The European Pharmaceutical Wholesale Industry: - phagro

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The European Pharmaceutical Wholesale Industry
are derived by diversifying the risks on wholesalers’ profitability incurred by different
national market regulations and other market-related risks. Though concentration
in the wholesale market has grown considerably, further horizontal integration
may be expected in the new EU-member states but also in countries projected to
join the EU in the near future.
Figure 47: Service Spectrum provided by Pharmaceutical Wholesalers
Services
creating
added value
Additional services offered
independently from basic
services
Mandatory secondary services
Quality standards Delivery requirements
Primary services
Bridging function Quantity function
Source: IPF
As a consequence of this development, the importance of business models offering
services along the whole supply chain has grown significantly. The wholesalers’
service-spectrum may be split into three parts:
� Primary services of the branch
� Mandatory secondary services
� Added value services
Primary services are related to the core business of the industry, thus relating to
the traditional logistics-functions of bridging time and space. In addition, a quantity
function is exerted by buying large quantities, bulk-breaking and selling
smaller units, thereby improving the efficiency of the pharmaceutical distribution
chain by a degression of cost. Patients directly benefit from these primary services,
as full-line wholesaler have established an efficient, low-cost network of
distribution centers securing a Europe-wide fast and continuous supply of medicines,
even of slow moving products.
These primary (basic logistics) services are supplemented by mandatory secondary
services related to securing the high quality standards of the products distributed.
This quality function is chiefly observed by the principles and guidelines
of Good Distribution Practice published by the Commission of the European Communities
(94/C63/03) and Directive 2004/27/EEC amending Directive
2001/83/EEC. The guidelines and the Directive stipulate special requirements for
staff qualification, documentation, receipt, storage and delivery of medicinal prod-
IPF Institute for Pharmaeconomic Research