The entire pharmaceutical industry, from supplier to wholesaler to retailer, is experiencing fundamental change. As the health care industry reaches 18 percent of the gross national product, the public has become increasingly aware of escalating health care costs. Much of the blame, right or wrong, has been directed to the pharmaceutical industry. This, coupled with an aging population, increased popularity of drug therapy, and the shift of primary medical care out of the hospital, has caused competitors at all three levels of the pharmaceutical industry to change both their strategies and structures in an attempt to become more efficient.
This report clearly illustrates that the catalyst for change originated at the wholesaler level, but has now expanded to all levels of the industry. While many industries (e. g., retail) have made efforts to eliminate the middleman from the manufacturer-retailer relationship, in order to cut expenses, the wholesale pharma ceutical industry has improved its technology and customer service to a level cannot be duplicated by either manufacturers or retailers. Elimination of the drug wholesaler would no longer be cost effective to the industry. Through automation, computer linkages, and efficient delivery systems, the drug wholesaler industry has responded to constant squeezing of profit margins. In addition to productivity improvements, the drug wholesaler continue to experience changes through extensive consolidations, alterations in delivery systems, re-evaluations of product mix, reexaminations of their strategic approaches (niche or national markets), and redefining“customer service”. Continual change is inevitable as a new health care system unravels in the U. S.

View full abstract

At present the Japanese pharmaceutical wholesale industry is facing significant changes in the structure of their systems and environment externally while simultaneously facing increasing competitiveness and reorganization with in the industry; moreover, the internal pressures generated by these external factors serve to increase strategic risks.
We have analyzed the strategies and activities of firms in the industry by establishing analytical parameters surrounding the wholesale companies. These analysis should be valuable for wholesale companies who position themselves in the middle of change and who are seeking to determine which kind of strategy is desirable to add value to their services. Moreover, we have analyzed how to understand the competition within the wholesale industry from a systematic perspective. Our analysis revealed that there exists strong desire to integrate two perspectives: the micro perspective of the firm in the industry and the macro perspective of the industry itself, but they do nonetheless continue to be distinctively separate.
We have also organized the rudiments of the market strategy in the wholesale industry based on previous analysis. However, many of these analysis were based on the“old rules”, which must be altered to incorporate the new rules. It is important to realize for the wholesale companies that this analysis emphasized the risk of maintaining the traditional hypothesis in the industry when facing the transition of the strategic stances of vendor, etc.
With respect to reorganization in the industry and price competition, the Kyushu region are quite well known in handling these issues quite handsomely. We have atudied the conditions for success for reorganization in the Kyushu region and have analyzed its applicability to the future. Although it is difficult to directly apply the results of the Kyushu region to other areas, we believe that this case example reveals much interesting and worthy data.

View full abstract