To meet the challenge of falling prices and tough competition Japan's top drug wholesaler Mediceo Paltac has bought Alfresa for $2 billion. Factually, Japan's pharmaceutical distributors are facing a tough situation after government asked for cuts in medicine. There has been increase in use of generic medicine. Also, in new scenario pharmacies have made pact with hospitals putting distributors at loss.

 

Under the agreement, Alfresa will swap one of its shares for 4.15 shares in Mediceo, valuing the deal at about $2 billion. With the conclusion of deal, the new entity will become a dominant drug wholesaler with annual sales of $40 billion. However, the news of merger of the two firms could not boost share value. While Mediceo shares fell 9.5 per cent to 1,158 yen, Alfresa dropped 10.9 per cent to 4,740 yen.