The economic significance of the pharmaceutical wholesaler in South Africa's health care industry

The purpose of this research paper is to examine and evaluate the economicsignificance of the pharmaceutical wholesaler in South Africa’s health careindustry.The pharmaceutical wholesaler experienced several challenges over the lastdecade. These challenges originated from changes in the competitiveenvironment of the industry and more recent changes in the regulatoryenvironment brought on by the State in its attempts to make medicine moreaccessible to the South African public. The wholesaler was forced by thesechanges to adapt its business model drastically in order to remaincompetitive. Historically the wholesaler made its profits by purchasing bulk ata discount, passing a fraction of the discount to its customers and adding amark-up to the purchase price. It was now forced to abandon the discountand mark-up scheme and distribute medicines by negotiating a fee for theservices it renders. Wholesalers now not only have to compete betweenthemselves but also with distributors on the same basis - by negotiatinglogistics fees with pharmaceutical manufacturers. Operating efficiency andcustomer service have become essential ingredients for the wholesaler in itsquest to remain competitive.