Drug Distributors Still Benefiting from Drug Price Inflation but Face Major Profit Challenges, Says New Drug Channels Institute Study

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Today Drug Channels Institute, a leading management educator for and about the pharmaceutical industry, released its exclusive, in-depth analysis of the highly dynamic prescription drug distribution industry.

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We project that U.S. drug distribution revenues at the Big Three public wholesalers—AmerisourceBergen, Cardinal Health, and McKesson—will exceed $400 billion in 2016.

Today Drug Channels Institute, a leading management educator for and about the pharmaceutical industry, released its exclusive, in-depth analysis of the highly dynamic prescription drug distribution industry. Drug Channels Institute’s new 2016–17 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors reveals how list price increases of brand-name drugs are boosting the industry’s revenues, even as changes in the U.S. healthcare system threaten wholesalers’ profits.

“We project that U.S. drug distribution revenues at the Big Three public wholesalers—AmerisourceBergen, Cardinal Health, and McKesson—will exceed $400 billion in 2016,” said Drug Channels Institute CEO Adam J. Fein, Ph.D., the study's author and a widely regarded expert on pharmaceutical economics and the drug distribution system. “But any change in drug price inflation rates or in manufacturers’ rebate strategy will be very negative for wholesalers’ future revenues and profits.

“Consolidation among pharmacies and hospitals is making it difficult for wholesalers to capture value and profits from the booming specialty drug market,” Fein adds. “And contrary to many people’s expectations, specialty biosimilar drugs seem poised to deliver only minimal incremental profits for wholesalers.”

These findings are among the many insights and trends in this highly regarded report, now in its seventh edition. With more than 100 proprietary charts, exhibits, and data tables, it offers the only complete examination of the pharmaceutical distribution industry’s economics, market structure, growth rates, forces of change, and interactions with the U.S. healthcare system.

The 2016–17 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors provides a thorough analysis of each public wholesaler’s business segments and underlying profitability, based upon DCI’s proprietary economic models. It also analyzes many crucial healthcare trends that will affect wholesalers and distributors, including: the growth of specialty pharmacies, changes in the generic drug market, new government regulations, hospitals’ acquisition of physician practices, the growth of narrow pharmacy networks, and much more.

To purchase and immediately download the new report, visit
http://drugchannelsinstitute.com/products/industry_report/wholesale/.

ABOUT DRUG CHANNELS INSTITUTE

Drug Channels Institute, a division of Pembroke Consulting, Inc., is a leading provider of specialized management education and computer-based training for and about the pharmaceutical industry. To access Dr. Fein’s popular Drug Channels blog, visit http://www.drugchannels.net.

MEDIA CONTACT:
Tamra Feldman
Pembroke Consulting, Inc.
215-523-5700 extension 14
Email: admin(at)pembrokeconsulting(dot)com

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Tamra Feldman
@DrugChannels
since: 03/2009
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