Outline of the segment
Walgreens Boots Alliance’s (WBA) Pharmaceutical Wholesale division consists of the legacy Alliance Boots pharmaceutical wholesaling and distribution businesses. Under this segment, the company supplies medicine, other healthcare products, and related services to more than 140,000 pharmacies, doctors, health centers, and hospitals each year from its 302 distribution centers across 12 countries, primarily in Europe.
Walgreens Boots is one of the largest pharmaceutical wholesalers and distributors in Europe. The company also ranks as one of the top three in market share in many of the other regions it operates in.
The Pharmaceutical Wholesale division generated an operating profit of $376 million on sales of $13.8 billion in fiscal 2015. While the division’s contribution towards the company’s total sales stood at 13.4%, its contribution towards Walgreens Boots’ operating income was just 8%. This was on account of the Pharmaceutical Wholesale segment’s comparatively lower operating margin of 2.7%. Other divisions had operating margins above 4.5%.
Revenues for the segment are principally derived from the wholesaling and distribution of brand-name and generic pharmaceuticals, health and beauty products, home healthcare supplies, and equipment. In addition, the company also provides related services to pharmacies and other healthcare providers such as pre-wholesale and contract logistics, direct deliveries to pharmacies, and medicine preparation and clinical trial support to pharmaceutical manufacturers.