Cardinal Health appears to be focused on China. Since 2010,
the company has made over 7 acquisitions in the country, including that of
Zuellig Pharma China, all to broaden its geographic reach. Besides serving
existing Chinese pharmacies, it has also set up six Cardinal-Health branded
specialty pharmacies that sell directly to consumers.
Meanwhile, AmerisourceBergen acquired World Courier, a global
specialty transport and logistics provider for drugs, blood samples and medical
supplies. Earlier this year, AmerisourceBergen announced a $400bn, 10-year partnership
with Walgreen, the largest drug retailing chain in the US and UK’s Alliance
Boots. This agreement allowed for AmerisourceBergen to enter the European
market.
Now it appears it is McKesson’s turn to announce similar global
plans. The company confirmed rumors that it planned to acquire Celesio,
a German drug wholesaler that operates in 16 European countries, and also
oversees retail pharmacies throughout the region and has a presence in Brazil
as well.
Once approved by regulatory bodies, the synergies of this
latest acquisition will be great. Among Celesio’s strategies it is pursuing is to
expand its pharmacies across Europe and also that of supply chain optimization to
provide an end-to-end solution from manufacturer to pharmacies.
McKesson has achieved this by connecting with its Health
Mart and its combined Drug Trading and The Medicine Shoppe pharmacies. The
company applies a six sigma methodology in its approach to supply chain
efficiencies. It invests heavily in IT within its facilities including 28
distribution centers, a primary redistribution center, a strategic
redistribution center and two repackaging facilities within its US
pharmaceutical distribution business. In Canada, it has 16 distribution centers.
An added bonus to the Celesio acquisition is that of giving
McKesson a presence in the growing pharmacuetical market of Brazil. According
to McKinsey & Company, Brazil is the second largest pharmaceutical market
within the emerging markets, just behind China.
CVS, Walgreen’s largest competitor in the US, may also be keeping
a watchful eye on these developments. McKesson is a major supplier to this
large pharmacy chain and in order for it to grow and compete effectively
against Walgreens it may also be looking for opportunities. Will McKesson be a
part of this? We’ll see.
Meanwhile, the big three US wholesale drug distributors will
likely continue their expansion plans into global markets. While the strategies
of each seem to vary, the underlying reason for these moves are the same – grow
the business and take advantage of new emerging markets such as Brazil and
China.
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