Sigma Pharmaceuticals (ASX: SIP) says it expects its annual wholesaling revenues to decrease by approximately 10 to 15 per cent from February next year, as a result of a decision by one of its major suppliers.

The company said it has been informed by Pfizer Australia (Pfizer) that from January 31, 2011, Pfizer will be expanding its current "Pfizer Direct" model so that all prescription products will be delivered by Pfizer direct to pharmacies.

This program will bypass the national full line wholesaling system, Sigma said. Pfizer also announced it would not be seeking to participate in the Community Service Obligation funding pool.

Sigma will continue to distribute Pfizer's OTC & Consumer Products.

While Sigma expects its annual wholesaling revenues to decrease, the full impact on future earnings is still being assessed. Given the significance of this change, combined with the impact of the recent PBS reform legislation, this will accelerate the need for Sigma to further reduce its customer trading terms, the company said.

Shares in Sigma Pharmaceuticals plummeted on the news. At 1225 AEDT, shares in the company lost nine cents or18.4 per cent, at 40 cents.