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HDA research reveals that 95% of pharma transactions move through the traditional distribution channel.
New data released by the Healthcare Distribution Alliance (HDA) Research Foundation notes that total prescription sales through traditional pharmaceutical distribution jumped 15.5% in 2022 to reach $666 billion. As reported in the “94th Edition HDA Factbook,” an estimated 95% of all pharmaceutical sales move through the traditional distribution channel. Moreover, distributors are operating on the lowest margins since the study’s inception; in 2022, the industry’s net profit margin after taxes was 0.4%.
Prescription drugs make up the majority (98.1%) of distributors' sales, split among sales of brand-name drugs (51.4 %), branded specialty (35.5%), generic drugs (6.7 %), biosimilar products (3.9%), and generic specialty (0.7%). Chain drug stores (46%) remain distributors' largest customer segment, followed by hospitals and healthcare maintenance organizations (HMOs, 14.3%) and independent pharmacies (12.5%).
The Factbook—available as a complimentary download from HDA.org— is based on surveys collected at the corporate level of HDA traditional distributor member companies with annual sales greater than $1 billion. Secondary data from healthcare industry organizations complement original data to illustrate overall distributor demographics, along with trends in operations, information technology, market characteristics, customers and product mix, among other sections.
“The data reflected in the ‘HDA Factbook’ illustrate the operational efficiencies behind delivering 10 million medicines and healthcare products each day to hundreds of thousands of pharmacies, providers and ultimately patients,” says Perry Fri, EVP of industry relations, membership and education; and COO, HDA Research Foundation. “While the industry is not immune to certain economic realities like higher US inflation rates and product supply challenges, distributors have remained resilient and continue to be a critical partner across the healthcare supply chain.”