A world without distributors
Our robust and nimble distribution networks support the continuity of healthcare, even under the most challenging circumstances. The systems and processes we use every day ultimately offer providers more options and greater access to patient therapies.
But what would happen if distributors didn’t exist? Here are three ways healthcare in the United States could change.
1. Less innovation, more difficulty
For manufacturers, a world without distributors could shift focus away from innovation and toward infrastructure, ordering, billing, and collections. It could mean managing hundreds of thousands of healthcare provider customers.
For providers, it could mean managing accounts and orders from multiple manufacturers. The impact could be reflected in increased freight, ordering, and invoicing costs; delays in revenue generation; and financial risk exposure.
In 2022, the average number of…
2. Billions in cost increases
Industry analysis quantified the financial benefits of distributors on healthcare and found them to be significant. Approximately 84 percent of distributor customers received deliveries of prescription pharmaceuticals five times per week or more, which can help control costs and reduce the need for long-term product storage.1
In 2022, distributors…
Without distributors, considerable savings from value-added services like generic sourcing, patient adherence programs, and solutions that help independent community pharmacies thrive could vanish, and increased costs could be passed onto consumers.
Additionally, for manufacturers to ship directly to pharmacies and maintain the current service levels provided by distributors, the cost to the healthcare system could increase by as much as $63 billion dollars per year.2
[1] 94th Edition HDA Factbook. Accessed January 2024. Available online at https://www.hda.org/publications/94th-edition-hda-factbook-the-facts,-figures-and-trends-in-healthcare/
[2] https://www.hda.org/ Accessed January 2024.
3. Strained resources and elevated financial risk
Distributors also help mitigate financial risk for other stakeholders in the supply chain. We can help manufacturers recognize revenue sooner by taking immediate financial ownership of their products. Provider customers may then pay for these products on terms that reduce the time between dispense and reimbursement from third-party payers. Across the supply chain, this practice supports a marketplace that creates efficient, reliable access to the medications patients need most.
Distributors are essential to modern healthcare.
partners throughout the healthcare continuum are invaluable.
