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BUSINESS CONCENTRATIONS
9 Months Ended
Sep. 30, 2017
Risks and Uncertainties [Abstract]  
BUSINESS CONCENTRATIONS

NOTE 13 - BUSINESS CONCENTRATIONS

 

We purchase our products from several suppliers with approximately 100% and 97% of our purchases supplied from one vendor for both the three and nine months ended September 30, 2017 and 2016, 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. 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.

 

During both the nine months ended September 30, 2017 and 2016, four customers each generated more than 10% of our total revenue. Revenue generated from four major customers combined accounted for approximately 60% of our revenue for both the nine months ended September 30, 2017 and 2016. During the nine months ended September 30, 2017, Pharmacy Innovations PA generated approximately $2,715,000 of our revenue, AmerisourceBergen generated approximately $1,716,000 of our revenue, Cardinal Health generated approximately $1,764,000 of our revenue and McKesson Corporation generated approximately $1,458,000 of our revenue. During the nine months ended September 30, 2016, Woodstock Pharmaceutical and Compounding generated approximately $2,247,000 of our revenue, Medical Center Pharmacy generated approximately $2,683,000 of our revenue, Due West Pharmacy generated approximately $1,890,000 of our revenue and Pharmacy Innovations generated approximately $2,113,000 of our revenue.