Behind pharmacy logistics: players tending to their business model

“Our margin is regulated,” notes Jérôme Ibar, Technical Director of French pharmaceutical wholesaler-distributor CERP, formed in 2024 through the merger of CERP Rhin-Rhône-Méditerranée and CERP Rouen. Beyond this margin, over which they have no control, these pharmaceutical logistics providers are subject to strict legal obligations: “Each of our pharmaceutical facilities must list at least nine-tenths of the pharmaceutical specialty presentations actually marketed in France and hold inventory sufficient to guarantee two weeks’ supply for its regular customers,” Jérôme Ibar explains. “We are also required to deliver to pharmacies within 24 hours of their order and provide an on-call service on weekends, public holidays, and in public health emergencies.” Wholesalers-distributors deliver 71% of the 2 billion medicines supplied to pharmacies.

CERP works every day with 11,300 of the 20,000 pharmacies across France, including mainland France and the overseas departments and regions. Each day, the wholesaler makes two deliveries from its 56 pharmaceutical and storage facilities, spread across the country and totaling 280,000 sq. m. “They range from 1,500 to 15,000 sq. m, depending on the city and region in which they are located,” the Technical Director specifies. “To complement the day-to-day service provided by our local facilities, they rely on daily logistics from our six regional facilities, which supply them every night.”

With narrow margins and legal obligations, the business model of wholesalers-distributors relies primarily on the efficiency of their logistics: delivery speed and product availability. Every day, CERP facilities receive medicines from pharmaceutical laboratories in cardboard boxes. “We open each box and record the medicine packages, along with their batch number and expiration date.” They are then placed in inventory until pharmacies request them. Orders are prepared by operators, who place the packages in plastic totes that are then loaded onto trucks driven by company-employed delivery drivers. “Between 10 and 100 routes are organized each day, depending on the size of the facility. A route can cover up to 300 kilometers, depending on the declared distribution area.” To meet the imposed deadlines (on average, distributors deliver to pharmacies within two hours), the more pharmacies there are to serve in an area, the fewer kilometers need to be covered—also making it possible to deploy electric vehicles. “By 2032, half of our fleet will have been electrified,” the Technical Director announces. “But an electric vehicle can cost up to twice as much as a combustion-engine vehicle, while civil engineering and charging-station installation costs amount to several million euros!” In its latest publication, the CSRP (French Pharmaceutical Distribution Trade Association) estimates wholesalers-distributors’ investment in greening their fleets at €100 million.

Despite 2024 revenue of €8.1 billion, Jérôme Ibar points out that CERP’s balance, like that of all other wholesalers-distributors, remains fragile. “This is why we have seen the market consolidating for more than 10 years. The merger we carried out last year between CERP Rouen and CERP Rhin-Rhône-Méditerranée enables us to continue the investments needed for efficient logistics, with lower greenhouse gas emissions, while also ensuring 100% reliability and traceability of the products we transport.”

For several years, CERP has for example used RFID chips to track totes containing temperature-sensitive medicines. “Vaccines, hormones, cancer treatments… The volume of these products, which must be kept between 2 and 8°C, has been steadily increasing for several years,” Jérôme Ibar observes. “We estimate the increase at 30% over the past 10 years, and they now account for 5% to 7% of our business. For us, this means larger cold rooms—up to 150 sq. m at some of our facilities—and more insulated containers to transport these medicines, and so on. This will therefore represent an additional cost.”

Between regulated margins, investment, and the greening of transportation, the decisions made each year under the Social Security Finance Bill (PLFSS) are therefore critical for a sector already under strain.