Primary Wholesaler Agreement: A Reliable, Streamlined Approach

A primary wholesaler agreement allows pharmacies to secure the majority of their pharmaceutical purchases through a single, contracted wholesaler. While there is often some flexibility to supplement with secondary suppliers, the primary agreement remains the dominant source of inventory.

Benefits of a Primary Wholesaler Agreement

1. Product Selection Accessibility – Primary wholesalers offer extensive product availability, ensuring that pharmacies can access both branded and generic medications without excessive sourcing efforts.
2. Streamlined Purchasing – Having a single, primary supplier simplifies ordering, invoicing, and inventory management, reducing operational complexity.
3. Administrative Resources – Many primary wholesalers provide value-added services such as inventory management tools, pricing analytics, and business support to help pharmacies optimize their purchasing.

Challenges of a Primary Wholesaler Agreement

1. Waiting on Rebates – Pharmacies may need to wait for rebate payments, which can impact cash flow.
2. Set Payment Terms – Wholesalers often impose strict payment schedules, limiting flexibility for pharmacies with fluctuating cash flow.
3. Complex Deal Parameters – Contracts with primary wholesalers can be intricate, requiring careful negotiation and ongoing management to maximize cost savings.

Sourcing from Secondary Suppliers: A Flexible and Opportunistic Model

Alternatively, some pharmacies choose to fully source from secondary suppliers, leveraging competitive pricing and flexible payment options. While this approach requires more active management, it can yield financial advantages.

Benefits of Secondary Suppliers

1. Up-Front Deals for Cash Flow – Secondary suppliers often provide immediate cost savings, allowing pharmacies to benefit from up-front discounts rather than waiting for rebates.
2. Pay Term Flexibility – Unlike primary wholesalers with rigid payment terms, secondary suppliers may offer customized payment arrangements to align with a pharmacy’s cash flow needs.
3. Diversification of Vendors – Working with multiple suppliers reduces reliance on a single wholesaler, providing options when supply chain disruptions occur.

Challenges of Sourcing from Secondary Suppliers

1. Opportunity Cost of Using Multiple Options – Actively searching for the best deals and managing multiple suppliers requires additional time and effort.
2. Limited Access to Full Product Portfolio – Secondary suppliers may not always have comprehensive inventories, requiring pharmacies to piece together their purchasing from various sources.
3. Reduced Administrative Support – Unlike primary wholesalers, secondary suppliers typically do not offer extensive business support services, placing more responsibility on the pharmacy for inventory and financial management.

Making the Right Choice for Your Pharmacy

Finding the right balance between a primary wholesaler agreement and secondary suppliers is key to maximizing both cost savings and operational efficiency. Pharmacy Marketplace helps pharmacies strike this balance by identifying the optimal mix of primary wholesaler purchasing to maintain good standing and positive relationships while utilizing secondary suppliers when appropriate. This strategic approach ensures access to a broad product selection, maintains financial flexibility, and improves cash flow management. By leveraging Pharmacy Marketplace, pharmacies can streamline procurement, enhance supplier diversification, and optimize their purchasing strategy for long-term success.