Inside: Distributors are your independent pharmacy’s most important business partners. Learn everything to look for in a pharmaceutical distributor to protect your business and maximize your profits.
Whether you need a primary distributor, a secondary, or both, the credentials of your pharmaceutical distributors matter.
Although it can feel financially smart to shop around for the lowest price, independent pharmacies should use caution.
Low prices can come with steep hidden costs.
Illegitimate secondary pharmaceutical distributors sometimes dangle attractive price tags and flash sales knowing profit-starved pharmacies will bite.
Because most independent pharmacy owners have so much going on, they don’t have time to investigate all distributors before they buy from them. Plus, drug distribution is highly regulated, so what’s the worry?
RELATED: How to Avoid Dispensing Counterfeit Imported Pharmaceuticals.
The upshot is: If you partner with the right pharmaceutical distributors, you protect your pharmacy and your patients.
But you’re busy running a business. You don’t have time to act as a drug distribution sleuth.
So, we’ve put together a quick list of some elements to look for in a pharmaceutical distributor. That way, you can have peace of mind knowing you’ve done your homework.
More than keeping your business safe, you should also partner with pharmaceutical suppliers that have good business practices. Ones that are reliable with a proven track record.
8 Things to Look for in a Pharmaceutical Distributor
This list also includes the most important attributes a pharmaceutical wholesale distributor needs to make it worthy of your pharmacy’s business.
1. Licensure
All pharmaceutical wholesalers need a license from their state board of pharmacy.
If they don’t have it, don’t do business with them. Not only is it an unwise business choice, it’s also illegal.
And, make sure the distributor is licensed in your state before buying from it. Some pharmaceutical distributors that are licensed in one state may still do business in another.
Verify wholesale drug distributor licenses on the U.S. Food and Drug Administration (FDA) website.
2. Accreditations
Licensure on its own isn’t enough to make a distributor credible.
In part, because the requirements for licensure vary from state to state. Some states are stricter than others, which means a distributor that passes licensure in one state might not pass it in another.
So, many illegitimate distributors obtain licenses in states with lax requirements.
Which means that while licensure is necessary, it’s not enough.
That’s where Drug Distributor Accreditation (formerly VAWD) comes in. Drug Distributor Accreditation regulated by the National Association of Boards of Pharmacy (NABP).
The Drug Distributor Accreditation review process includes:
- A rigorous review of operating policies and procedures
- Licensure verification
- Survey of a facility’s operations
- Screening through the NABP Clearinghouse
Unlike licensure, NABP accreditation standards apply equally to every supplier no matter the state they reside in.
When you work with accredited distributors, you know they’ve met the strictest standards that currently exist.
To verify if a pharmaceutical wholesaler has achieved Drug Distributor Accreditation, check the NABP’s accredited facilities list.
3. Sourcing
Trustworthy pharmaceutical distributors source all their pharmaceuticals directly from the manufacturer.
If the drugs don’t come from the manufacturer, you can’t tell where they’ve been. They could have exchanged hands several times before making their way to your pharmacy.
Which allows ample opportunity for fraudulent or substandard drugs to sneak their way in.
The FDA advises healthcare professionals to know the source of the prescription drugs they buy.
One way to know you’re getting pharmaceuticals sourced from the manufacturer is to only buy from members of the Healthcare Distribution Alliance (HDA). Distributors can only become HDA members if they source directly from the manufacturer.
4. Pedigree
Every pharmaceutical wholesaler should keep records of its supply purchases as part of its pedigree. Distributors are obligated to give you a pedigree before selling you a pharmaceutical unless the manufacturer of that product has designated that distributor as an “Authorized Distributor of Record.”
Always closely evaluate the pedigree to ensure the distributor sources its supply directly from the manufacturer.
The pedigree should include the following information:
- The business name and address of all parties to each prior transaction involving the drug, starting with the manufacturer
- The proprietary and established name of the drug
- Dosage
- Container size
- Number of containers
- The drug’s lot or control number(s)
- The date of each previous transaction
If pharmaceutical distributors won’t give you a pedigree, or they aren’t an Authorized Distributor of Record, don’t do business with them. If something doesn’t quite add up, avoid them.
5. Track-and-trace compliance
In 2013, Congress passed the Drug Supply Chain Security Act (DSCSA), or Title II of the Drug Quality and Security Act), which created measures to enhance pharmaceutical traceability.
The law is being implemented gradually through 2023. But pharmaceutical suppliers must already comply with many DSCSA regulations and continue to do so until the law is fully in place.
Check into the distributor’s DSCSA requirements to make sure they’re compliant.
6. Fill-rate accuracy
The last thing you want is to get a shipment you’ve been waiting for only to find that it’s not what you ordered.
Some pharmaceutical distributors have a poor track record of filling orders accurately.
A good practice is to see if they mention their fill rate on their website or in their marketing. If they don’t mention an accuracy rate, then they probably aren’t that accurate.
Otherwise, they’d tell you about it.
With so many pharmaceutical wholesalers to choose from, don’t settle for one you can’t count on.
7. Timeliness
The only thing worse than receiving a wrong order is receiving an order after you need it.
Late shipments can legitimately cost you business. A patient who needs a prescription now won’t wait until later.
And when another pharmacy gives her what she needs, she’ll likely never come back to your business.
Partner with pharmaceutical distributors that get orders shipped on time. And look for one that offers convenient shipping options.
8. Full service
What’s easier and more efficient? Getting all your generic and brand name drugs from one place or placing orders from multiple sources?
Many secondary pharmaceutical distributors offer a limited range of products. Usually, they offer generics but not brands. Or, they may not carry hard-to-find products.
So, you end up placing several different orders in one day to get all the pharmaceuticals you need.
But you don’t have to juggle multiple distributors to get everything you need.
Find a pharmaceutical supplier that offers a full line of inventory. And, choose one that makes it easy to order all your pharmaceuticals after a long day at work or at a moment’s notice.
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
