Pharmaceutical Supply Chain in the U.S.
The pharmaceutical supply system is complex and involves multiple organizations that play
differing but sometimes overlapping roles in drug distribution and contracting. This complexity
results in considerable price variability across different types of consumers.
Top 5 Retail pharmacy chains in the U.S.
Top 3 Wholesalers in the U.S.
Between 1975
and 2000, the
number of
wholesale
distributors in the
U.S. declined from
approximately
200 to fewer than
50.
Top 5 Pharmaceutical manufacturers in the U.S.
Source: The Health Strategies Consultancy LLC
3/30/2022
1
Wholesale distribution regulations
1988
Prescription Drug Marketing Act of 1987 (PDMA)
• PDMA required that all drug wholesalers be
licensed by the states.
• PDMA prohibited the sales, trading, or distribution
of drug samples, by mail or common carrier, to
persons other than those licensed to prescribe
them.
• PDMA prohibited the reimportation of a drug into
the U.S. by anyone except the manufacturer.
2004
Verified-Accredited Wholesale Distributors (VAWD) program
• VAWD Oregon required any wholesale distributor located
outside the boundaries of Oregon, applying for registration
or re-registration, as a Class 1 Wholesaler, after January 1,
2008, must provide extra evidences.
• VAWD Indiana requires all wholesalers licensed in their
state to become VAWD certified.
Pills only flow in the authorized distribution networks
Source: Shining Light on the Gray Market
3/30/2022
2
Gray Market Drug Distribution
Typical market
An example of Fluorouracil
(a drug used to treat stomach, breast, and pancreatic cancer)
licensed in Maryland
licensed in New Jersey
Source: Shining Light on the Gray Market
Increasing prescription drug shortages leads to the generations of the gray market that
improving the drug price 1,000 times higher or more. Also, the “fake” pharmacies acquiring
drugs from distributors and selling the high demand drugs into the gray market.
Source: Shining Light on the Gray Market
3/30/2022
3
Securing the Pharmaceutical Supply Chain
Information infrastructure for tracking and tracing
Source: Securing the pharmaceutical supply chain.
3/30/2022
4
Securing the Pharmaceutical Supply Chain
Source: reference 5.
3/30/2022
Blockchain Based Solution for Information Storage
5