Pharma is targeting emerging markets, particularly in Asia, because of the growth potential those countries have. But one of the trickier parts of selling drugs in underdeveloped countries can be the logistics of getting them delivered. Many companies turn to partners with the expertise that can help them navigate the import laws and distribution obstacles that those countries present.
Bayer HealthCare has just signed a 5-year deal with DKSH for Cambodia, which is an extension of their existing relationship. The Swiss company actually focuses on Asia for its market expansion services. DKSH will provide everything from importation and custom clearance to logistics and distribution for Bayer. It is even handling credit and collection services.
The whole distribution thing can get very complicated, and different companies are taking different approaches. Pfizer ($PFE), for example, has taken a minority stake in Shanghai Pharmaceuticals, a key drug distributor in China. And last year Johnson & Johnson ($JNJ) found itself in court with its longtime Chinese distribution partner, Ruibangyonghe Trading. J&J said it discovered that Ruibangyonghe was underselling its products in some areas, and so it cut off supplies.
One of the largest drug-distribution companies, AmerisourceBergen ($ABC), just this week announced a 10-year deal with Walgreen ($WAG) and Alliance Boots. AmerisourceBergen will handle branded drugs for the two drugstore chains this year and pick up generics next year, while they will take a minority stake in the distributor.
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