Digital strategies in pharmaceutical distribution

Abstract

Effective management control of distribution is particularly important in the highly regulated context of the pharmaceutical industry. The distribution process has, until recently, been regarded as relatively simple. Products are transported from company warehouses to pharmaceutical wholesale distributors. From there (based on demand) they are distributed to retail pharmacies and medical institutions, and thereon to patients or consumers. Globally, the majority of pharmaceutical distribution is controlled by a small number of wholesalers. Manufacturers do, in some cases, supply physicians, hospitals and even patients directly but have largely relied on distributors or wholesalers to manage the physical movement of products. While the final price of a drug may be high, it generally costs very little to produce (this is certainly changing in terms of innovative biotechnology products) and it was not generally in a manufacturer’s interest to become too deeply enmeshed in the distribution chain (Figure 7.1).