4 Ways to Recognize a Good Pharmaceutical Distributor

February 12, 2020

Licensure, accreditation, and shared priorities rank high.

Pharmaceutical distributors are the intermediary that ships products from manufacturers to pharmacies and other providers. In addition to hospital and chain pharmacies, more than 22,000 independent pharmacies rely on their services on a daily basis, according to the Healthcare Distribution Alliance (HDA).

Distributors handle 92% of pharmaceutical sales in the United States, delivering more than four billion prescription medications safely and quickly. They also save the healthcare system as much as $53 billion annually through logistics and supply chain expertise as well as technological advancements.

Given their critical role in the pharmaceutical ecosystem, choosing the right pharmaceutical distributor for your pharmacy is more important than ever. Here are some criteria worth considering.

1. Distributors must be licensed to be an authorized trading partner.

“Drug diversion, counterfeiting, and the importation of unapproved drugs may result in potentially dangerous drugs entering the drug supply chain, posing a threat to public health and safety,” warns a 2018 report from the HHS. As a result, federal law requires rigorous and consistent standards for state licensing of pharmaceutical distributors to prevent criminal activity.

The FDA advises that prescription drugs should only be purchased from wholesale drug distributors licensed in the United States. Since distributors are often licensed in more than one state, it’s necessary to look for one that has been approved by the licensing agency in your home state. The FDA offers a link to state databases to identify your options.

2. A distributor with the VAWD seal can ensure that the supplies you receive are safe.

The Verified-Accredited Wholesale Distributors (VAWD) program was developed in 2004 to help protect the public from the threat of counterfeit drugs.

“VAWD accreditation helps ensure that the wholesale distribution facility operates legitimately, is licensed in good standing, and is employing security and best practices for safely distributing prescription drugs from manufacturers to pharmacies and other institutions,” says the National Association of Boards of Pharmacy (NABP), which administers the program.

VAWD-accredited distributors have undergone a review of their operating policies and procedures, licensure verification, a survey of their facility’s operations, and screening through the NABP Clearinghouse.

3. A distributor should be well informed about the many laws and regulations that govern the industry.

Primary among them is the Drug Supply Chain Security Act (DSCSA), enacted by Congress in 2013 to create one federal traceability solution for prescription medicines. DSCSA requires pharmacies to transact only with authorized trading partners as defined in the law.

In the recent “Serialization Readiness Survey” conducted by the HDA Research Foundation, distributors report that the majority of independent pharmacies did not understand DSCSA requirements, placing them well behind chain stores, health systems, and hospitals (Fig. 1).

“Distributors have a global understanding of some of the big picture issues, and they should be able to bring it to the corner pharmacy and help them understand it,” says Perry Fri, HDA’s executive vice president of Industry Relations, Membership and Education, as well as COO of its Research Foundation.

4. Pharmaceutical distributors and the pharmacists should share priorities.

Distributors and pharmacists with shared interests will find mutual benefits to working together to create optimal patient outcomes, great customer experiences, and a healthy bottom line for the pharmacy.

“Distributors have a vested interest in ensuring the viability of independent pharmacy,” notes Fri. “The services that distributors provide to independent pharmacies have a direct impact on patients because [they] help to make sure those pharmacies stay open and keep patients from having to drive long distances to find another pharmacy.”

The reciprocal business relationship between pharmaceutical distributors and the independent pharmacists they serve is a great resource in an industry that grows in complexity with each passing year.

Distributors should be expected to do their due diligence to ensure that their inventory is safe and that the services they provide will help pharmacies better provide for their patients. At the same time, it’s incumbent upon the pharmacist to ensure that they’re working with a partner that’s fully compliant with all industry laws and regulations.