Gray Market Pharmaceuticals

I am going to keep this one brief.

There is a big difference in the use of the term "Gray Market" in pharmaceuticals. To understand the terms you must understand the sales channels and terms. The three largest pharmaceutical distributors in the U.S. are Amerisource Bergen ( @Healthcare_ABC ), Cardinal Health ( @ cardinalhealth), and McKesson ( @McKesson). They hold the lion's share of business in the acute and non-acute trade with the largest segment of their business being the retail sector. Hospitals would do well to heed that the big three sell more to retail than to them.

The next tier of wholesalers are large businesses that can handle the acute market. The two that immediately come to mind are H.D. Smith and Morris Dickson which both handle hospital business and significant pieces of retail and long term care.

Below this are other wholesale resources that are completely legitimate including another operation of our parent company called the Harvard Drug Group.Beyond this tier there are dozens and dozens of distributors with many being legitimate and some not.

If you are setting at the HD Smith / Morris Dickson / Harvard Drug level, anything below them is usually considered gray market sales. This is because they are point of need distributors that often raise the price of products by several hundred percent to make a quick profit. While completely legitimate, they are used to making quick hit profits from single transactions on hard to get items, and have given themselves notoriety in the market.

If you are a hospital or one of the big three wholesalers, the term used for any distribution below those big three is usually gray market, which couldn't be further from the truth because they all provide drug pedigree for products purchased.

Your view of the market depends on where you are looking at it from.