Under the new deal, Nomeco's SupplierDivision, based in Copenhagen, will serve as the central warehouse for Actavis - one of the five biggest generic pharmaceutical companies in the world.
Nomeco will store Actavis's surplus drug stock in this central warehouse, from where the products will be distributed to the local Nordic markets as and when needed.
The deal requires a considerable extension of Nomeco's warehouse capacity and is the most comprehensive co-operation of its kind in Denmark.
Being a regional contract, it is also the biggest agreement so far within Nomeco's parent companies, Finnish Tamro group and German Phoenix group, covering more countries and bigger quantities of pharmaceuticals than previously experienced, and a sign of things to come within this evolving outsourcing segment.
Over the past decade European pharmaceutical wholesalers have been facing tough times, delegates heard at the recent annual general meeting of the European Association of Pharmaceutical Wholesalers (GIRP) in Budapest.
Margins continue to be squeezed as a result of government efforts to reduce the increasing financial burdens of drugs on public health care expenditures and as a result, the industry has experienced considerable consolidation - in 2004, the three biggest European pharmaceutical wholesalers together had a market share of 70 per cent in the EU.
These three firms, Alliance/Unichem, Celesio and Phoenix, have all been slowly diversifying their business models in a bid to offer outsourcing services to big pharma manufacturers in order to stay viable, including subassembly functions, packaging, printing, finishing, inventory management, contract sales and pre-wholesaling.
In the past, such outsourcing contracts have always been arranged on a per-country basis between the big pharma firms and the local country branch of the pharmaceutical wholesaler.
"For example, Pfizer representatives would visit our representatives based in each country they wanted a service carried out, in order to seal a deal," Jorgen Kelkjaer, director of Nomeco's SupplierDivision, told Outsourcing-Pharma.com.
"This decentralised decision-making is the way our industry has typically worked within Europe - deals are largely done based on relationships built up between big pharma firms and local management teams."
However, as the European pharmaceutical wholesalers continue to evolve into more comprehensive service providers, they are beginning to adopt a more streamlined approach to business, in order to attract new clientele.
"We are seeing more and more regional deals like the one with Actavis as small to medium sized companies (SMEs), as well as generics firms with high pressure margins, begin realising the potential of outsourcing functions such as pre-wholesaling, repackaging and logistics to one company to manage from one centralised location," said Kelkjaer.
"While big pharma firms tend to still prefer outsourcing on a per-country basis because of the sheer volume of their product, regional deals are a perfect way for SMEs to save money as the distribution process becomes less complex and they can reduce the amount of inventory and financial reporting required."
Kelkjaer said that in the past, regional deals were also hindered by the fact that each country branch of wholesaler often had its own IT system that was not compatible with the systems used by its branches in other European countries.
"However, the three major companies in the sector are undergoing a huge push towards streamlining the IT infrastructure between their different European countries in order to facilitate more regional deals," said Kelkjaer.
"System integration is becoming increasingly important as customers are now looking to receive all their data in the same way across Europe through a common IT link."