Drugs, Drug Proprietaries, and Druggists' Sundries

SIC 5122

Companies in this industry

Industry report:

This industry classification includes establishments engaged in the wholesale distribution of items such as prescription drugs, proprietary drugs, druggists' sundries, and toiletries. Products handled by industry participants include antiseptics, bandages, blood plasma, cosmetics, hair preparations, perfumes, pharmaceuticals, nonelectric razors and razor blades, toothbrushes, and vitamins. Establishments primarily involved in the wholesale distribution of surgical, dental, and hospital equipment are included in SIC 5047: Medical, Dental, and Hospital Equipment and Supplies.

In 2006 the total number of establishments engaged in this industry was 10,418. These companies employed 141,177 workers and posted sales of approximately $350 billion that year. The average sales per establishment was about $39.4 million. States with the highest establishments were California with 1,715, New York with 1,003, and Florida with 933.

Product categories within the industry that generated the largest sales were, first, by a wide margin, pharmaceuticals, with more than $111 billion, followed by cosmetics, perfumes, and hair products with $11 billion, and third, drugs and drug proprietors with sales of more than $8.3 billion.

In the late 2000s, the industry reported 11,447 establishments with industry-wide employment of 11,447 workers. The total number of established grew to 11,447 in 2009, as did the workforce to 144,549 people, however, industry sales fell to an estimated $316.2 billion. Once again, wholesaling of pharmaceuticals was the top performer with sales totaling $126.9 billion, followed by drugs and drug proprietors with sales falling from $8.3 billion in 2006 to $3.4 billion in 2009.

According to U.S. government predictions, demand for pharmaceuticals was "insensitive" to the national economy, meaning that fluctuations in the country's overall business climate had little impact on demand for the industry's products. National concern over rapidly rising costs, however, was mounting and bringing change to traditional distribution patterns. Price increases, which marked the early to mid-1990s, were beginning to slow during the final years of the decade.

The Federal Food and Drug Administration (FDA) mandated drug manufacturers to place bar codes on all drugs dispensed in hospitals as a means of reducing medication errors. The FDA required manufacturers to put bar codes on individual doses as early as 2006. The labels were expected to prevent 413,000 medication errors through the 2020s.

Drug merchants maintain their own websites where they offer pharmaceutical and laboratory products, as well as health related information services. The U.S. Department of Commerce reported in 2004 that drugs and sundries wholesalers' online sales rose 24 percent, or $19 billion, and their overall sales rose 20 percent, or $33 billion. In fact, according to the U.S. Department of Commerce, more than half of the Internet sales generated were from drugs and sundries. Overall online sales for the industry were $14 billion versus their total sales of $32 billion.

Of the estimated four billion prescriptions filled at 54,000 pharmacies annually, industry leaders McKesson Corp., Cardinal, and AmerisourceBergen or commonly referred to as the "Big Three" wholesalers constituted 90 percent of the market in 2008. While the rest of the nation was experiencing an economic downturn, pharmaceutical wholesaler's revenue increased eight percent in 2008 to $368 billion after a six percent increase in 2009, according to Pembroke Consulting, a Philadelphia distribution and manufacturing consultancy firm. The industry hopes to get a boost from the aging population and health reform going forward.

The Big Three wholesalers revenue climbed 4.6 percent to $257.1 billion in 2009, which proved to be "recession proof." However, according to Adam J. Fein, Ph.D. of Pembroke Consulting, certain trends likely to affect the drug wholesaling industry over the next five years include industry consolidation, a decline in pharmaceutical expenditures, stress on generic profitability, and the growing competition among drug wholesalers in dominance the specialty drug market.

One industry leader was McKesson Corp., based in San Francisco and formed when McKesson, distributor of pharmaceuticals, bought HBO-ACI, which specialized in healthcare information systems and technology. The company posted 2006 sales of $88 billion and had 26,400 employees. In 2003 McKesson acquired Sky Pharmaceuticals Packaging Inc., a supplier of unit dose bar coded packaging, which better meets the government's regulations on standard bar coding.

McKesson Corp., the leading pharmaceuticals distributor in the U.S. reported revenues of 101.7 billion in 2008 reaching $108.7 billion in 2010 with 32,500 employees. The company services more than 40,000 retail and institutional pharmacies in the U.S. and Canada.

Other leaders were Cardinal Health, Inc., of Dublin, Ohio, with 2006 sales of $81.4 billion and 55,000 employees; AmerisourceBergen Corporation of Chesterbrook, Pennsylvania, with 2005 sales of $54.6 billion and 13,400 employees; and Owens and Minor, Inc., of Mechanicsville, Virginia, with 2005 sales of $4.8 billion and 3,700 employees.

Cardinal Health, Inc., had revenues of $91 billion in 2008 and $98.5 billion in 2010 with 31,200 employees, while AmerisourceBergen Corporation had sales of $71.7 billion in 2009 and $77.9 billion with 10,000 employees. Owens and Minor, Inc. reported $7.2 billion in 2008 and more than $8 billion in 2009 with 4,800 employees. Others included Morris & Dickson, FFF Enterprises, H.D. Smith, NC Mutual Wholesale Drug, Value Drug Company, Anda Distribution, and Harvard Drug Company.

The majority of the establishments in this classification were small, employing fewer than five people. In 2006, 6,215 companies had fewer than five employees; 1,512 companies had between five and nine employees; 1,190 had between 10 and 24; 736 had between 25 and 99; 252 had between 100 and 499; and 27 had 500 or more employees.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Drugs, Drug Proprietaries, and Druggists' Sundries

US Wholesale Trade-STATS-Seasonally Adjsted Levels-Oct 10.
FWN Select; October 10, 2001; 700+ words
...6249 6284 6642 Drugs, drug proprietaries and druggists' sundries...6419 6486 6781 Drugs, drug proprietaries and druggists' sundries...03 1.02 Drugs, drug proprietaries and druggists' sundries...
Back To The Basics: Financial And Labor Productivity Benchmarks On Nu Skin Enterprises Inc Released By ICON Group International Ltd.
Internet Wire; November 11, 2002; 700+ words
...for over 32 Wholesale Dealing in Drugs, Drug Proprietaries and Druggists' Sundries companies are available now, including...Inc and other Wholesale Dealing in Drugs, Drug Proprietaries and Druggists' Sundries companies. The Pretax Margin...
Back To The Basics: Financial And Labor Productivity Benchmarks On McKesson Corp. Released By ICON Financial Advisory Services, LLC.
Internet Wire; July 5, 2002; 700+ words
...for over 30 "Wholesale Dealing in Drugs, Drug Proprietaries and Druggists' Sundries " companies are available now, including...and other "Wholesale Dealing in Drugs, Drug Proprietaries and Druggists' Sundries " companies. The Gross Profit ...
Newly certified woman-owned business.(Directory)(Directory)
Set-Aside Alert; June 11, 2004; 700+ words
...Koenig 516-599-1776 F: 516-599-1451 www.harrydkoenig.com misskingsley1776@aol.com Drugs, Drug Proprietaries, and Druggists' Sundries Ideas & More Corp. 4 Brookstan Road Nesconset NY 11767 Christine Blusonis 631-366-4252 F...
ODJ U.S. Wholesale Trade-STATS-Seasonally Adj Pct Changes.
FWN Select; March 12, 2002; 599 words
...5 Paper & paper products............ -0.4 -1.4 -10.0 -0.6 0.5 -8.0 Drugs, drug proprietaries and druggists' sundries............. -0.6 2.4 27.1 -0.2 1.0 14.9 Apparel, piece goods, and...
US Wholesale Trade-STATS-Seasonally adj. pct chg-Oct 10.
FWN Select; October 10, 2001; 545 words
...9 Paper & paper products........... -0.6 -0.5 -5.9 -1.0 -2.4 -5.3 Drugs, drug proprietaries and druggists' sundries............ 2.2 -0.6 13.7 2.6 -1.2 25.5 Apparel, piece goods, and notions...
News In Brief.(Statistical Data Included)(Illustration)
The Bond Buyer; February 10, 2000; 700+ words
...sales of metals and minerals, except petroleum were up 2.2%. Among nondurable goods, sales of drugs, drug proprietaries, and druggists' sundries increased 3.4%, while farm-product raw materials fell 6.1%. -- Chip Barnett Florida...
News In Brief.
The Bond Buyer; April 7, 2000; 700+ words
...nondurable goods, sales of petroleum and petroleum products increased 4.1% from last month and drugs, drug proprietaries, and druggists' sundries rose 1.5%. Total inventories of merchant wholesalers were up 0.7%, seasonally adjusted...

Search all articles about Drugs, Drug Proprietaries, and Druggists' Sundries