AND, Which Provided Procurement Agency Services for Pharmaceuticals to Medical Institutions, Files for Civil Rehabilitation – livedoor News

News Highlights

AND Corporation (Tokyo), which had been providing procurement agency services for pharmaceuticals and medical supplies to medical institutions, filed for civil rehabilitation under the Civil Reorganization Law with the Tokyo District Court on July 10, 2019. The total debt is reported to be approximately 2.5 billion yen. The company supported medical institutions in cost reduction and operational efficiency, but it is believed to have been affected in recent years by factors such as the reorganization of the pharmaceutical wholesale industry and intensifying price competition.

M&A Medical Editorial Department’s Perspective

AND’s civil rehabilitation suggests the difficulty of maintaining business continuity in the niche yet crucial field of procurement support for medical institutions. The company’s business model aimed to create economies of scale by consolidating procurement for multiple medical institutions, thereby achieving cost reductions. However, challenges may have arisen from the consolidation within the pharmaceutical wholesale industry and the need to maintain responsiveness to the individual needs of each medical institution. In particular, with M&A progressing among major pharmaceutical wholesalers, procurement agency businesses are likely being forced to differentiate themselves in terms of price competitiveness, product range, and information provision capabilities. The bankruptcy of a procurement support provider directly impacts the procurement systems of the medical institutions it serves, potentially compelling these institutions to diversify their suppliers or review their in-house procurement management systems.

Points Raised by This News

• The revenue structure of pharmaceutical procurement agency businesses and the impact of industry consolidation and price competition
• Risks and alternative measures for procurement agency businesses within the medical institution supply chain
• The dilemma faced by AND’s business model between cost reduction pressures and addressing individual needs
• The risk of single-supplier dependency and the necessity of diversification in medical institutions’ procurement strategies

Practical Questions Arising from This News

• How should medical institutions that do business with AND procure pharmaceuticals and medical supplies in the future?
• What strategies should procurement agency businesses adopt amidst the consolidation of major pharmaceutical wholesalers?
• How will AND’s bankruptcy affect the business continuity of other procurement support providers?

If You’re Thinking “Should I Consult Too?”

Is your institution’s procurement of pharmaceuticals and medical supplies dependent on specific vendors? The situation with procurement agency businesses like AND highlights the risk of supplier concentration. If you are interested in optimizing procurement costs or diversifying procurement risks in case of unforeseen events, please consult with experts. We can propose a more robust and efficient procurement system tailored to your institution’s circumstances.

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics as a Small and Medium Enterprise Agency-certified M&A support institution, with a completely success-fee-based model. Consultations are accepted with strict confidentiality. Free consultation here