Australian Pharmaceutical Industries chief executive Stephen Roche says within two years the distribution of over the counter medicines and health and beauty products to the Priceline network of stores will be more profitable than the traditional drug wholesaling business.
Wholesalers like API and its rival Sigma Pharmaceuticals have a core business in distributing drugs to community pharmacies. They are paid a commission on the value of drugs they distribute, but this business is under pressure as governments rein in the cost of the $9 billion PBS.
To counteract this trend, API has been building the profile of Priceline through increased marketing and its Sisterhood loyalty program.
The Priceline network expanded by 27 stores to 390 in the year. Excluding the revenue from medicines subsidised by the government, sold under the Pharmaceutical Benefits Scheme, like-for-like sales at Priceline stores rose 6 per cent, API said.