No, we are talking about the Australian pharma wholesale space.....

No, we are talking about the Australian pharma wholesale space.. nothing to do with the supply model worldwide.

To answer your question, there are plenty of manufacturers worldwide supplying Australia. the majority of them do not distribute their products themselves. Most of the big 'brand pharma' companies distribute (or licence to others) their own patented products, and the remainder of the market volume (generics) are largely distributed by 4 main generic suppliers. The generics make up a sizable portion of the total market volume, and in turn the CSO revenue for the wholesalers.

You know most of the main suppliers already have direct relationships with the pharmacies and hospitals? The retail prices are passed on to the end customer by the wholesalers on behalf of the suppliers.. All the wholesalers are doing (for PBS products) is the distribution on behalf of the suppliers at higher prices (and less efficiently) than logistics experts like DHL would do it.

Some of the brand pharma companies (eg: Pfizer) have already moved to a direct model, and distribute their selection of products direct via DHL. This represents a significant efficiency for the supplier. When Pfizer did this, they were met with fierce objection from the wholesalers, but I believe AZ have since followed suit. If one (or more) of the generic suppliers made the move, it would remove a significant chuck of CSO dollars from the wholesaler space (and represent a meaningful cost saving to the suppliers).


For what its worth, Amazon are definitely not idiots and have been positioning themselves in the pharma space in the US for a while. If amazon get into this space in Australia down the track, I wouldn't want to be a pharmacy. I would anticipate Amazon causing a complete market disruption and aim to deliver direct to the patient. Supplier stocks Amazon > digital subscription > medication delivered promptly to patient.. >> and pharmacies become a front of shop/hair dye/sunscreen/bandaids retail outlet competing with FMCG.. might be a fair way off yet, but.. tick tock