The Pharmaceuticals Wholesaling industry has had to contend with wholesale bypass, patent expiries and further cuts to generic prices
Melbourne, Australia (PRWEB) September 25, 2012
Following relatively strong growth in the first half of the decade, Pharmaceuticals Wholesaling industry growth rates have slowed since 2005-06, in line with changes to the industry's operating environment (including regulatory changes) and slower growth in the Pharmaceutical Benefits Scheme (PBS). According to IBISWorld industry analyst Arna Richardson, “the current PBS reform process, which represents the most fundamental change to the scheme in its 60-year history, is having a considerable effect on the operating environment of industry participants”. The Pharmaceuticals Wholesaling industry has also been influenced by changes to the Community Service Obligation that came into effect on 1 July 2010 as part of the Fifth Community Pharmacy Agreement.
Richardson adds, “in 2012-13, the industry is expected to contract by 1.8%, the third consecutive year of decline as it continues to contend with the effects of wholesale bypass, patent expiries and further cuts to generic prices”. These variables will drive Pharmaceuticals Wholesaling industry revenue down to an estimated $11.2 billion, slightly below 2007-08 levels of $11.6 billion. This equates to an annualised contraction of 0.7% over the five years through 2012-13. These variables will continue to affect the industry in the next five years, particularly if other upstream pharmaceutical manufacturers follow Pfizer's lead in switching distribution models. Growth over the five years through 2017-18 is expected to be muted.
The Pharmaceuticals Wholesaling industry is deemed to have a high level of concentration, with the major players including Australian Pharmaceutical Industries Limited, Zuellig Healthcare Holdings Australia Pty Limited, Sigma Pharmaceuticals Limited, Sanofi-Aventis Australia Pty Limited and Reckitt Benckiser Healthcare Australia Pty Ltd. Some wholesalers have been affected by pharmaceutical giant Pfizer's decision in early 2011 to sell its prescription pharmaceuticals directly to local pharmacies, thereby bypassing wholesalers. This has had significant implications for the three major full line wholesalers that dominate the industry.
For more information, visit IBISWorld’s Pharmaceuticals Wholesaling report in Australia industry page.
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IBISWorld industry Report Key Topics
The industry comprises companies that wholesale pharmaceutical products, including prescription drugs and over-the-counter medicines. The products are obtained from the relevant upstream manufacturer and distributed to hospitals and various retail outlets, including pharmacies and supermarkets.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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