What are channel economics in pharmaceutical distribution?

The pharma supply chain involves manufacturer to wholesaler (typically WAC minus 2-4%), wholesaler to pharmacy (WAC minus 0.5-2%), and pharmacy to patient/payer (reimbursed at NADAC plus dispensing fee or contracted rate). Each node captures margin through buy-side discounts, sell-side markups, and fee-for-service payments. Vertical integration by PBMs has consolidated these margins.