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BUSINESS CONCENTRATIONS
12 Months Ended
Dec. 31, 2017
Risks and Uncertainties [Abstract]  
BUSINESS CONCENTRATIONS

NOTE 11 - BUSINESS CONCENTRATIONS

 

We purchase our products from several suppliers with approximately 100%, 98%, and 60% of our purchases supplied by one vendor for the years ended December 31, 2017, 2016 and 2015, respectively.

 

We sell our prescription prenatal vitamin products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. During the years ended December 31, 2017, 2016 and 2015; four, three, and two customers each, respectively, generated more than 10% of our revenues. Revenue generated from four major customers combined accounted for approximately 59% of our revenue during the year ended December 31, 2017. Revenue generated from three major customers combined accounted for approximately 41% of our revenue during the year ended December 31, 2016. Revenue generated from two major customers combined accounted for approximately 67% of our recognized revenue during the year ended December 31, 2015. 

 

During the year ended December 31, 2017, AmerisourceBergen generated approximately $2,667,000 of our revenue; McKesson Corporation generated approximately $1,959,000 of our revenue; Cardinal Health generated approximately $2,559,000 of our revenue and Pharmacy Innovations PA generated approximately $2,715,000 of our revenue. During the year ended December 31, 2016, Woodstock Pharmaceutical and Compounding generated approximately $2,247,000 of our revenue; Medical Center Pharmacy generated approximately $3,700,000 of our revenue and Pharmacy Innovations PA generated approximately $2,040,000 of our revenue. During the year ended December 31, 2015, Woodstock Pharmaceutical and Compounding generated approximately $8,848,000 of our revenue and Due West Pharmacy generated approximately $4,843,000 of our revenue.

 

As a result of developments in the pharmaceutical industry that negatively affected independent pharmacies, including such pharmacies’ reliance on third party payors, in 2016, we identified that payment periods for our retail pharmacy distributors were becoming longer than in prior years. As a result, during the third quarter of 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and minimize business risk exposure to any one retail pharmacy. During the third quarter of 2016, we entered into new distribution agreements with our retail pharmacy distributors to effectuate this centralization which were effective September 1, 2016.