Full-line distributor sales reached $305 billion in 2013, representing 90% of pharma sales

The just-published 2014-15 Factbook, a compilation of HDMA member data as well as relevant industry statistics, gives evidence that full-line wholesalers are running faster—shipping more products each day, while handling a higher daily average of orders. The report also provides a snapshot of what the industry was looking like (in 2013) just as the Drug Supply Chain Security Act was passed; presumably, the report from a year from now will show how ready the industry was for the Jan. 1, 2015, deadline coming up for reporting transaction information to customers and FDA, per DSCSA requirements.

For the year, the 32 HDMA members handled $304.6 billion in sales, up from 2012’s $299.5 billion and representing 1.7% increase. An estimated 90.4% of all pharmaceutical sales are handled by the HDMA members, about where it was in 2012.

HDMA members handle 55,750 stockkeeping units (SKUs), slightly down from 2012’s 57,002 SKUs; these products come from 1,300 suppliers, up significantly form 2012’s 1,115. The biggest wholesalers have multiple distribution centers (DCs) across the country, while the smaller ones handle national or regional distribution from one or a handful of facilities; on average, each DC handled 4,764 orders per day, and picked 98,149 units per day—both figures are up significantly from the prior year. There are 153 DCs, up from the previous year's 144.

Inventory turnover rate dropped by a hair, from 12.9 in 2012 to 12.8 in 2013, while days inventory on hand rose from 28.2 to 28.6 (these are weighted averages, taking into account the dominance of the Big 3 wholesalers).

On the DSCSA front, the Factbook shows that in 2013, 71.3% of larger HDMA distributors (sales >$1 billion) used the all-important 856 Advance Ship Notice EDI data point with their manufacturer suppliers; while it is technically possible to fulfill DSCSA’s requirements by means other than the 856 ASN, that is the de facto method most wholesalers will be using. Almost two-thirds of larger distributors also make extensive use of EDI 844, Chargebacks, which is interesting because in 2013, chargebacks represented 20.3% of net sales, up from 2012’s 17.3%.

The Factbook is produced with support from Boehringer Ingelheim Pharmaceuticals; Apotex Corp.; RDC-Rochester Drug Cooperative, Inc.; TEVA Pharmaceuticals USA; EXP Pharmaceuticals Corp.; AstraZeneca Pharma; Ranbaxy Inc.; Smith Drug Company, Div. J M Smith Corp.; and Pharmacy First. It is available for purchase from the Center for Healthcare Supply Chain Research, the research arm of HDMA. At $95, it’s a bargain!