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MAIL AND INTERNET ORDERS:

End customers (patients) can receive their pre-

scription drugs by mail e.g., ordering by phone or online, without going to a retail

pharmacy or an hospital. As a result, mail order operation can save overhead on

inventory cost and storage cost. HMO’s and insurance companies encourage end

users to buy by mail. The dispensing of drugs by mail order from pharmacies of

HMO’s centers, is the fastest growing segment of the industry. From 1990 to 1996,

the sales in this segment increased from 5.1% to 9.7% and the 2001 estimated

figure is over 12%, of the total industry sales. Yet, mail order operators frequently

do manufacture the drugs. These companies operate warehouses buying directly

from manufacturers, or use the services of another distributor.