Adaptation to Progress in Information Technology: The Case of Pharmaceutical Product Wholesalers in Tohoku Region, Japan

This paper examines the ways in which pharmaceutical product wholesalers have adapted themselves to the progress in information technology, and analyzes the consequent functional division and locational change among their establishments in Tohoku Region. Pharmaceutical product wholesalers have reorganized the existing distribution system through informatization, facing the revision of official standard prices for medicines and deregulation of their distribution.As for locational change of firms caused by improvement in the information network, the separation of trade information flow and goods delivery has shifted the latter function from the core of the urban centers to their suburban areas. Moreover, the intra-firm separation of the OTC (over-the-counter) and prescription medicine sector has led to locational reorganization of branch offices. First, because of the informatization in the online ordering system, the delivery centers and branch offices have been centralized in the OTC sector whose price has been decontrolled, and which is usually located in the center of prefecture. Second, the prescription medicine sector needs the advanced transmission functions of commodity information and rapid delivery. In this sector, importance is still attached to field activities relying on face-to-face contact. Then, the location of branch offices has not changed and continued to be oriented toward the core of the trade territory which minimizes the aggregated time distance to all possible locations within the territory. In this way, the distribution system has been reconstructed to suit for each commodity. In addition, merger of firms adapting to informatization has resulted in the expansion of trade areas and consequent locational reorganization of branch offices.In relation to the prescription medicine sector, especially in the retail sub-sector at the final stage of the distribution, it is possible that the form of business and supply channel of commodities have been modified by the increase in the number of pharmacy chains in recent years. However, because this article aimed at the wholesalers which were at the middle stage of the distribution, it could not grasp the spatial structure stretching from production to consumption. Thus, it remains to be seen how the consequent new forms of retail trade would change the entire distribution structure.