Australian wholesalers hit by Pfizer's direct distribution plan

By Gareth Macdonald

- Last updated on GMT

Related tags Pharmacology

Australian Pharmaceutical Industries (API) and Sigma Pharmaceuticals shares’ have been hit by Pfizer’s decision to abandon wholesale distributors in favour of selling drugs direct to pharmacies.

API and Sigma, which along with privately-owned group Symbion were the US drug major’s main distributors in Australia, have seen the value of their shares fall more than 20 per cent since the news was announced late last week.

Pfizer said the plan, which will see it sell medicines direct to pharmacies after January 31 through an expanded Australian sales team and exclusive logistics partnership with DHL, will meet market challenges and the impact of impending patent loss.

John Latham, Pfizer Australia’s managing director, said: "In order to develop stronger partnerships with pharmacists and better adapt to the changing environment, we have decided that a dedicated field force with specific pharmacy experience and a direct distribution model for all our prescription medicines​.”

The “market challenges” include the Australian government’s recent decision to cut A$1.9bn ($1.89bn) from the prescription benefits scheme (PBS) as part of a healthcare reforms designed to encourage physicians to prescribe more non-branded pharmaceuticals..

Observers suggested the move fits with Pfizer's recent worldwide efforts to expand its generics business, reasoning that moving away from the wholesale distribution model in Australia will help sideline competitors with established networks.

Further support for this idea came from Lathams’ comments in a BusinessDaily​ interview, when he predicted that the size of the non-branded drug market would double to a value of more than A$500m over the next five years as a result of the PBS reforms.

API, which runs its own pharmacy network in addition to the distribution business, said it is analysing the implications of Pfizer’s plan and promised further comment “as soon as is practicable​.”

Sigma, which sold its pharmaceuticals business to South Africa generics firm Aspen Pharmacare for $900m in August, also said it is assessing the impact of the decision on its revenue.

Pfizer’s move is in direct contrast with the recently announced restructuring of its US distribution operations. Earlier this month the firm said it would hand over is Vonore distribution unit to Excel and outsource distribution to Deutsche Post DHL.

Related news

Show more

Related products

show more

Ultra Low Temperature Packaging solutions

Ultra Low Temperature Packaging solutions

Content provided by Almac Group | 12-Feb-2024 | Case Study

Advanced Therapy Medicinal Products (ATMPs) offer ground-breaking opportunities for treating injuries and disease, in particular for cases of severe, untreatable...

Efficient Freezing & Storage of Biopharmaceuticals

Efficient Freezing & Storage of Biopharmaceuticals

Content provided by Single Use Support | 06-Nov-2023 | White Paper

Various options exist for freezing biopharmaceutical bulk material, but selecting the most effective and efficient approach for each cold chain can be...

Unlock potential in buffer preparation

Unlock potential in buffer preparation

Content provided by Thermo Fisher Scientific - Process Liquid Preparation Services | 18-Sep-2023 | Infographic

Consider how the right partner can help you scale faster, mitigate risks, and optimize resources.

Follow us


View more