 Alliance Boots: Pro Forma Results, 2007-2009
Table 7.6 Alliance Boots: Consolidated Results, 2007-2009
Table 7.7 Alliance Boots: Effect of Financial Costs on Profits, 2008-2009
Table 7.8 Alliance Boots: Revenue and Net Profit Forecast, 2010-2025
Table 7.9 Where Celesio Operates, 2009
Table 7.10 Celesio: Revenue, Gross Profit and Net Profit by Division, 2008
Table 7.11 Celesio: Division Profit Margins, 2008
Table 7.12 Celesio: Revenue by Country, 2008
Table 7.13 Celesio: Revenue, Gross Profit and Net Profit, 2005-2009
Table 7.14 Celesio: Revenue, Gross Profit and Net Profit Forecast, 2010-2025
Table 7.15 Phoenix Group: Members and Locations, 2010
Table 7.16 Phoenix Group: Revenue by Country, 2008
Table 7.17 Phoenix Group: Revenues, 2005-2009
Table 7.18: Phoenix Pharmahandel: Revenue and Income, 2005-2009
Table 7.19 Tamro: Revenue, Operating Income and Net Profit, 2005-2009
Table 7.20 Phoenix Group: Revenue Forecast, 2010-2025
Table 8.1 SWOT Analysis of the Pharmaceutical Wholesale and Distribution Sector, 2010
Table 8.2 Prevalence of the DTP Model in the UK, 2010
Table 8.3 Counterfeit Incidents, 2008
Table 8.4 Number of Counterfeit Incidents Recorded by PSI, 2002-2008
List of Figures
Figure 2.1 Pharmaceutical Wholesale Industry: Revenue Forecast by Area, 2010-2025
Figure 4.1 The Top Five US Wholesale Sectors by Revenue, 2008
Figure 4.2 HDMA Members: Customers by Revenue Share, 2008
Figure 4.3 HDMA Members: Revenue by Product Type, 2008
Figure 4.4 US Pharmaceutical Wholesale Market: Forecast, 2010-2025
Figure 5.1 US Pharmaceutical W&D Market by Share, 2008
Figure 5.2 US Big Three: Revenue and Market Share Forecast, 2010-2025
Figure 5.3 How Prescription Dollars are Spent: Share of $1 Spent on Prescription Drugs
Figure 5.4 US Big Three: Revenue, Gross Profit and Net Income, 2008
Figure 5.5 AmerisourceBergen: Divisions, 2009
Figure 5.6 AmerisourceBergen: Customers by Share of Revenues, Fiscal Year 2009
Figure 5.7 AmerisourceBergen: Revenue and Margins Forecast, 2010-2025
Figure 5.8 Cardinal Health: Division Contribution to Revenue, Fiscal Year 2009
Figure 5.9 Cardinal Health: Customers by Revenue Contribution, Fiscal Year 2009
Figure 5.10 Cardinal Health: Bulk and Non-Bulk Sales Contribution to Revenue, 2005-2009
Figure 5.11 Cardinal Health: Revenue and Margins Forecast, 2010-2025
Figure 5.12 McKesson: Division Contribution to Revenue and Profit, Fiscal Year 2009
Figure 5.13 McKesson: Customers by Contribution to Overall Revenues, Fiscal Year 2009
Figure 5.14 McKesson: Revenue and Margins Forecast, 2010-2025
Figure 6.1 Generic Penetration Rates by Percentage of Total Market Revenue: Selected European Countries and USA, 2008
Figure 6.2 The European Pharmaceutical Wholesale Market: Forecast, 2010-2025
Figure 7.1 Big Three European Wholesalers’ Market Shares, 2008
Figure 7.2 European Big Three: Revenue Forecast, 2010-2025
Figure 7.3 Contributions of Alliance Boots’ Divisions to Revenue and Trading Profit, 2008
Figure 7.4 Alliance Boots: Revenue and Profit Margin Forecast, 2010-2025
Figure 7.5 Contributions of Celesio’s Divisions to Revenue, 2008
Figure 7.6 Celesio: Revenue by Country, 2008
Figure 7.7 Celesio: Revenue and Margins Forecast, 2010-2025
Figure 7.8 Phoenix Group: Revenue by Country, 2008
Figure 7.9 Comparisons of Revenues of Tamro, Phoenix Pharmahandel and Phoenix Group, 2005-2009
Figure 7.10 Phoenix Group: Revenue Forecast, 2010-2025
Figure 8.1 Counterfeit Incidents by Area, 2008
Figure 8.2 Number of Counterfeit Incidents Recorded by PSI, 2002-2008