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Analysis of Specialty Distributors Reveals Continued Growth

December 13, 2019

ARLINGTON, Va. — A new analysis published by the HDA Research Foundation indicates that oncology drugs, autoimmune and HIV therapeutics fueled specialty pharmaceutical segment growth in 2018. The 2019 Specialty Pharmaceutical Distribution: Facts, Figures and Trends indicates that oncology therapeutics account for most specialty distributor sales at 48.4 percent.

“Specialty drugs account for nearly half of distribution industry’s sales and will continue to grow in importance as new drugs enter the pipeline,” said Perry Fri, Executive Vice President of Industry Relations, Membership and Education, HDA; and COO of the HDA Research Foundation. “This annual survey offers an insightful perspective and showcases the many important services HDA distributors offer in this sector.”

Specialty pharmaceuticals are generally defined as drugs available in one or more types of delivery systems (infusion, injection, orals, patches, micro-needles). Products are formulated to treat chronic, complex and rare diseases; and meet at least four out of seven criteria related to cost, delivery, distribution and patient care.

Primary report research and data are based on the results of a survey sent to HDA-member specialty distributors. Survey respondents (four companies) were characterized by sales of $1 billion or more in fiscal year 2018; average gross specialty sales of more than $21 billion; and distribution of specialty products to all 50 states. In addition, secondary data were collected from organizations such as IQVIA and the Food and Drug Administration (FDA).

Among other findings from the latest edition:

  • Each company surveyed distributed products to more than 47,500 unique ship-to points. Independent physician owned clinics remained the primary holders of ship-to points — more than an average of 18,000 — followed by hospitals, retail pharmacies and specialty pharmacies.

  • Specialty distributors received on average more than 4,200 orders daily from their provider customers, with each order valued at an average of $21,000.

  • On average, specialty distributors maintained 380,500 square feet of warehouse space, with 24 percent of the area dedicated to temperature-controlled therapeutics.

  • Distributors achieved an average 98.8 percent order fill rate and delivered 1.5 days after order receipt and the mean turnaround time from when a courier picks up product to delivery is 18.1 hours.

  • Only a small percentage of specialty pharmaceutical product units was returned in 2018 (1.3 percent). Respondents reported that the average value of these returns was approximately $44 million per year. The most commonly mentioned reasons for returns were damaged in transit or overstocked product.

The 2019 Specialty Pharmaceutical Distribution: Facts, Figures and Trends was made possible through the sponsorship of Genentech, A Member of the Roche Group and Value Drug Company (gold sponsors); Amneal Pharmaceuticals, Inc., Associated Pharmacies, Inc. and Takeda Pharmaceuticals America, Inc. (silver sponsors); and Pharmacy First and Reliance Wholesale Inc. (bronze sponsors). The publication is available as a complimentary download through the HDA website.

ABOUT THE HDA RESEARCH FOUNDATION

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.

ABOUT THE HEALTHCARE DISTRIBUTION ALLIANCE

The Healthcare Distribution Alliance (HDA) represents primary pharmaceutical distributors — the vital link between the nation’s pharmaceutical manufacturers and 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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