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Specialty Distributors' Customer Segments Evolve Due to Changing Market Dynamics

March 25, 2014

ARLINGTON, Va. — The customer base served by U.S. specialty pharmaceutical distributors shifted in 2012 as a result of payer and market influences within the segment. This is according to the newest edition of Specialty Pharmaceutical Distribution: Facts, Figures and Trends, published by HDMA's non-profit research foundation, the Center for Healthcare Supply Chain Research.

While independent physician-owned and -operated clinics remain the largest customer segment, at 59 percent of the distributors’ sales, this represents a decrease from 66 percent in 2011. Sales to hospitals and specialty pharmacies, on the other hand, increased by 6 percent (combined) to comprise an average of 26 percent of specialty distributors’ sales. As the report notes, this may be correlated to an increase in public and private payers’ efforts to control costs in this segment, which further influence the types of distribution models selected by specialty manufacturers (limited vs. exclusive) and providers (Buy and Bill vs. External Delivery).

“As this publication demonstrates, distribution of specialty products is dependent on a range of factors,” said Kirk Kaminsky, Senior Vice President of Operations, McKesson Specialty Health. “As this industry continues to thrive, there will be unique opportunities and challenges involved in delivering these complex products.”

In its fifth edition, Specialty Pharmaceutical Distribution: Facts, Figures and Trends highlights more than 45 performance metrics for specialty pharmaceutical distributors and reviews a variety of topics related to this fast-growing industry, which now outpaces sales in the traditional pharmaceutical market. Areas analyzed include market characteristics, logistics and operations; specialty trading partners, types of distribution models and payer influence on these models; therapeutic trends in oncology; and future opportunities in biosimilars.

Research is based on primary survey data from specialty distributors; this year, the publication focuses solely on surveyed specialty distributors with more than $1 billion in sales. Secondary research also was compiled from previous Center reports, including “Specialty Pharmacy: Implications of Alternative Distribution Models,” and research from other healthcare organizations. This year’s publication is sponsored by CuraScript SD Specialty Distribution; McKesson Specialty Health, a division of McKesson Corporation; and, Genentech, A Member of the Roche Group.

According to IMS Health and calculations by the Center for Healthcare Supply Chain Research, specialty distributors manage nearly 40 percent of the approximately $86 billion U.S. market for specialty medications, delivering complex products that are typically developed for populations with chronic or rare diseases, and, among other factors, require special handling, storage and delivery. As reported by surveyed companies, specialty distributors provide efficiencies to the market by offering a range of services to support their trading partners and customers in this segment, including consulting, reimbursement and inventory management services; patient counseling; and recall and third-party logistics services.

While the types of customers served by specialty distributors also are evolving, so are the therapeutic categories of the products they deliver. Oncology products continue to represent the majority of products delivered, at one-third of distributors’ sales. Meanwhile, inflammatory conditions (such as rheumatoid arthritis and Crohn’s disease) also show increased sales, at 21 percent of distributors’ sales.

Moreover, distributor respondents indicated that oncology, inflammatory conditions and central nervous system disorders (or CNS, such as multiple sclerosis and Alzheimer’s disease) make up the top three therapeutic areas distributors expect to increase in importance in the coming year. CNS (specifically multiple sclerosis) and oncology also are among those products IMS Health predicts to lead the market in the next three years.

“We have already seen remarkable changes in how manufacturers, distributors, providers and payers collaborate to get these critical medicines to patients,” notes Karen J. Ribler, Executive Vice President and COO of the Center for Healthcare Supply Chain Research. “The introduction of new formulations, such as orally administered products and biosimilars, will lead to continued growth and innovation in this sector, with a critical role for specialty distributors to play as delivery models evolve.”


The HDA Research Foundation is the 501(c)(3) non-profit charitable organization of the Healthcare Distribution Alliance (HDA). The Foundation serves the healthcare industry by providing research and education focused on healthcare supply chain issues. The Foundation’s mission is to conduct research and disseminate information that will enhance the knowledge base, efficiency and effectiveness of the total healthcare supply chain; and to provide thought leadership to further enhance the safety and security of the healthcare supply chain through future-focused study and programming.


The Healthcare Distribution Alliance (HDA) represents primary pharmaceutical distributors — the vital link between the nation’s pharmaceutical manufacturers and more than 200,000 pharmacies, hospitals, long-term care facilities, clinics and others nationwide. Since 1876, HDA has helped members navigate regulations and innovations to get the right medicines to the right patients at the right time, safely and efficiently. The HDA Research Foundation, HDA’s non-profit charitable foundation, serves the healthcare industry by providing research and education focused on priority healthcare supply chain issues.


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