KOR-JPN jointly launches Healthcare Distribution Alliance

Dongwon, Boksan Nice, Suzuken Korea joins forces

Companies launch Healthcare Distribution Alliance... “will lead the market with an advanced model”

Scaling up pharmaceutical distribution companies is no longer a choice but a necessity... to maximize productivity and lead innovation

More new drugs to emerge in the future... the new alliance seeks to secure high-quality management and delivery systems

(From the left) Jun-Jae Hyeon (CEO, Dongwon Healthcare), Jun-ho Hyun (CEO, Dongwon Pharmaceutical Wholesale), Seung-Uk Eom (CEO, Boksan Nice), and Seongwook Cho (Country Manager, Suzuken Korea)

Three pharmaceutical distribution companies in Korea and Japan have joined forces to launch the Healthcare Distribution Alliance to lead the domestic market by introducing advanced overseas models.

 

The alliance aims to go beyond simple logistics agreements – it seeks to build an innovative cooperation structure where companies can share capital and operational know-how, and combine each company's strengths to transform the pharmaceutical distribution market.

 

Jun-Jae Hyeon (CEO, Dongwon Healthcare), Jun-ho Hyun (CEO, Dongwon Pharmaceutical Wholesale), Seung-Uk Eom (CEO, Boksan Nice), and Seongwook Cho (Country Manager, Suzuken Korea) recently met with reporters to explain the alliance's goals.

 

Eight affiliates of Dongwon Pharmaceutical Group, Boksan Nice, and Suzuken have signed a business partnership agreement and established an organizational framework for cooperative operations at the alliance level.

 

As part of the collaboration, the companies also entered into a capital partnership, with Suzuken acquiring a 33.6% stake in Gyeongnam Dongwon Pharmaceutical, and Boksan Nice acquiring a 3.4% stake in Gyeongnam Dongwon Pharmaceutical.

 

This alliance goes beyond simple logistics cooperation by sharing capital and strategy direction of the companies.

 

With the direct participation and investment of Suzuken, a major Japanese pharmaceutical distribution company, the alliance aims to pursue a long-term model that pursues the maximization of distribution productivity, supply chain stability, and function as part of a social infrastructure.

 

CEO Seung-Uk Eom said, “We decided to pursue this alliance to survive in the rapidly changing pharmaceutical distribution industry and create growth opportunities through innovation.

 

We aim to realize economies of scale through the alliance between Dongwon Pharmaceutical, Boksan Nice, and Suzuken and maximize productivity in the pharmaceutical distribution market while driving innovation for mutual growth.” Industry observers expect synergy from the partnership.

 

Dongwon Pharmaceutical Group and Boksan Nice each reported over KRW 1 trillion in annual sales last year.

 

Suzuken, one of Japan's top three pharmaceutical distributors, posted annual revenue exceeding JPY 2 trillion (approx.

 

KRW 19 trillion) in 2023.

 

CEO Jun-ho Hyun emphasized, “As the pharmaceutical distribution environment evolves and capital requirements grow, scaling up is no longer an option – it’s a necessity.

 

We aim to establish a Korean-style large-scale distribution model and guide the future direction of the market.” The alliance anticipates increased distribution-related costs and volatility in the coming years.

 

To address this, it aims to build a robust infrastructure and reduce labor dependency.

 

Plans include exploring hospital market strategies, logistics outsourcing services, private-label (PB) healthcare products, and the potential introduction of Suzuken’s current Japanese business operations into the Korean market.

 

CEO Seung-Uk Eom noted, “In the short term, we’ll focus on collaboration between logistics centers within the alliance, which is expected to reduce stockouts and delivery lead times through optimal inventory and shipping operations.” He added, “In the long term, we plan to build systems such as enterprise resource planning (ERP), web order systems (WOS), and customer relationship management (CRM).

 

Given the significant time and cost required for IT system development, combining the long-standing expertise and ideas of Suzuken, Boksan Nice, and Dongwon Pharmaceutical will not only facilitate joint development but also greatly contribute to future logistics innovations such as the modernization of logistics and improvements in operational efficiency involving robots and AI.

 

CEO Seung-Uk Eom added, “Beyond transportation management systems (TMS) and quality control standards, we will also build a foundation system for environmental, social, and governance (ESG) and seek ways to advance them.” CEO Jun-ho Hyun said, “Profit margins for pharmaceutical distributors have been steadily shrinking.

 

Survival through sales promotion activities alone is becoming difficult.

 

We must scale up and differentiate through cost reduction and pharmaceutical partnerships.” ”Will seek to implement Japanese-style wholesale structure in Korea" The alliance is eyeing the Japanese model, where pharmaceutical distribution is treated as a core part of national infrastructure, with government, pharma companies, wholesalers, and hospitals working in unison.

 

Even logistics center placements are coordinated with government authorities, and disaster response systems are embedded into the distribution network.

 

Japan’s market is dominated by major distributors like Medipal, Alfresa, and Suzuken, which fulfill roles as social infrastructure through close cooperation across the pharmaceutical supply chain.

 

CEO Jun-jae Hyeon noted, “In Japan, systems are in place to ensure medicine continues to flow even during national disasters like earthquakes and tsunamis.

 

We aspire to build such a socially integrated distribution system here in Korea.” Country Manager Seongwook Cho said, “, “Japan has established a virtuous cycle model that contributes to the national health insurance budget by minimizing the deterioration of medicine quality and the amount of expired medicines through infrastructure development.

 

Although this may not be immediately achievable in South Korea, we will do our best to prepare for it." In addition, as more and more pharmaceutical companies are expected to develop new drugs such as biological agents, anticancer drugs, and orphan drugs, it is necessary to establish a system to manage and deliver these drugs.

 

The association aims to provide one-stop services tailored to their needs.

 

Country Manager Seongwook Cho said, “Suzuken already communicates and conducts business with many multinational pharmaceutical companies in Japan.

 

We are aware that the companies have high standards for quality control and other global requirements.

 

Our association’s goal is to meet the standards set by such global companies in various areas, including logistics and cold chain.” CEO Jun-jae Hyeon said, “In Japan, there are various pharmaceutical platforms, with distribution companies at the center of each.

 

All transactions between healthcare institutions and related organizations are conducted through distribution companies.

 

We will strive to establish a similar structure in Korea, where distribution companies play a central role in facilitating various activities.”