The activity of pharmaceutical full-line wholesaling consists of purchase and sale; warehousing storage; order preparation; and delivery of medicines. Pharmaceutical full-line wholesalers carry and distribute the full assortment of products (in range and depth) to meet the needs of those with whom they have normal business relations and to deliver all medicines needed, in their geographical area of activity, within a very short period of time.
The link effect: Patients rely on the continuous availability of all medicines, whenever and wherever they are needed. Pharmacists therefore rely on full-line wholesalers as their natural partners to offer a “one stop shop” for all pharmaceutical products. This unique position allows wholesalers to wield substantial negotiation power, which induces strong competition on the price and service level in the pharmaceutical wholesaling sector and translates into direct benefits for patients. Similarly, manufacturers benefit from the assurance of full-line wholesaler to deliver all their products in an efficient, timely, safe and reliable manner.
In most countries medicines’ distribution is carried out as part of a public service function, which is largely performed by full-line wholesalers. In fact, in several countries this function is directly placed on wholesalers (in others countries on pharmacies) by means of stringent obligations, which are commonly referred to as Public Service Obligations. Pharmacies and patients can completely rely on full-line wholesalers for ensuring the continuous supply of all medicines. In this way even the most isolated patient can receive all vital medicines, including those rarely used, wherever and whenever needed.
The full-line wholesale distribution model finds its roots embedded in solidarity. In the classical full-line model wholesalers earn a percentage of the price of the supplied medicines. For this to be profitable it is important that wholesalers deliver a broad range of products, so that margins of different products add up to earn sufficient margins covering all costs. The full range, comprising all medicines used in the geographical areas of activity, allows for cross-subsidisation in a solidarity-based approach, so that less-expensive medicines can be supplied in exactly the same quality and frequency as expensive medicines. Less expensive medicines alone do not offer sufficient margins for wholesalers to cover the costs of storage, handling and supply.