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Report Examines Healthcare Reform Impact on Distribution

Drug Channels Institute Study Shows How Healthcare Reform Will Affect U.S. Prescription Drug Distribution

The Drug Channels Institute, a management educator for and about the pharmaceutical industry, released the results of its exclusive, in-depth analysis of the highly dynamic prescription drug distribution industry.

In this report, the institute analyzes how U.S. healthcare reform will affect wholesalers. It cites such factors as the healthcare coverage expansion, new government requirements for prescription drug coverage, pending Medicaid pharmacy reimbursement changes, and expansion of the 340B drug discount program.

According to a release, the report also analyzes why the industry's top three companies-AmerisourceBergen, Cardinal Health, and McKesson-have recorded their first decline in drug distribution revenue growth. The finding is one of many new revelations and trends in Drug Channels Institute's new 2013-14 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Drug Channels Institute CEO Adam J. Fein, Ph.D., the study's author and a regarded expert on pharmaceutical economics, says, "The substitution of generic drugs for brand-name drugs is dramatically reshaping the U.S. pharmaceutical supply chain."

This 168-page analysis of the $300 billion U.S. drug distribution industry thoroughly dissects its interactions with the U.S. healthcare system. With 72 proprietary charts, exhibits, and data tables, this new research report is the most complete examination of the pharmaceutical distribution industry's economics, market structure, growth rates, and profit trends.

The report reveals how wholesalers and distributors are profiting from the growth in expensive specialty medications that treat such illnesses as cancer, multiple sclerosis, and rheumatoid arthritis. "Over the next few years, wholesalers and distributors could benefit from the pharmaceutical industry's shift from traditional brand- name drugs to specialty drugs," Fein said. "However, they risk being cut out of the changing specialty market, as third-party payers utilize specialty pharmacy channels and patient care shifts from community practices to hospital outpatient departments."

Drug Channels Institute, a division of Pembroke Consulting, Inc., is a provider of specialized management education and computer- based training for and about the pharmaceutical industry.

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Posted: October 2013